Bloomberg News

Cypriots Weigh Economy, Terms for Bailout in Feb. 24 Election

February 22, 2013

Following is a summary of key facts about Cyprus, which holds the final round of elections for a new president on Feb. 24. The president will be called upon to sign an international bailout agreement aimed at preventing a financial collapse in Cyprus.

Nicos Anastasiades, leader of Cyprus’s main opposition Disy party, will compete against Communist party-backed Stavros Malas after no candidate secured an absolute majority in the Feb. 17 contest.

Candidates:

* Anastasiades, 66, is a lawyer and lawmaker and received 45.5 percent of the vote on Feb. 17. Disy is a member of the European People’s Party as is German Chancellor Angela Merkel’s Christian Democratic Union.

* Malas, 45, was a health minister from Aug. 2011 to Oct. 2012 in the government of current President Demetris Christofias. He is backed by Christofias’s Progressive Party of the Working People. Holder of a degree in genetics from University College London, Malas was a researcher for seven years at the Medical Research Council of Imperial College London. He received 26.9 percent of the vote on Feb. 17.

*The last opinion polls before the Feb. 17 vote indicated Anastasiades would beat Malas in a second round face-off between the two. Publishing of new opinion polls in Cyprus is prohibited from a week before the first round vote.

*Polls close at 6 p.m. local time (4 p.m. in London) and exit polls are scheduled for the same time.

Stance on bailout terms:

*Both presidential candidates support Cyprus’s request to receive international aid after the nation’s banks sought state aid. Banks, such as Bank of Cyprus Plc and Cyprus Popular Bank Pcl (CPB), lost 4.5 billion euros ($6 billion) in Greece’s debt restructuring last year, part of a second international rescue for that country. The amount corresponds to around 25 percent of Cypriot output, while no other European Union member state suffered a loss of even 1 percent, according to Cyprus Finance Minister Vassos Shiarly.

On state asset Sales:

*Current President Christofias’s opposition to selling state-owned and semi-public companies to restore debt sustainability has held up an international rescue for Cyprus. Anastasiades has said state asset sales are something he could agree to only if necessary. Malas opposes privatizations.

On gas:

*Anastasiades and Malas say future state revenue from natural gas deposits should be used for developing the hydrocarbon industry, investing for future generations and repaying Cyprus’s debt, in line with recommendations from euro area ministers and the International Monetary Fund, which will provide Cyprus with an international rescue.

Cyprus facts:

*Cyprus is the third-smallest economy in the euro area.

*The island has been divided since 1974 when Turkey invaded following a coup aimed at joining the nation with Greece.

*It’s still divided today between internationally- recognized Republic Of Cyprus and self-declared Turkish Republic of Northern Cyprus, recognized only by Turkey.

*The United Nations controls the buffer zone between the two parts of island.

*Cyprus joined the EU in 2004 after a UN plan to reunite the island was rejected by a majority of Greek Cypriots in a referendum. EU benefits and obligations are only applied in the Republic of Cyprus.

*Cyprus and Malta adopted the euro in 2008 becoming the 14th and 15th members.

*The government forecasts the economy will contract 3.5 percent this year and 1.3 percent in 2014. The government forecasts unemployment will peak at 14.2 percent next year.

To contact the reporters on this story: Paul Tugwell in Athens at ptugwell1@bloomberg.net; Natalie Weeks in Athens at nweeks2@bloomberg.net

To contact the editor responsible for this story: Jerrold Colten at jcolten@bloomberg.net


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