Embattled Cypriot President Dimitris Christofias appointed a new 11-member cabinet Friday in a bid to pass badly needed political and economic reforms amid a crisis sparked by a blast that damaged the island's main power station, according to dpa. Christofias appointed longtime ally and former communications minister Kikis Kazamias as finance minister, Erato Kozakou as foreign minister and Demetris Eliades as defence minister. The president decided to keep Neoclis Sylikiotis as interior minister, Koukas Louka as justice minister and Sotiroulla Charalambous as labour minister. The previous cabinet resigned on July 28 in response to an energy crisis which is threatening to plunge the island into a recession. The political and economic crisis was triggered by the accidental explosion last month of confiscated Iranian munitions at a naval base, which killed 13 people and destroyed the island's biggest power station. The communist AKEL party was seen to have handled the crisis badly and public support deteriorated sharply. One party, the DIKO, withdrew from the governing coalition Wednesday over differences on economic reforms and ongoing talks on reunifying the divided island. With only 19 deputies in the 56-member parliament, AKEL faces difficulties getting legislation through the house. As the new finance minister, Kazamias - who has served on the European Court of Auditors - faces the tough task of reining in public spending amid growing concern that Cyprus could become the fourth eurozone country to seek a bailout. Borrowing costs rose last week when credit rating agencies Moody's and Standard and Poor's downgraded Cypriot sovereign debt over concerns about the economic repercussions of the explosion and the domestic banking system's exposure to Greece. Reports said the withdrawal of coalition partner DIKO also leaves Christofias at a disadvantage in UN-led peace talks over reunification of the island, where he will need the support of his political allies. DIKO and another coalition party, the socialist EDEK, have long been at odds with Christofias over this handling of peace talks. They have urged him to withdraw proposals for the Greek and Turkish communities to share governance through a rotating presidency. Cyprus has been divided into a Greek Cypriot south and Turkish Cypriot north since 1974, when Turkey invaded in response to a Greek-led coup. Only the Greek Cypriot south is internationally recognised and a member of the European Union. With Cyprus due to assume the rotating EU presidency in the second half of 2012, UN Secretary General Ban Ki-moon has urged both communities to reach an agreement by October.
