Cypriot president insists he will not step down

THE PRESIDENT of Cyprus Demetris Christofias insisted he would not step down, following calls for his resignation over a munitions…

THE PRESIDENT of Cyprus Demetris Christofias insisted he would not step down, following calls for his resignation over a munitions explosion that destroyed the republic’s main power plant and deepened economic woes.

His statement came after his cabinet resigned ahead of a reshuffle that was intended to broaden representation, following widespread public anger over the fallout of the explosion.

Government spokesman Stefanos Stefanou said yesterday President Christofias would reconstitute his 11-member cabinet “soon” following consultations with party leaders. He said the president sought “to appoint a government of wider acceptance to achieve consensus on economic measures and restore public trust”.

Mr Christofias – the first president to be elected from Akel, the communist party – was forced to take this route when the two remaining ministers from his junior coalition partner, the centre-right Democratic party (Diko) resigned, and the finance minister indicated his intention to follow suit.

The defence and foreign ministers had already stepped down over the government’s handling of 98 containers of explosives confiscated under UN pressure in 2009 from a freighter sailing from Iran to Syria and left standing in the open at a naval base.

The July 11th blast killed 13 people, devastated the base and nearby villages and cut the republic’s electricity supply by 50 per cent.

People have been asked not to use air conditioners and endure daily two-hour cuts at a time when temperatures soar to 40 degrees. Tourist areas – major money-earners – have not been affected.

Diko laid down five conditions for returning to the coalition. The new government would have to deal promptly with the energy crisis, ensure that the investigation into the blast was speedy and impartial, regain public confidence, implement a workable austerity plan and deal with the lack of progress in negotiations with the Turkish Cypriots aimed at reunifying the island.

The blast dealt a severe blow to Mr Christofias’s credibility at a time he was trying to tackle the powerful trade unions over an austerity package and to advance in fruitless UN-brokered unity talks.

Last week prospects for the negotiations were dashed when Turkish prime minister Recep Tayyip Erdogan – who was visiting the Turkish-occupied north – said that territorial and political compromises proposed in 2004 were no longer on the table and threatened to boycott the EU if Cyprus assumed the rotating presidency, as scheduled, in mid-2012.

On Wednesday, financial agency Moody’s downgraded Cyprus’s debt and credit rating by two points due to the costs of the blast, the lack of agreement on how to cut spending to meet euro zone requirements and the banking sector’s exposure to Greek debt.

Cyprus’s projected growth rate for 2011 has fallen from 1.8 per cent to zero. Cyprus rejects suggestions it could follow Ireland and Greece by calling for a bailout.

EU experts indicate losses caused by the explosion to the €17.4 billion Cypriot economy could reach €2 billion.