Runoff Is Set for President in Cyprus

http://www.nytimes.com/2013/02/18/world/europe/cyprus-sets-runoff-for-president.html

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NICOSIA, Cyprus (AP) — Cyprus will hold a presidential runoff election next week after no candidate won an outright majority in the first round of voting on Sunday.

The front-runner, Nicos Anastasiades, the leader of a center-right party who presented himself as the most capable candidate to negotiate a bailout as Cyprus navigates a severe financial crisis, won the first round with just over 45 percent of the vote.

He will face Stavros Malas, who has advocated for a more assertive stance to win better terms for the loans Cyprus needs, next Sunday. Mr. Malas won 26.91 percent of the vote. An independent candidate, Giorgos Lallikas, was a close third with 24.93 percent, although he was eliminated from the race.

The change in leadership — President Dimitris Christofias said he would not seek re-election — comes at a crucial juncture for Cyprus. Other countries that use the euro are expected to decide next month on a financial lifeline for Cyprus, which is quickly running out of cash to pay its bills.

Cyprus got into trouble after its banks suffered huge losses in the restructuring of Greece’s debt. Cyprus, with a shrinking economy and jobless rate at almost 15 percent, has already reached a preliminary bailout agreement and has enacted a raft of spending cuts and tax increases.

But Cyprus’s request for help is meeting resistance from some quarters, especially Germany, which says that the country’s banks serves as money-laundering hubs for Russian oligarchs. Cyprus is also said to be too small to matter since it contributes about 0.15 percent to the economy among the countries that use the euro.

The size of the bailout, estimated to be up to $22.65 billion, is tiny compared with the hundreds of billions provided as loans to other troubled European countries like Greece, Ireland and Portugal. But it is equivalent to the entire economic output of Cyprus, putting into question whether the country would ever be able to pay it back.

“Cyprus needs an adjustment program, a comprehensive one,” Joerg Asmussen, a member of the European Central Bank’s executive board, told Germany’s ARD television on Sunday.