Cyprus Re-Elects President as Nation Returns to Economic Growth

(Bloomberg) -- Nicos Anastasiades was re-elected as Cyprus president, winning his bid to continue overseeing the Mediterranean island’s economic recovery nearly six years after the country came close to financial collapse.

Anastasiades, 71, the candidate of the center-right Disy party, won 56 percent of the vote, compared with 44 percent for Stavros Malas, an independent candidate backed by the leftist Akel party, according to Cypriot Interior Ministry figures. A first-round vote on Jan. 28 had failed to deliver a victory to Anastasiades who also won against Malas in the 2013 presidential election.

“Anastasiades’ key selling point was that he and his team had turned around the economy after a severe crisis,” said Fiona Mullen, director of Nicosia-based Sapienta Economics. “While there are doubts about Anastasiades’ ability to solve the Cyprus problem, ultimately people voted with their pockets.”

Cyprus dodged a disorderly sovereign default and exit from the euro area in early 2013, roughly a month after Anastasiades was first elected. The nation, the fifth euro-area member to request international aid in 2012, agreed at that time to demands from creditors to shrink its banking system in exchange for 10 billion euros ($12.5 billion) of aid.

Bailout program

The country, which had needed a bailout to recapitalize its lenders as well as to finance the government, returned to growth in 2015, allowing it to exit the aid program in early 2016 after using just 7.3 billion euros of the total loan. Cyprus’ economy expanded by 3.7 percent in 2017 and will grow by 2.9 percent in 2018, according to a survey of nine economists by Bloomberg.

Centrist Diko party leader Nikolas Papadopoulos was knocked out in the first round, after coming third with less then 26 percent. Around 74 percent of registered voters cast a ballot compared with almost 81 percent in the 2013 election.

“Malas could not shake off the fact that he was Akel’s candidate and that Akel presided over the big build-up to the crisis,” Mullen said. “The fact that Diko, the usual kingmaker, did not support either candidate also helped Anastasiades, as Diko voters are closer politically to his Disy party than to Akel,” she said.

Cyprus’s economy was the main issue for voters rather than reunification. Cyprus has been divided since 1974, when Turkey invaded the northern third of the island following a coup by supporters of the country’s union with Greece.

Reunification wasn’t top of the agenda because people have tired of the issue and don’t expect an agreement in the near future, according to Harris Papageorgiou, manager of Nicosia-based Noverna Analytics & Research.

To contact the reporters on this story: Paul Tugwell in Athens at ptugwell1@bloomberg.net, Georgios Georgiou in Nicosia at ggeorgiou5@bloomberg.net.

To contact the editors responsible for this story: Jerrold Colten at jcolten@bloomberg.net, Sotiris Nikas at snikas@bloomberg.net, Rachel Graham, Chris Vellacott

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