The government intends to tackle anew the fiscal deficit for this and following years, thus working towards a more favourable policy mix and supporting a narrowing of the current account deficit.

As a result, changes should be made in the areas of financial sector reform, fiscal policy and structural reforms, in particular with regard to: (i) providing an updated plan for the gradual relaxation of external restrictions, which the authorities commit to starting only after the successful completion of the comprehensive assessment and a smooth transition to the Single Supervisory Mechanism (SSM); (ii) further measures to strengthen the banks' management of non-performing loans; (iii) a requirement to conclude the follow-up on the 2013 audit regarding individual financial institutions, impose sanctions if applicable, and make the final decision public; (iv) the provision of further measures to improve the Cooperative Group's operatio ...[+++]nal capacity; (v) the adoption by the Council of Ministers of the new comprehensive framework establishing appropriate corporate and personal insolvency procedures, as well as the adoption by the House of Representatives of the amendments to the legal framework in relation to foreclosures of mortgaged properties (those are two prior actions), with details on the required elements of those two new frameworks; (vi) a revision of the 2014 primary fiscal deficit target of no more than EUR 210 million (1,3 % of GDP) to reflect the fiscal performance in the first half of 2014, the submission of a proposal ensuring the fiscal neutrality of the welfare system reform and the achievement of the 2015 fiscal deficit target, while the primary surplus target for 2017 was revised down to 2,5 % of the GDP in order to smooth the fiscal adjustment over 2017-2018; (vii) the setting of further steps to operationalise the privatisation process in the Cyprus Ports Authority and the Electricity Authority of Cyprus; (viii) the appointment of the new Commissioners and the two Assistant Commissioners of the new tax department, the establishment of a common taxpayer database, and the adoption of necessary regulations to make the enhanced collection powe ...

After the high fiscal deficit of 9.3 per cent of GDP in 2002, fiscal policy became restrictive again in 2003. However, the general government deficit still reached 5.9 per cent of GDP.

The government intends to tackle anew the fiscal deficit for this and following years, thus working towards a more favourable policy mix and supporting a narrowing of the current account deficit.

The significant overshooting of the fiscal deficit targets during the last two years contributed to the consumption-driven widening of the current account deficit to above 5 ½ per cent of GDP.

The government intends to tackle anew the fiscal deficit, thus working towards a more favourable policy mix and supporting a narrowing of the current account deficit.