Cypriot finance minister quits, money controls eased

Cypriot Finance Minister Michalis Sarris has resigned as a judicial panel prepares to investigate the role that he and others played in a financial crisis that pushed the eurozone member to the brink of bankruptcy.

Sarris submitted his resignation Tuesday, saying it was an appropriate step given the need to cooperate with the three-judge commission appointed by the government earlier in the day. He previously served as chairman of Cyprus’ second largest lender Laiki Bank, whose risky investments led to its break-up last month under the terms of an international bailout for the Cypriot economy.

Cypriot President Nicos Anastasiades accepted Sarris’ resignation and appointed Labor Minister Haris Georgiades to the finance portfolio.

Mr. Anastasiades urged the judicial panel to examine his own business dealings and those of his relatives as part of the investigation into the crisis. Local media have reported allegations that the president’s family members used inside information to take money out of the country before deposits were locked down by the bailout deal.

As part of the rescue package, international creditors forced Cyprus to agree that depositors with more than $130,000 in Cypriot banks would lose up to 60 percent of their savings. Cypriot officials said Tuesday the creditors have agreed to let those depositors access 10 percent of the remaining funds.

In another move to ease the strain on Cypriots, the island nation’s central bank on Tuesday partially relaxed financial transaction controls aimed at preventing a massive flight of money from the banking system.

The central bank raised the ceiling on transactions not requiring its approval from $6,400 to $32,00, and authorized the use of checks worth up to $11,500.


(Cyprus president Nicos Anastasiades, left, talks to German chancellor Angela Merkel at a summit in January 2013. Photo: European People’s Party via