NEWS

Crisis-hit Cyprus reshuffles cabinet

Under the shadow of a growing political and economic crisis, Cyprus President Dimitris Christofias reshuffled his cabinet Friday, giving the crucial Finance Ministry portfolio to Kikis Kazamias, an economist with strong European Union connections and close ties to the president?s ruling Communist-rooted party AKEL.

Christofias brought six new ministers into the 11-member cabinet, with others being transfered to different posts, but his efforts to bring members of opposition parties into the mix failed, meaning that his party will face difficulties pushing through crucial austerity measures.

Kazamias, who is a former member of the European Court of Auditors, echoed statements by Cyprus government officials in recent weeks that Nicosia?s financing needs were covered and that the tiny Mediterranean state would not become the next European Union country to seek a bailout.

These comments were in sharp contrast of those by top bankers on the island who have warned that Cyprus could become the fourth eurozone nation, after Greece, Portugal and Ireland, to seek support funding unless immediate action is taken to push through measures.

?There is no such issue at the moment,? Kazamias said. Asked whether the country would need a bailout in a few months, he told reporters: ?We should avoid it.?

The crisis in Cyprus has been long coming with economic problems becoming evident earlier in the year and prompting an initial downgrade by Fitch in May, with Moody?s and Standard