Cyprus lenders back latest bailout stage

International creditors said Wednesday that Cyprus was on track to complete the latest stage of its bailout programme, making the eurozone country eligible for additional funds and participation in the European Central Bank's stimulus programme.

A team from the so-called troika of the European Commission, European Central Bank (ECB) and International Monetary Fund completed a visit earlier this month to scrutinise reforms by Nicosia.

The troika bailed out Cyprus in 2013 to prevent a banking collapse, but the latest tranche of loans had been held up while the Cypriot government pushed through reforms on foreclosures and insolvency.

"Staff-level agreement has been reached on policies that could serve as a basis for completion of the (bailout) review," the three lenders said in a joint statement.

Formal approval by the EU and IMF to let the cash start flowing again "will be initiated shortly," it said.

But the lenders said that Cyprus "should maintain the structural reform momentum," especially in the public sector, in order to increase efficiency and reduce public debt.

Earlier this month Cyprus Finance Minister Harris Georgiades said that "significant progress has been made" and that it was close to completing the EU-IMF assessment.

In return for the bailout two years ago, Cyprus agreed to wind down its second largest bank, Laiki, and impose so-called "bail-in" losses on depositors in under-capitalised largest lender, Bank of Cyprus.

Cyprus has received around six billion euros in an adjustment programme due to run to around March 2016, although the government has said it might not need the full amount.

Getting the sign-off for the latest phase would however allow Cyprus to take part in the huge 60 billion euro monthly bond-buying programme launched by the ECB in March to pump money into the eurozone economy.

The Cypriot economy grew in the first quarter for the first time in nearly four years, with official figures released on Wednesday showing an expansion of 1.6 percent.

The progress on the Cyprus bailout comes as the EU and IMF try to end a four-month stand-off with Greece's radical Syriza government over Athens' bailout programme.

A Greek government spokesman this week reportedly ruled out any bail-in scenario similar to the Cyprus solution.