Cyprus Finance Minister resigns

2013-04-02 16:06

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Finance Minister Michalis Sarris has resigned, hours after a judicial probe was launched into how Cyprus was pushed to the verge of bankruptcy before having to agree to a crippling eurozone bailout.

Sarris said he was stepping down as he would need to cooperate with judges probing the failure of Laiki Bank, of which he was formerly chairman.

The bank’s collapse was a major contributor to the island’s near financial meltdown.

President Nicos Anastasiades accepted his resignation, presidential spokesman Christos Stylianides said, adding that current Labour Minister Haris Georgiades would replace him.

Meanwhile, after talks in Nicosia with international creditors, the central bank announced an easing of capital controls imposed last week – raising the limit on business transactions from 5 000 euros (R59 000) to 25 000 (R295 000) and allowing people to issue cheques of up to 9 000 euros (R106 000).

Anastasiades thanked Sarris for his “valuable services during the difficult negotiations with the troika” of international lenders which agreed to provide Cyprus with a 10 billion euro bailout.

With public anger mounting, the government set up a judicial inquiry on Tuesday into the banking collapse.

Anastasiades called on the three-judge commission – George Pikkis, Panayiotis Kallis and Yiannakis Constantinides – to investigate himself and his family members as a “matter of priority” and with “extra vigour”.

This is seen as a move to counter unsubstantiated allegations that his relatives used privileged information to get money out of the country before deposits were locked down.

Accusations have also been made against other leading politicians and business figures that they took advantage of their position to protect their assets from a hit on bank deposits imposed by European Union-led creditors last month.

Anastasiades said nobody was immune from the inquiry, not even his extended family or the law firm in which he was a partner until recently.

“The current plight of the economy and our people is without a doubt the result of a synergy of factors both external and internal,” Anastasiades said at the swearing-in ceremony.

“A series of acts or omissions from those authorised to manage the economy or the banking system led the country to the brink of bankruptcy, the dissolution of one its largest banks and the loss of billions from an impairment of deposits,” he added.

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