European leaders on Friday approved a new tranche of aid to Cyprus and hinted at a gradual exit from some aid programs for debt-ridden countries in coming months.

However, eurozone finance ministers warned there was no room for complacency or to stray from the path of implementing economic reform.

Uncertainty at the periphery

Financial assistance worth 1.5 billion euros ($1.98 billion) will be given to Cyprus, which has taken decisive steps to stabilize its financial sector, meet fiscal targets and implement structural reform.

EU Commissioner for Economic and Monetary Affairs Olli Rehn said international creditors would gradually work on exiting aid program for debt-stricken countries in Europe.

However, uncertainty lingered for peripheral countries. Eurogroup chief Jeroen Dijsselbloem stressed that political stability was of the utmost importance for Italy.

For Portugal, he warned that it was important to stick to "what we've agreed within the program, also including the deficit targets."

Echoing Dijsselbloem, Rehn warned that no room for complacency despite encouraging economic signs and gradual recovery taking root.

Speaking about Greece, Rehn said, "We will assess financing needs and the fiscal gap in Greece in the review mission starting Monday. At this stage, it is too early to give figures."

Record umemployment

Rehn said unemployment remained at "dramatic levels" in southern Europe, making economic reforms in these countries all the more important.

According to data Friday by Eurostat, the number of employed decreased 0.1 percent in the eurozone, showing the bloc's labor market remains in bad shape.

Debt-stricken Greece broke its unemployment record for third month in row, reaching 27.9 percent in June.

Need for reforms 

EU officials urged countries stay the path of economic reform. "Many households and businesses, especially SMES, are still struggling to obtain affordable credit and therefore much more needs to be done to remove the bottlenecks of economic growth that are holding us back for the moment," Rehn noted.

A key part of reforms at the EU level, officials are working on a banking union to be established as soon as possible.

Germany's Wolfgang Schaeuble warned that ministers were under "high pressure regarding the timing" in setting up a joint authority to restructure or unwind bust banks.

"Governments must strike a compromise on the complex legislation by December," Dijsselbloem said, speaking about progress on establishing the banking union." "It is very important that we stick to the timeline," he added.