Thursday, July 21, 2011

Cyprus Warns It May Need Financial Help

Wall Street Journal
July 20, 2011

Cypus' central bank governor warned that the island nation is in a state of emergency and may need financial support after a blast destroyed its main power station, a senior Cypriot official said Wednesday.

"To avoid the worst, including admission into a support mechanism, further and more drastic measures must be taken immediately," the official quoted Central Bank Gov. Athanasios Orphanides as saying in a letter to Cyprus's president, Demetris Christofias.

Mr. Orphanides is a member of the European Central Bank's governing council. It was his first warning that Cyprus, a member of the euro zone, may need outside help. The tiny nation already has been under increasing pressure from credit- rating agencies over its financial exposure to Greek banks.

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