Cover -- CONTENTS -- BACKGROUND -- RECENT ECONOMIC DELEVOPMENTS -- PROGRAM STRATEGY -- MACRO ECONOMIC FRAMEWORK -- DEBT SUSTAINABILITY -- POLICY DISCUSSIONS -- A. Financial Sector Policy -- B. Fiscal Policy -- C. Structural Fiscal Reforms -- PROGAM MODALITIES -- A. Access, Phasing and Conditionality -- B. Capacity to Repay the Fund and Risks to the Program -- STAFF APPRAISAL -- BOXES -- 1. Dealing with the Problem Banks -- 2. Spillovers from Economic and Financial Developments in Cyprus -- 3. Temporary Administrative Measures -- 4. Cyprus: Impact of the Crisis on Economic Activity -- FIGURES -- 1. Macroeconomic Imabalances -- 2. Selected Economic Indicators -- 3. Selected Structural and Competitiveness Indicators -- 4. Selected Financial Sector Indicators -- 5. Selected Structural Fiscal Issues -- TABLES -- 1. Selected Economic Indicators and Macroeconomic Framework, 2008-2020 -- 2. Fiscal Developments and Projections, 2008-2020 -- 3. Calculation of Gross Financing Requirement and Sources of Financing -- 4. Balance of Payments, 2008-2020 -- 5. External Financing Requirements and Sources, 2012-2020 -- 6. Indicators of Fund Credit, 2012-2020 -- 7. Schedule of Review and Purchase -- ANNEXES -- 1. Public Sector Debt Sustainability Analysis -- 2. External Sector Debt Sustainability Analysis -- 3. Exchange Measures Giving Rise to Fund Jursidiction Under Article VIII of the Fund's Articles of Agreement -- APPENDICES -- 1. Letter of Intent -- Attachment 1. Memorandum of Economic and Financial Policies -- Attachment 2. Technical Memorandum of Understanding -- 2. Letter of Intent to the European Commission -- Attachment 1. Memorandum of Understanding on Specific Economic Policy Conditionality (European Commission).