Cyprus, thrilled to be taking over presidency of the European Union on 1 July, has a more immediate problem. Several of the largest banks there last month were essentially downgraded to junk status.On May 22 New York and London-based Fitch Ratings Ltd. downgraded to junk status some of the bonds issued by the Cyprus Popular Bank, Bank of Cyprus and Hellenic Bank, the island’s three main financial institutions. On 24 May Moody's credit agency confirmed Fitch Ratings Ltd.’s evaluation of Cyprus Popular Bank, also downgrading its rating.Wait,…