NICOSIA, Cyprus: Finance minister Michalis Sarris resigned Tuesday after less than five weeks in the job, as the government begins an investigation into how the country’s economy nearly collapsed last month.
President Nicos Anastasiades accepted Sarris’ resignation, which came as Cyprus finalized the details of its bailout with international creditors. Harris Georgiades, the 41-year-old former labor minister, will become the new head of finance.
Sarris, 66, was appointed to the position after Anastasiades’ Conservatives won general elections in February, days before the island was overwhelmed by its financial crisis.
The minister, a former World Bank official who helped negotiate Cyprus’ euro membership in 2008, has come under strong criticism for his handling of the bailout negotiations. On top of that, he was last year the head of Laiki Bank, one of the troubled banks at the heart of the country’s financial problems.
Sarris told reporters that he decided to step down to not compromise the work of investigators.
“To ease the work of this committee, I’ve thought that it would be appropriate for me to put my resignation at the disposal of the president of the republic, which I did,” he said.
Anastasiades praised the move, hailing Sarris’ political sensibility.
Earlier Tuesday, the president appointed a panel of three former supreme court judges to investigate the country’s plunge to the verge of bankruptcy.
Cyprus has been given a $12.8 billion bailout from its lenders after agreeing to overhaul its oversized banking sector flush with foreign deposits, including billions from Russia.
To secure the bailout, Cyprus had to agree that bondholders, investors and savers in the country’s two biggest banks — Bank of Cyprus and Laiki — take a hit. Laiki, the country’s second-largest lender, will be broken up, with depositors with more than $128,000 taking major losses. Savers with more than $128,000 at the Bank of Cyprus could face losses of up to 60 percent on their savings as part of the rescue deal.
Anastasiades himself has come under scrutiny over the crisis: a local newspaper has alleged that a company apparently co-owned by one of his relatives took money out of Laiki days before the country agreed to its bailout. The president Tuesday urged the judges to kick off their probe by investigating his family’s business dealings.