Cyprus Finance Minister resigns over economy crisis

Michalis Sarris, the Finance Minister of Cyprus,has resigned following an investigation of the near downfall of the nation’s economy. The Finance Minister was criticised for the way he handled business with international creditors in regards with the nation’s £8.45bn bailout.

Nicos Anastasiades, the president who won the election in February, ordered a panel of 3 supreme court judges to investigate the near bankruptcy of the country. Mr. Anastasiades stated that citizens suffering the burden of certain “omissions and actions” need to witness the responsible party punished.

Mr. Anastasiades also encouraged the panel to run an investigation on business dealings his family was allegedly involved in while he answered to accusations made by the news regarding a co-owned company that withdrew money from Laiki, the second largest bank of the country.

According to the deal, British savings and current accounts in credit were transferred to the UK subsidiary’s Bank of Cyprus, which is under the jurisdiction of the new Prudential Regulation Authority of the Bank of England.

Andrew Bailey, the chief executive of Prudential Regulation Authority and a deputy governor of the Bank of England, spent a week doing everything he can to establish deals to protect savers. The deal with UK does not cover account holders whose accounts are in overdraft, as these accounts are instead frozen at Laiki Bank UK and are not to be transferred. Credit customers of Laiki Bank, however, will be transferred, with their overdraft facilities cancelled by the bank.

Strict capital controls were imposed on banks, while operations were halted for 13 days and resumed last Thursday. These capitol controls will more likely be implemented for a period of at least a month despite the central bank’s loosening some of its restrictions.