08 September 2013,

(BERLIN) – The European Commission believes Cyprus is making progress in its reform programme, but still sees room for improvement, German weekly Der Spiegel reported Sunday, quoting a leaked EU report.

“In all major areas, Cyprus has begun to meet its commitments within the aid programme. But progress has been mixed particularly in the areas of budgetary measures and structural reforms,” the magazine quoted the report as saying.

Cyprus secured a bailout deal worth 10 billion euros ($13 billion) in March, in return for which the government had to impose draconian reforms.

The report was compiled after experts from the Commission, the European Central Bank and the International Monetary Fund undertook an examination of Nicosia’s reforms.

The so-called “troika” complained that Cyprus had announced “a number of political initiatives that would increase spending without first consulting” its creditors, Der Spiegel said in an article to appear in Monday’s edition.

For example, customers of Cypriot banks have been promised tax breaks if they repatriate capital held abroad, generating additional costs for the state.

The report said Nicosia must inform the troika of any such measures in advance.

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