Cyprus News Agency: News in English, 11-12-06

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From: The Cyprus News Agency at <http://www.cyna.org.cy>

CONTENTS

[01] FiMin: Possible lowering of Cyprus rating by S&P`s due to Eurozone

crisis

[01] FiMin: Possible lowering of Cyprus rating by S&P`s due to Eurozone crisis

According to an official announcement, issued here Tuesday by Finance Ministry, Standard & Poors Rating Services have announced on Monday that it maintain the long-term sovereign credit rating on the Republic of Cyprus to BBB. In addition, S&Ps have also maintained the CreditWatch negative status of the long-term rating on Cyprus and placed its short-term ratings on CreditWatch with negative implications.

According to S&Ps the reason for that decision, except from the need for financial consolidation measures and the Cypriot banking systems exposure to Greek bonds, is the deepening of the political and financial crisis in Eurozone.

S&Ps conceive that this crisis in Eurozone works restrictively to the lending capability of the Republic of Cyprus and reduces the prospects for economic growth.

In addition, S&Ps believe that the weakness of the European political leaders to monitor the financial crisis reflects structural weaknesses on decision making process within the Eurozone and the EU with negative consequences on the effectiveness of Cyprus economic policy.

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