Cyprus president warns of difficult days ahead

Cypriot President Nicos Anastasiades congratulates the new Finance Minister Haris Georgiades (R) during his brief ceremony oath affirmation at the presidential palace in Nicosia yesterday. Photo:AFP

Cypriot President Nicos Anastasiades warned on Wednesday of "difficult days ahead" as he swore in a new finance minister for an island struggling to recover from a near financial meltdown and the need for a crippling eurozone bailout.
Anastasiades said this would entail "firstly, collectivity and, secondly, consistency and fiscal discipline and all those measures that will contribute to kick-starting the economy as soon as possible."
"I have no doubt that you will not only accomplish your task to the full, but in the best way possible that is worthy of your predecessor," Anastasiades told the new minister, Haris Georgiades, at the swearing-in ceremony.
Georgiades, a 40-year-old British-educated economist who became labour minister when Anastasiades was elected in February, took up his new post after Michalis Sarris stepped down on Tuesday.
Sarris had been chairman last year of failed Laiki Bank, whose collapse was a major contributor to the crisis. He said he was resigning to cooperate with a panel of judges appointed to investigate the causes of the crisis.
His departure came as the government wrapped up talks with the IMF, European Commission and European Central Bank that will open the way for Cyprus to receive a 10-billion-euro ($12.8 billion) bailout.
The deal, which must be ratified by eurozone finance ministers and national EU parliaments, will see Cyprus receiving the loan with an interest rate of between 2.5 and 2.7 per cent. It is repayable over 12 years after a grace period of a decade.
On Wednesday, International Monetary Fund managing director Christine Lagarde said the IMF's contribution to the package would be approximately one billion euros.
"This is a challenging programme that will require great efforts from the Cypriot population," Lagarde said in a statement, but it "provides a durable and fully financed solution to the underlying problems facing Cyprus and provides a sustainable path toward a recovery."