Cyprus's anti-crisis policy irresponsible

Rating agency Moody's on Friday lowered the creditworthiness of the Republic of Cyprus to just one notch about junk status. Moody's justified the step by pointing to the Cypriot banks' strong involvement in Greece. The liberal daily Cyprus Mail criticises the hesitant anti-crisis policy of the government: "Things were so desperate the Central Bank governor on Saturday spoke of the need to raise taxes, a catastrophic measure during a recession. But there is no other option given the government's refusal to address the structural rigidities in the government budget, for fear of upsetting the unions. The suspicion is that the government would prefer to enter the support mechanism and have unpopular measures imposed on it, rather than be burdened with the political cost of such decisions. It is a colossally irresponsible approach because the harm this does to Cyprus as a financial services centre may be irreparable."

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