Cyprus’ Finance Minister Vassos Shiarly is ready to step down if President Demetris Christofias does not sign a memorandum of agreement with international lenders to release a bailout needed to keep the economy from tanking, the newspaper Simerini reported.
He wouldn’t be the first – two other finance ministers have quit on Christofias, the embattled Communist who failed to bring a peace agreement for the divided island he vowed he would, and under whose leadership the economy has floundered. Cypriot banks were brought to the edge of ruin by their exposure to Greek bonds.
Christofias said he wants the bailout funds but will not go along with austerity measures demanded in return, similar t those that have pushed Greece deeper into recession. The government sent a counter-proposal to the Troika of the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB) although some political leaders said they were not informed.
Government spokesman Stefanos Stefanou defended the decision, saying that the Troika wants confidentiality and that there had been enough consultation with political parties. He said that there was no confirmed date Troika inspectors to return and that it will be announced once the government gets an answer on its counter-proposals.
Just before the government sent its response, Christofias had a meeting with the trade unions in the hopes of appeasing their anger over pay and benefits cuts that would be part of the conditions of receiving the bailout.
Other conditions include abolishing automatic pay raises, privatizing some government organizations and ending a month’s bonus for workers as part of 925 million euros ($1.2 billion) in cuts. The state has enough cash until the end of November, said Shiarly, who has indicated that he hopes that negotiations will be wrapped up by the end of this month.
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