Economy, not North, dominates Cyprus vote

Cypriots vote in a presidential election Sunday more worried about securing an international bailout for the crisis-hit economy than choosing a leader to bridge the island's decades-old divide.

The vote marks the first time since independence in 1960 that progress on reunification with the island's Turkish-occupied northern third has been forced to take a back seat.

"The economic crisis has dominated the debate and the Cyprus problem is second by a long distance," political analyst Hubert Faustmann told AFP.

"Whoever comes in as president will have to sign the bailout or face state bankruptcy. These are the only two options. There is no third option," said Faustmann, associate professor of history and politics and Nicosia University.

Nicos Anastasiades, 66-year-old leader of the largest opposition party, the rightwing Disy, is the hot favourite to win in Sunday's first round when just over half-a-million Cypriots go to the polls.

Anastasiades, who takes a 15 percent opinion poll lead into the final days of the campaign, is seen as a man Brussels can do business with while his position on the Cyprus issue is more flexible than his rivals.

Anastasiades supported a failed "Yes" vote for a United Nations reunification blueprint in 2004, even though it was rejected by Greek Cypriots, resulting in a divided island joining the EU.

Now, the eurozone is getting ready to throw the country a 17 billion euro ($23 billion) lifeline as once-wealthy Cypriots have been forced to come to terms with austerity and soaring unemployment, running at over 14 percent.

Cyprus will first have to overcome deep misgivings about money-laundering amid fears over Russian criminal elements using the banking system. Many Russian banks and businessmen keep funds in Cyprus.

Nicosia requested a bailout in June when its two largest Greek-exposed banks asked for assistance after failing to meet EU capital buffer criteria.

Bailout negotiations dragged on while outgoing President Demetris Christofias resisted austerity measures that would include privatisation, and reopened talks with Russia on topping up a 2.5 billion euro loan.

Christofias is the only Cypriot president not to run for re-election, citing a lack of progress on the Cyprus problem during his five-year term.

UN-backed reconciliation talks ground to halt in 2012, deadlocked over power sharing, property rights and territorial adjustments.

But it has been the economics of recession -- unprecedented unemployment, austerity, a liquidity crunch and a property slump -- that has swamped the domestic agenda.

Anastasiades' closest challenger is former health minister Stavros Malas, 45, a candidate who has the support of the ruling communist AKEL party.

Malas is confident of seeing off the challenge of former foreign minister George Lillikas, 52, and reaching a second round runoff the following Sunday. The other nine candidates have no chance of causing a shock.

Independent Lillikas is along among the three main candidates to oppose a bailout deal, saying it would plunge the tourist destination into deeper recession.

He wants to use the island's huge offshore natural gas reserves to kick-start the economy, despite assertions it will take five years to come onstream.

Political commentator Sofronis Sofroniou believes Anastasiades will come out on top because Cypriots are demanding change after five years of AKEL rule destroyed the economy.

"There is a feeling that with a different economic approach things will change and a recovery can happen," he told AFP.

The Mediterranean island has been divided since 1974 when Turkish troops invaded and seized its northern third in response to an Athens-inspired coup aimed at uniting Greece and Cyprus.