A British university’s financial economics professor was appointed Cyprus’ new Central Bank governor Saturday, as the eurozone member struggles to contain a stagnating economy and banking system roiling under heavy exposure to Greek debt.
Government Spokesman Stefanos Stefanou said President Dimitris Christofias wished Panicos Demetriades every success in the “difficult task” of helping to return the eurozone member’s beleaguered banking system to solid ground.
The 53-year-old Demetriades, who gained a Ph.D. in Economics at Cambridge University, faces a daunting task amid fears that the island’s major banks, which are trying to cope with record losses due to Greek exposure, may need to be bailed out.
“Everyone needs to rally around the new Central Bank governor,” Stefanou told a news conference. “The government will continue to work closely with the Central Bank to deal with all these problems.”
Opposition parties had pushed for Demetriades predecessor Athanasios Orphanides to be reappointed for another five-year term, arguing that the highly regarded economist is better able to help negotiate Cyprus out of the crisis.
Michalis Sarris, chairman of the island’s second biggest lender Cyprus Popular Bank — which is the most exposed to Greek debt, said he would be “particularly saddened” by the departure of Orphanides whom he hailed as an “outstanding” governor.
Orphanides, who had also worked at the U.S. Federal Reserve as a senior adviser, fell out with the Soviet-educated Christofias after criticizing what he saw as the government’s tepid response to calls for urgent spending cuts, especially on the bloated public sector and introducing fiscal reforms.
(source: AP)
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