Cyprus could need bailout after blast

Cyprus may need foreign financial aid unless drastic action is taken to deal with the impact of an explosion which decimated its largest power station, central bank governor Athanasios Orphanides has warned.

Already under market pressure because of its links to debt-laden Greece, economists have warned the island could face a bill of up to €1 billion after the blast a week ago knocked out half of its power supply.

"To avoid the worst, including admission into (a) support mechanism and all that that entails for the economy ... further and more drastic measures must be taken immediately," Orphanides said in the July 18 letter sent to Cypriot president Demetris Christofias and copied to political party leaders.

"Weighing up all the facts, the unfavourable international environment, the difficulties in resorting to external borrowing and the additional economic impact from the recent events, I believe that the economy is in a state of emergency, comparable to that of 1974," Orphanides wrote. 

Source: Independent.co.uk