Greek Cypriot gov’t says no ditching euro

Greek Cypriot gov’t says no ditching euro

NICOSIA - Reuters
Greek Cypriot gov’t says no ditching euro

Greek Cyprus President Christofias drinks his coffee in front of a EU flag in Nicosia. AP photo

Greek Cyprus ruled out late on Sept. 21 any question of it abandoning the eurozone, only hours after the principal backer of its government floated the option if bailout conditions were too tough.

Greek Cyprus, the current term president of the European Union and a eurozone member since 2008, was forced to seek aid from its EU partners and the IMF in June to support its two main banks battered by exposure to debt-crippled Greece.

“For the government and the President of the Republic there is absolutely no issue of exiting either the eurozone or the European Union,” government spokesman Stefanos Stefanou said in a statement.
Hours earlier Andros Kyprianou, leader of AKEL, the main supporter of President Demetris Christofias’s left-wing government, was quoted as telling news website that such an option could be considered if conditions imposed by lenders were unbearable.

Leaked documents show the troika - lenders from the IMF, the European Central Bank and the European Commission - have demanded pay cuts in the public sector, privatizations and pension reforms, though negotiations with Greek Cyprus are inconclusive as Nicosia prepares counter-proposals
The troika’s suggestions will not go down well with a highly-unionized public sector, particularly ahead of a parliamentary election scheduled for February 2013.