Anastasiades wins Cypriot presidency, wants quick bailout

26/02/2013

Economic woes face him, but so do stalled re-unification hopes.

By Andy Dabilis in Athens and Menekse Tokyay in Istanbul for Southeast European Times -- 26/02/13

photo

Cyprus President Nicos Anastasiades waves during celebrations in Nicosia on February 24th. [AFP]

Cyprus' newly-elected conservative president, Nicos Anastasiades, faces an immediate challenge trying to negotiate a critical bailout loan with international lenders to keep the economy from collapsing, as well as re-starting talks with Turkish Cypriots to try to re-unify the divided island.

He easily won the Sunday's (February 24th) runoff election, defeating the Communist-backed Stavros Malas by 57.5 percent to 42.5 percent, to replace the outgoing Communist Demetris Christofias, whose single term was marked by futility and blame for economic woes, failed negotiations over unification and for a munitions dump explosion.

But for the first time since an armed conflict with Turkish forces in 1974 that seized the northern third of the island, Cypriots were more concerned about the economy. Cypriot banks were brought to the edge of insolvency by their large holdings in Greek bonds that were devalued by 74 percent last year as Greece desperately tried to write down its debt.

Christofias, educated in Moscow, had talked with European officials, and even Russia, for eight months in hopes of securing loans.

Anastasiades, a 66-year-old lawyer who is a member of the European People's Party that has 16 of the 27 EU heads of state, said he would secure a deal and bring Cyprus closer to Europe and apply for Cypriot membership in the NATO-affiliated Partnership for Peace.

"We want Europe on our side. We will be absolutely consistent and meet our promises. Cyprus belongs to Europe," Anastasiades told jubilant supporters. "We will restore the credibility of Cyprus in Europe and internationally. I promise you."

He is to be sworn in on February 28th and assume power the next day with no time to celebrate as European Union officials, some of whom are skeptical about providing aid because of the island's reputation as a money-laundering haven, want to reach agreement by the end of March.

So anxious are Cypriots for economic stability that they are willing to accept tough austerity measures from the Troika of the EU-IMF-ECB in return because the country is running out of cash fast and could need up to 17 billion euros, almost equivalent to its gross domestic product.

George Leventis, director of the International Security Forum in Cyprus, said Anastasiades will have his hands full.

"It seems he's fully aware he's the captain of the Titanic. …He uttered caution that Cyprus needs to be sober and turn words into deeds to put the economy on the right track," he told SETimes. "He's got a good mandate to fight to lessen the austere measures the Troika will impose so Cyprus doesn't lose social cohesion."

The numbers aren't in Anastasiades' favor as all the rescue plans, from a bailout to debt write-down make it unlikely the country could pay back what it will borrow and further shake a Eurozone already rattled by the ongoing Greek economic crisis.

Andreas Theophanous, professor of political economy at the University of Nicosia and president of the Cyprus Center for European and International Affairs, told SETimes that, "Cypriots have accepted the need for some austerity and measures have already been taken but the EU needs to show some flexibility and solidarity."

Theophanous, an American-educated economist, added that, "It's better to have a program that will allow economic recovery sooner than later … fine tuning will be needed to clear the mess without going through serious social cost."

But also lingering is the thorny question of trying to bring the island together again after nearly 40 years of failed talks. Bahadir Kaleagasi, international coordinator of TUSIAD, the Turkish Industry and Business Association, said the new president should seize an opportunity to solve Europe's most intransigent problem.

"The leaders of Cyprus should be pressured to immediately negotiate a new settlement hoping that they would be more visionary to grasp real challenges that they have been missing to address because they have been so introverted in their small island's unproductive issues," Kaleagasi told SETimes.

Shortly after his victory, Anastasiades extended an olive branch to Turkish Cypriots by stating that, "What interests us is a solution that will not only be accepted by Greeks, but of course by Turkish Cypriots as well, particularly a solution that creates the expectation of development."

But Didem Akyel Collinsworth, a Cyprus analyst at the International Crisis Group, said Anastasiades will be under intense pressure over the economic problem and could be distracted.

"He should remember that time is of the essence on this issue and maintain a pro-compromise approach, and keep an open mind on alternatives to a bizonal, bicommunal federation," Akyel told SETimes.

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Anastasiades supported the "yes" vote for the UN reunification proposal in 2004, known as the Annan plan, to end the divided status of the island, even though it was overwhelmingly rejected by Greek Cypriots.

Ahmet Sozen, director of the Cyprus Policy Center in Famagusta and a professor of political science and international relations at Eastern Mediterranean University, told SETimes that Anastasiades will need to quickly seal a bailout deal, but that, "he will be looking for ways – formal and informal – to open dialogue with Turkey and try to normalize relations."

Stavros Karkaletsis, head of the Athens-based Hellenic Center for European and International Analyses who specializes in Cypriot affairs, told SETimes that, "Turkey wanted Anastasiades because they believe in Ankara he’s going to be softer negotiating a political solution for the Cyprus problem … (but) he is going to exist as a patriot." He added, "I am not so sure that he is going to show the same resistance power by handling the economy and bailout."

(Kathimerini, 25/02/13; Reuters, 24/02/13; Associated Press, 24/02/13)

This content was commissioned for SETimes.com.
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