No bailout for Cyprus … for now; New cabinet sworn in

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Cyprus does not need to enter the EU support mechanism for the time being, new Finance Minister Kikis Kazamias said on Friday.

Speaking to the press, after the new cabinet was sworn in, Kazamias said that “there is no such issue at the moment.” Asked whether Cyprus might be faced with this threat in a few months, he said “we should avoid it.”
The new Finance Minister, a former MP of the ruling communist Akel party and a member of the European Court of Auditors from 2004 to 2010, appeared optimistic as regards the future of the economy, noting that “we should all assume our share of responsibility.”
He was speaking after President Demetris Christofias swore in a new cabinet, following the departure of the junior coalition partner, Democratic Party (Diko), amid pressure for the government to resign over its poor handling of the economic crisis and a munitions blast on July 11 that devastated the island’s main power station and threw the whole country intro darkness.
Feeling isolated, the president resorted to loyal Akel members and supporters and reached to individuals from smaller parties to complete his cabinet which falls far short of a national unity government just 11 months from when Cyprus takes over the presidency of the European Council.
Christofias kept three ministers in office (Interior – Neoclis Sylikiotis, Justice – Loukas Louka and Labour – Sotiroulla Charalambous) and reassigned two others to new posts – former diplomat Erato Kozakou Markoullis from Communications to Foreign Affairs, and Demetris Eliades from Agriculture to Defence.
The other new ministers are Giorgos Demosthenous (Education and Culture), Efthymios Flourentzos (Communications and Works), Praxoulla Antoniadou (Commerce Industry and Tourism), Sofoklis Aletraris (Agriculture, Natural Resources and Environment) and Stavros Malas (Health).
Already, the socialist party Edek said that Flourentzos will be expelled from the party as it did not wish to take part in the reshuffle and was among those calling for fresh elections.
President Christofias also kept government spokesman Stephanos Stephanou in office, as well as his confidente and Undersecretary to the President Titos Christofides, while he created a new post of Undersecretary for European Affairs and appointed UN and Brussels diplomat Andreas Mavroyiannis.
Opposition Democratic Rally (Disy) spokesman Haris Georgiades said that “today’s reshuffle simply confirms the tragic political isolation of the President and the absence of any way out of the dead end that he and his party have brought us to.”
The heaviest burden is on the new Finance Minister who is faced with a “zero growth” rate of the economy, adjusted down from a slow rate of 1.5% initially estimated prior to the blast that is expected to cost the economy some 1 bln to 3 bln euros to restore. Kazamias has to come up with austerity measures that will be accepted by the militant trade unions, considering that Cyprus can only service its debt up to the end of the year, with nearly 600 mln of loans maturing in January and February 2012.
Socialist Edek vice president Sophocles Sophocleous called on Christofias to resign while the smaller Green party leader, Ioanna Panayiotou, also called for early elections.