The junior partner in Cyprus' two-party coalition has quit President Demetris Christofias' government over disagreements about economic and political reforms.

The decision by the centrist Democratic Party leaves Mr. Christofias' communists with just 19 deputies in the 56-member House of Representatives. It also weakens his position in reunification talks between Greek Cypriot and Turkish Cypriot factions. The island nation has been divided since 1974.

The Bank of Cyprus has called for urgent government action to prevent a financial crisis that would force the island to seek a bailout from the European Union. The warning comes after rating agencies Moody's and Standard and Poor's last week downgraded Cyprus based on a negative outlook for its economy and budget.

The Mediterranean island, divided into Greek and Turkish-controlled entities, has been in political and economic turmoil since a munitions blast last month at a naval base destroyed the island's main power station, costing billions of dollars and killing 13 people. Since the blast, demonstrators have called on Mr. Christofias to resign.