Veteran rightwinger wins 57% of the vote and is likely to usher in reforms to help island out of economic crisis
Their nation's solvency hanging by a thread, Greek Cypriots elected the veteran rightwinger Nicos Anastasiades to become their seventh president on Sunday giving the pro-bailout politician a landslide victory not seen in more than 40 years – and bringing the euro zone's next rescue package closer.
The Democratic Rally party leader won almost 57.48% of the vote, in what his top campaign official described as a "sure, clear and strong" mandate to forge ahead with the necessary reforms to exit the island's worst crisis in decades. His communist-backed opponent, Stavros Malas, had fought an electric and often bitter campaign emphasising the need for growth over austerity.
The result was met with jubilation by Anastasiades' Disy party with euphoric supporters pouring into the streets of the divided island, honking horns and waving flags.
With the ex-British colony facing financial meltdown in the wake of the huge losses sustained by its banking system when Greece restructured its debt, the election had assumed a significance not seen since independence in 1960.
Foreign lenders at the EU and IMF had hoped Anastasiades would win, seeing the 66-year-old lawyer as a pair of safe hands in what could be tortuous times ahead as both try to finalise a rescue programme to keep the island's recession-hit economy afloat.
The German chancellor, Angela Merkel, who recently attended a caucus of European conservative leaders on the island, had openly backed his bid.
Although the euro zone's third smallest economy – contributing less than 0.2% to the bloc's total output – Cyprus's debt and banking woes are now seen as the lever that could tip the single currency back into fully-fledged crisis.
Indicative of those fears, the global credit rating giant Standard and Poor's last week described the island, whose banking sector is eight times the size of the local economy, as being at growing risk of default.
Anastasiades, who assumes office on 1 March, has promised to form a government of "national salvation" in a bid to keep bankruptcy at bay.
Throughout the campaign, he pledged to use his good ties with EU peers to help finalise a bailout expected to reach €17bn, the equivalent of the island's entire GDP.
More than ever, say political analysts, the new president will also need to reignite badly dented international trust in Nicosia's ability to not only implement unpopular austerity but structural reforms following months of foot-dragging by Demetris Christofias, the island's outgoing president.
A veteran communist, Christofias had held up bailout negotiations by refusing to enact privatisations and the overhaul of a banking sector whose disproportionate size has been largely blamed for the country'splight.
The sheer scale of the island's rescue needs has also made a quick fix difficult. With around €10bn required to recapitalise banks and €7.5bn to service debt and government expenditure, the loans would push the island's debt to as much as 150% of gross domestic product – well in excess of the 120% ceiling regarded as sustainable by the IMF.
 |
| READ THE ORIGINAL POST AT www.guardian.co.uk |