Cyprus candidates head for presidential poll runoff

The two presidential hopefuls in Cyprus wound up their campaigns with a televised debate on Friday aiming to convince voters they can secure a vital EU bailout to lift the island out of a crippling economic crisis.

A second-round runoff on Sunday being closely watched in European capitals pits rightwing opposition leader Nicos Anastasiades against Stavros Malas, who is backed by the communist party in power during the economic downturn, Akel.

"We have sounded out countries for a short-term bridging loan for public finances to give us breathing space to negotiate a (bailout) memorandum," said frontrunner Anastasiades in the debate.

He agreed with "de-nationalising state companies which have outlived their usefulness" but not "profit-making" utilities.

Malas in contrast said he would accept a lower figure for the bailout but ruled out privatisation.

"If we get money based on the baseline scenario for the banks, there is no need for privatisation," he said.

Anastasiades, 66, favours a swift bailout agreement and says he accepts the harsh measures required to secure it, while Malas has campaigned on a pro-bailout but anti-austerity ticket.

"These are the most crucial elections in our history," Anastasiades told supporters earlier on the last day of campaigning.

Malas, stigmatised by holding a ministerial portfolio in the outgoing administration, told his final rally that the Mediterranean island can face up to its economic problems "by returning to the road of growth".

Anastasiades took 45.46 percent of the vote in a first round on February 17, well ahead of the 26.91 percent polled by Malas, but short of the 50 percent required to secure an outright victory.

The third-placed candidate in the first round, former foreign minister George Lillikas, declined to endorse either candidate this week.

Friday's televised debate in Nicosia came against a backdrop of grim economic news, after the European Commission predicted the Cyprus economy will shrink 3.5 percent in 2013 after a 2.3 percent contraction last year.

"Projections of the economic outlook for 2013 and 2014 point to a prolonged recession, due to further declines in domestic demand and investment activity," it said in its winter report.

It said the economy would continue to shrink until 2016.

The election is seen as one of the most important since independence from Britain in 1960, and unlike previous polls on the normally affluent but divided island it has focused on the economy rather than reunification efforts.

If Anastasiades, who has close relations with Germany's Chancellor Angela Merkel, is elected, "there are chances of a good climate and understanding between Nicosia and Brussels," said political analyst Christopheros Christophorou.

Eurozone finance ministers have deferred a decision on the terms for an estimated 17-billion-euro ($23-billion) bailout package until after the election.

President Demetris Christofias sought a bailout in June and talks dragged on as the outgoing leader resisted EU pressure to privatise profitable state companies, and instead reopened talks with Russia on topping up a 2.5 billion euro loan.

Cyprus's banking system needs up to nine billion euros as part of the EU bailout.

The international community will also expect the next Greek Cypriot leader to pick up the pieces of a deadlocked UN push for reconciling both sides of the island.

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

Turkey says it is seeking a "serious counterpart" to emerge from the vote. "I believe Christofias was a big joke," Turkey's European Union Affairs Minister Egemen Bagis told AFP this week.