Cyprus to take austerity measures after explosion

July 22, 2011 - 8:14 AM

NICOSIA, Cyprus (AP) — The Cyprus government says it has agreed with party leaders on an initial austerity package to buoy the Mediterranean island's beleaguered economy in the wake of a deadly blast that has triggered an energy crisis.

Government spokesman Stefanos Stefanou did not disclose details of the package, but says it's the first of several to tackle both the island's fiscal and structural problems.

The announcement comes after Cyprus' top banker warned earlier this week that the Jul. 11 blast which killed 13 and devastated the main power station may force the European Union member to seek a bailout if tough austerity measures aren't swiftly taken.