Cyprus-Forum.com

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27 Jul 2011 14:51

Source: reuters // Reuters

NICOSIA, July 27 (Reuters) - The junior partner in Cyprus's two-party coalition 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.

The Democratic Party (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 percent of the country's electricity output.

Earlier on Wednesday, Moody's cut Cyprus's sovereign rating to Baa1, three notches above junk status, because of the crisis and the exposure of Cyprus banks to Greek debt .

"The President of our party has called on the DIKO ministers to place their resignations at the disposal of the President of the Republic in order to facilitate and expedite decisions and initiatives that we all expect," DIKO 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 was also a DIKO member.

The Vassilikos plant was destroyed when the cargo of munitions stored in a military base several hundred metres away from the plant exploded.

Since then, Cyprus's 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 one billion euros, a significant amount for the 17.4-billion-euro economy. The island's central banker has warned the island may require a bailout from the EU.

(Writing by Michele Kambas, editing by Sonya Hepinstall)

http://www.trust.org/alertnet/news/cypr ... -quit-govt