Cyprus president gives warning to prospective lenders

2013-01-02 23:15:36 GMT2013-01-03 07:15:36(Beijing Time)  Xinhua English

NICOSIA, Jan. 2 (Xinhua) -- Cyprus President Demetris Christofias gave warning on Wednesday to international lenders that he will not sign a provisional bailout deal if it contains provisions he is opposed to, even though the deal was negotiated by a team of government ministers.

Christofias told a festive event of his own left wing AKEL party that he will reject the deal if lenders come back with demands for the privatization of state-owned businesses, such as telecommunications and electricity.

The issue of privatization may come up again for negotiations with the troika - the European Commission, the European Central Bank and the International Monetary Fund - under a provision of the interim memorandum of understanding in case the sum needed to recapitalize the crippled banking system pushes the sovereign debt to an unmanageable level.

"I hope that the troika will not demand privatization of semi-governmental organizations before signing the memorandum. If they do so, I have not to take such a step," said Christofias, who is less than two months away from the end of his five-year tenure.

The recapitalization amount is expected to be established after an audit report on the banks is submitted on Jan. 15, ahead of a crucial Eurogroup meeting a week later.

Christofias, who has been criticized for the present state of the economy, claimed that in negotiations with the troika, the government had managed to safeguard essential rights for the working people.

"The economic crisis was not caused by the government but by the banks and businessmen," said Christofias.

Though the opposition parties have endorsed a tough austerity package demanded by the troika, they blamed the government for being too late to react to the economic crisis, thus making international bailout a necessity.

Finance Minister Vassos Shiarly said on Wednesday he expected the Cyprus bailout deal to be examined by the Eurogroup on Jan. 21, but he said it is possible that there may be a delay in reaching a final decision.

That will leave the bailout agreement to be signed by a new government after a presidential election in February and leave the government almost insolvent.

Shiarly said there is money only sufficing for government needs until the end of March.

Christofias is not contesting the election after a series of setbacks for his government, which include a deep recession of the economy continuing for two years now, and a disastrous munitions explosion in July, 2011, which killed 13 people and wrecked the island's largest and newest power station.

Opinion polls suggest the election will easily be won by an opposition right wing Democratic Rally party leader, Nicos Anastasiades, who is also supported by Democratic Party, the biggest center party.

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