Minister of Finance Makis Keravnos and the European Stability Mechanism’s (ESM) Managing Director Pierre Gramegna agreed that the expansion of ESM ‘s role amid changing financial conditions should considered.
Gramegna, who is visiting Cyprus as part of a series of area visits, praised Cyprus’ fiscal policy which led to the upgrading of the Republic’s credit rating to investment-grade status by Moody’s rating agency, more than ten years after the 2013 financial crisis.
According to press release issued by the Finance Ministry, during their meeting, Keravnos and the ESM chief exchanged views on the broader geopolitical developments, as well as on issues pertaining to the operation of the ESM and its role in the constantly changing financial environment.
Gramegna referred to the ESM lending toolkit, proposing that the expansion of ESM’s role should be explored due to the new financial developments.
He also referred to the financial situation in Cyprus, praising the island’s fiscal policy, which lead to the recent upgrade of its sovereign credit rating by Moody’s, the last of the four ECB accredited international agencies to upgrade Cyprus long-term credit rating to investment-grade status.
On his part, Keravnos welcomed the role played by the ESM in maintaining financial stability in the Euro area by providing a safety net to Eurozone countries.
He also agreed with Gramegna’s suggestion on the need to explore a possible extension of the ESM’s role, given the new challenges emerging internationally.
ESM, a lender of last resort, is Cyprus’ largest individual creditor as it provided financial assistance to Cyprus amounting to pound 6.3 billion as part of an international bailout during the 2013 financial crisis.
Source: Cyprus News Agency