Michael Sarris, Finance Minister of Cyprus, resigned from his position after concluding negations with foreign lenders regarding the bailout, which compelled the small country to pass losses on bank depositors in exchange for aid, according to report from Reuters.

Michael Sarris

Last month, the government of Cyprus sent Sarris to Moscow to seek for aid after the parliament rejected a bailout deal, which was described unfair by leaders and politicians in the country. The European Union said Cyprus must produce one third of the bailout money it is requesting, but the most controversial part of the bailout deal is the payment of one-time tax (6 to 10%) on the savings of ordinary depositors. According to Sarris, he accomplished his main objective in Moscow to close a deal with lenders in Moscow.

Regarding his resignation as Finance Minister, Sarris said it appropriate for him to vacate his position because he is one of the people under investigation in connection with the collapse of the banking system in Cyprus. The government accepted his resignation.

Sarris said, “I believe that in order to facilitate the work of (investigators) the right thing would be to place my resignation at the disposal of the president of the republic, which I did.”

He also said that it is unclear when the remaining capital controls will be lifted. The government implement a partial relaxation of currency controls, and raised the maximum amount for financial transactions that do not require the approval of the central bank. However, the government maintained a majority of the restrictions.

According to a decree issued by the Finance Ministry on Tuesday, the maximum amount on transactions was raised from €5,000 to €25,000. The government also allowed the use of checks worth up to €9,000 per month.

In addition, the decree implemented a cash withdrawal limit to €300 per day and maintained the €1,000 limit travellers can take on their trip overseas.

Sarris signed the decree on April 2, and according to Cyprus officials, it would take one month before they can remove the restrictions.

Cyprus President Nicos Anastasiades said he was compelled to accept the terms of the deal imposed by lenders prevent a default and exit from the euro zone. The government of Cyprus is required to implement measure to improve its finances until 2012. The government will begin receiving aid in May. It will repay its rescue loan over 12 years with 2.5 percent interest.

Last week, chairman of the largest bank in Cyprus resigned. The governor of the central bank of Cyprus, Panicus Demitridus also asked the Cyprus Bank CEO Yiannis Kipri and all the board of directors of the bank to submit their resignation.