CYPRUS' first report card from international creditors included praise and underlined the next challenge: be more Irish than Greek.
Economic output fell less than estimated in the first half of the year and sentiment indicators rebounded from lows in April, a month after the euro area's first rescue that included seizing deposits and imposing capital controls.
"Programme implementation matters," said Thanos Vamvakidis, a currency strategist at Bank of America Merrill Lynch in London. "We've seen this in the case of Ireland where programme implementation is supposed to be strongest, compared to Greece where it has been the weakest."
Cypriot President Nicos Anastasiades said in an interview in Nicosia last week that his country aims to be "the best" at implementing its agreement with the European Union, European Central Bank and International Monetary Fund.
His goal is to spur growth, tackle rising unemployment and in January dismantle the restrictions on the movement of money that accompanied the banking crisis. The Cypriot economy contracted at an annualised rate of 5.9pc in the second quarter, following a 5pc drop in the first quarter.
"We will proceed with the same consistency and decisiveness we have applied to the terms of the loan agreement so far," said Mr Anastasiades, who was elected in February. "
IMF managing director Christine Lagarde warned this month there was no room for slippages, saying continued strong ownership and steadfast policy implementation were "critical" to Cyprus' success at restoring financial health.
Even after a promising beginning, it's "too early to tell" whether Cyprus will follow the example of bailout darlings like Ireland, said Mr Vamvakidis at Bank of America Merrill Lynch.
The next challenge for Cyprus is to lift restrictions on banks and borrowing.
"Certainly the sooner they are lifted the better, as they just reinforce a lack of confidence in the banking sector," said Fiona Mullen, director of research firm Sapienta Economics in Nicosia. "However, I think the authorities will be hard pushed to lift all controls by January because they depend on certain structural targets being met."
Also causing anxiety among creditors is unemployment which will rise to 19.5pc in 2014 from 17pc this year, compared with an April forecast for an increase to 16.9pc next year from 15.5pc in 2013. (Bloomberg)