Cyprus cabinet resign
July 28, 2011
At an extraordinary meeting of the Council of Ministers in Nicosia on Thursday, Cypriot President Demetris Christofias asked his entire cabinet to resign to make way for a full reshuffle.
Government spokesman Stefanos Stefanou said the eleven cabinet members tendered their resignations, but will stay on until a reshuffle is concluded in the next few days.
The move comes after an accidental explosion on July 11 took out the main power station. Many Cypriots are said to blame state incompetence and negligence for the accident. And the country now faces a possible bill of 1 billion euros ($1.4 billion) to fix the damage.
Thirteen people were killed in the blast and half the island's energy was cut.
Next poor man of Europe
The ratings agency Moody's had earlier cited the explosion as one of its reasons for downgrading the Cyprus government's bond rating by two notches. It also cited weaker medium-term credit fundamentals.
Nicolas Papadopoulos, vice-president of the government's DIKO coalition partner, said angry street protests are not helping the country's economy.
"The problem right now is to regain confidence ... I think what we need to do is convince the international monetary markets that we are still a viable economy," he said. "It’s going to take extreme measures, but we are willing to take those extreme measures."
Last week the central bank governor, Athanasios Orphanides, had warned that Cyprus may be the next country to need a bailout after Greece, Ireland and Portugal.
The Cypriot foreign and defence ministers had resigned soon after the explosion, and there have been calls for the president to step down as well but analysts say he is unlikely to go.
Authors: Nathan Morley, Zulfikar Abbany (AFP, Reuters)
Editor: Andreas Illmer