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Cyprus received a further 150 million euro tranche of bailout assistance from international lenders on Wednesday after a successful screening of its economic adjustment program.
The disbursement of the money was approved earlier by the European Stability Mechanism (ESM) on Wednesday, which said it was the outcome of the successful survey of the Cypriot economy and the commitment of the government to its economic adjustment program.
"It is important to preserve the momentum of reforms as important challenges still lie ahead," said the ESM in a statement made available in Nicosia.
The International Monetary Fund (IMF) warned in a report on Monday that the Ukraine crisis may lead to capital flight from non-resident depositors of foreign banks in Cyprus which may affect the business service sector.
The ESM disbursement raises the total amount Cyprus has received from its Eurogroup parnters to 4.75 billion euros (6.55 billion U.S. dollars) out of a total of 9 billion euros allocated by the Eurozone under a Cyprus bailout program approved in March 2013.
The IMF released loan money equaling 83.3 million euros to Cyprus at the end of March which was part of its 1 billion euro contribution towards the rescue of the eastern Mediterranean island's economy.
The disbursement of the loan money came after the Support Group for Cyprus issued its first report, based on its assessment on progress of reform measures in six key sectors.
European Commissioner for Economic and Monetary Olli Rehn commented Cyprus for the application of its reform program saying that they are helping it to repair its financial sector and restore healthy public finances.
"Cypriot authorities are carrying out the reforms set out in the program with commitment and determination," Rehn said Wednesday in Brussels.
"The Commission will continue to stand by the Cypriot people, not least through the Support Group for Cyprus, which is a concrete expression of European solidarity," he added.
The Support Group was launched by European Commission President Jose Manuel Barroso in March 2013 to coordinate the technical assistance requested by Cyprus in order to help implement specific reforms set out in its economic adjustment program, alleviate the social consequences of the economic downturn and revive and diversify the economy.
It said in its report that Cyprus is committed to reforming its revenue administration to enhance its tax collection capacity and step up the fight against tax fraud and evasion, through the establishment of an integrated domestic tax department.
The report coincided with Cyprus Finance Ministry data released on Wednesday showing that a financial surplus of 84.3 million euros or 0.53 percent of GDP was achieved in the first two months of the year, more than double the surplus for the corresponding period last year.
The Ministry said the surplus was mainly due to reduced public spending rather than an increase in revenues.
However, it was evidence of a successful implementation of reforms aimed at reducing public spending.
Public expenses dropped by 11.3 percent in the first two months of the year, mostly as a result of cuts in salaries and pensions of about 12 percent and a sweeping reduction of allowances.
Public revenues dropped by 7.26 percent as a result of the contraction of the economy and a reduction of income tax collection, as unemployment went up to 16.7 percent in February, meaning that 74,000 people are out of work. (1 euro = 1.38 U.S. dollars)
