Text size:

  • Small
  • Normal
  • Large
Cypriot president Demetris Christofias, right, shakes hands with coalition partner Marios Karoyan, chairman of the Democratic Party (DIKO), at the presidential palace in Nicosia yesterday, Andreas Manolis / Reuters
Cypriot president Demetris Christofias, right, shakes hands with coalition partner Marios Karoyan, chairman of the Democratic Party (DIKO), at the presidential palace in Nicosia yesterday, Andreas Manolis / Reuters

Crisis widens for Cyprus as cabinet quits over growing financial woes

Cypriot cabinet resigns after public fury over a munitions blast that destroyed islandís largest power plant and worsened its economic problems.

NICOSIA // The Cypriot cabinet resigned yesterday to try to damp down public fury over a fatal munitions blast that destroyed the island's largest power plant and compounded its economic woes, possibly forcing an EU bailout.

The government spokesman, Stefanos Stefanou, said it would not necessarily need the help, but even before the energy crisis caused by the July 11 blast, borrowing costs had risen steadily because of Cyprus's exposure to Greek debt.

"Don't take it as a given that Cyprus will be admitted into a support mechanism," Mr Stefanou said.

Thousands of Cypriots have demonstrated over the blast, blaming state incompetence for allowing the seized munitions to be stored near the power station in scorching heat.

Demetris Christofias, the president who was elected for a five-year term in 2008, who is facing probably the biggest challenge of his political career, has also been under pressure from coalition partners DIKO to create a broad-based unity government to tackle the crisis.

When he did not immediately heed the call last week, DIKO on Wednesday asked its two ministers to resign. Mr Christofias responded by asking all of the ministers to quit.

"The president of the republic briefed ministers of his intention to proceed with a broad reshuffle of the government and asked they place their resignations at his disposal," Mr Stefanou said.

Cyprus has been left shell-shocked by the explosion and the prolonged political wrangling threatens to derail needed economic reforms.

Preliminary finance ministry estimates suggest the blast will wipe out growth this year to zero and Moody's on Wednesday cut Cyprus to three notches above junk.

Last week, the island's central bank governor and European central bank governing council member, Athanasios Orphanides, warned that without immediate action Cyprus might follow Greece, Ireland and Portugal in asking for an EU handout.

The cost of damage from the explosion and subsequent disruption from rolling power cuts has been cited as anything between Ä1-3 billion (Dh5.24-Dh15.75bn). The finance ministry has not given an assessment, but Ä3 bn would represent 17 per cent of Cyprus's GDP.

The munitions, confiscated from a ship sailing from Iran to Syria in 2009, were stored a few hundred metres away from a power station on the south coast in often scorching conditions, despite appeals from army officers.

Mr Christofias has said an inquiry into the incident will also scrutinise his own rule, but aides said he was unaware of the storage conditions.

Back to the top

More articles


Editor's Picks

 Fatema holds a picture of her son Nurul Karim as she poses for a photograph in front of her slum house in Savar. Fatema lost her son Nurul Karim and her daughter Arifa, who were working on the fifth floor of Rana Plaza when it collapsed on April 24, 2013. All photos Andrew Biraj / Reuters

These women know the real price of cheap high street fashion

Survivors of the world's worst garment factory accident, struggle to rebuild their lives from the rubble of the Rana Plaza collapse as Bangladesh prepares to mark the first anniversary of the disaster.

 Supporters of unseen India’s main opposition Bharatiya Janata Party prime ministerial candidate and Chief Minister of the western Indian state of Gujarat, Narendra Modi, wave as he arrives to file his election nomination papers in Varanasi. Sanjay Kanojia / AFP Photo

Best photography from around the world April 24

The National View's photo editors pick the best of the day from around the world

 Iranian workers at the Iran Khodro auto plant in Tehran on March 18. Maryam Rahmanian for The National

Iran’s love of cars survives devastating sanctions

Sanctions and energy subsidy reductions might have hurt the Iranian automotive industry. But car makers at one factory are still optimistic, Yeganeh Salehi reports from Tehran

 Iranian President Hassan Rouhani greeted by university students as he leaves Sistan University in Sistan and Baluchestan’s provincial capital of Zahedan on Tuesday, April 15, 2014. Maryam Rahmanian for The National

In Iran’s most troubled province, Rouhani hears pleas for change

Hassan Rounani aims to connect with residents of far-flung Sistan and Baluchestan province.

 Prince Bandar bin Sultan in Riyadh on March 3, 2007. Hassan Ammar / AFP Photo

Saudi Prince Bandar promised a victory he could not deliver

Saudi Arabia's controversial intelligence chief stepped down this week after rumours that his policies on Syria had fallen out of favour.

 Aiza Tonida puts out laundry amid the ruins of her parents home in Leyte province that was destroyed when Typhoon Haiyan struck central Philippines on November 8, 2013. Joey Reyna for The National

Filipinos seek Middle East jobs to rebuild lives after Haiyan

Work in the GCC seen as only hope for thousands left homeless and jobless after devastating storm in November.

Events

To add your event to The National listings, click here

Get the most from The National