Cyprus is at the forefront of most market thought today as the tiny country’s government tries to push through revolutionary bailout measures that would see all of the country’s depositors lose between six and ten percent of their savings. According to a Businessweek report, the country’s finance minister had resigned in protest; there are dissenters on that point, however.
This afternoon major news organizations like Sky News and Reuters reported that Michael Sarris, Finance Minister of the Mediterranean Island had offered his resignation to the head of the country’s government. The organizations apparently had sources on their side, but Sarris himself has vehemently denied the story.
A Greek newspaper, Kathimerini, ran a story claiming that the Cypriot finance minister would be replaced upon his return from Moscow. Sarris is currently in Moscow in order to smooth relations between Russia and Cyprus; a large amount of money deposited in banks in Cyprus, is owned by Russians. The Russian government has been vocal in its disapproval of the plan.
The Greek report said that Sarris would lose his job because he had lost the favor of the country’s President, Nikos Anastasiades. Anastasiades said earlier today that he expects the vote on the bailout to fail because the government has lost support of some of its deputies, and the opposition is steeled against the plan.
Michael Sarris was accused by many people in Cyprus of being too eager to bow to the will of European powers. His acceptance of the strict terms of the bailout has made him an unpopular man in his native island, though he is hardly more popular in Moscow, his current location.
The kaleidoscope of stories surrounding the position of the finance minister will do nothing to relax markets nervous about the country’s short-term future. Cyprus may be small, but its government’s decision may have a large bearing on the future of Europe. Sarris is on the hook for those decisions, and it appears he is losing his job, through resignation or firing.
Sarris was only appointed to his position at the end of February, and has had a tough time in office. He has made a statement denying that he intends to resign, though he did not reference reports that he would be fired from his position.