Minister: Cyprus Won't Need Full EU Bailout Package

Cyprus will not need all of the 10-billion-euro bailout it received in 2013 as its economy recovers faster than expected, the country's finance minister told Agence France Presse.

"(The economy) is much better, but I'm not saying that it is good," Harris Georgiades said ahead of the second anniversary of the "unprecedented crisis" that shook the eurozone and left the Mediterranean island teetering on the brink of bankruptcy. 

"The economy is recovering. We are still on a negative growth rate but each quarter is seeing an improvement," he told AFP.

Georgiades predicted a return to "very mild" growth this year.

In March 2013, Cyprus clinched a 10-billion-euro ($13 billion at the time) loan from the European Union and International Monetary Fund to bail out its troubled economy and oversized banking system.

Fearing a run, the government closed all the country's banks for nearly two weeks and imposed draconian capital controls when they reopened. Some restrictions remain.

Georgiades said Cyprus had made "significant progress" since the crisis.

"Unemployment is starting to come down, public finances are under control, we do not have a deficit... and crucially our banking sector has been stabilized," he said.

Due to the favorable economic climate, the minister said his country would not need the full bailout amount it was initially offered.

"We do not expect our banks for instance to need any capital, through state money," Georgiades said. "Some of the 10 billion which was, let's say, reserved for this purpose -- buffered for this purpose -- will not be needed."

Cyprus has to date received "just over six billion" euros, he added.

Austerity measures since the crisis led to tax hikes, salary cuts and a slashing of social welfare benefits.

Georgiades said he hoped parliament would vote "over the next weeks" to allow repayment of the latest tranche of bailout money.

He also promised Cyprus would "continue the same policy" towards sustainable growth by focusing on structural reform, including in areas such as privatization and fighting corruption.