Cyprus govt on verge of collapse as coalition partner quits

The fragile coalition government in Cyprus is headed to collapse as the junior partner is disappointed by the mainly communist government’s inability to deal with a major energy, financial and political crisis.
The centre-right Democratic Party (DIKO) told its ministers to submit their resignations on Wednesday in a bid to force the hand of a government weakened by an energy crisis after the island's biggest power plant was destroyed causing extensive blackouts throughout the country for the past two weeks.
DIKO has been pressuring President Demetris Christofias to reshuffle the cabinet and form a broad-based government to better cope with the fallout from the July 11 blast, which killed 13 and knocked out 53% of the country's electricity output.
Christofias has been criticised for his administration’s poor handling of the disaster, causing an unprecedented public outcry calling for his resignation.
Cyprus has a presidential executive system with the parliament playing a legislative and budget regulatory role.
Earlier on Wednesday, Moody's cut the country’s sovereign rating to Baa1, three notches above junk status, because of the crisis and the exposure of its banks to Greek sovereign debt, estimated at some 6 bln euros.
"The President of our party has called on the DIKO ministers to place their resignations at the disposal of the President in order to facilitate and expedite decisions and initiatives that we all expect," party spokesman Photis Photiou said.
Christofias's own Communist AKEL party has said that it also favours a cabinet reshuffle.
DIKO has two ministers left in the 11-member centre-left cabinet, holding the commerce and health portfolios.
The foreign affairs and defence ministers, whose departments handled a confiscated cargo of Iranian munitions which caused the blast, resigned after the incident. The foreign minister and former EU Health Commissioner Markos Kyprianou was also a DIKO member.
The Vassiliko plant was destroyed when the cargo of munitions stored in a military base several hundred metres away from the plant exploded after being exposed to scorching heat for two years.
Since then, the state-owned electricity authority, which has an effective monopoly on power generation, has introduced rolling power cuts.
Many Cypriots have been staging protests demanding the resignation of the government and Christofias, elected for a five-year term in February 2008.
Economists estimate the cost of the blast will top 1 bln euros, a significant amount for the 17.4-bln-euro economy. The island's central banker has warned the island may require a bailout from the EU.