Cyprus finance ministry to assume debt management on Aug 1

The finance ministry will take over management of public debt from its central bank from August 1, opting against the creation of an independent agency, Finance Minister Charilaos Stavrakis said.
He said the decision to revoke management powers from the central bank was an "institutional" issue but failed to be more specific. There are only five countries within the 27 member EU where debt management still rests with the central bank, he said.
Management would be assumed by a division in the finance ministry separate from its budget and fiscal control units.
"We had the option of creating an independent agency, at an additional cost to the taxpayer of two million euros per year, or use present resources," Stavrakis told members of parliament.
The Central Bank of Cyprus had been managing the island's debt since its creation in 1963.
The island's centre-left government decided to assume debt management in 2008, issuing a two-year notice. It said it was enacting a decision taken by a previous administration in 2002.
Citing recommendations by European Central Bank President Jean-Claude Trichet, the central bank said there should be a distinct separation of duties between debt management and divisions in the ministry handling budgetary and fiscal control.
According to latest data, Cyprus has some 9.9 bln euros in total public debt, of which 4.6 bln is external debt. Its public debt levels are 62% of its gross domestic product.