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Little time to celebrate as tough decisions must be made
PRESIDENT-ELECT Nicos Anastasiades must navigate a minefield on taking office, juggling Cypriot and foreign interests against a backdrop of an urgently needed bailout.
The 66-year-old veteran politician, who cruised to victory in yesterday’s run-off vote, has often cited his good standing among EU leaders, particularly the European People’s Party.
But now that words must turn into action, his relations with foreign leaders will be put to the test, says economic analyst Stelios Platis.
The new president will have to deal with international creditors who have been making noises over alleged money-laundering and Cyprus’ low corporate tax rate.
But equally pressing are the tough negotiations ahead to determine the precise amount that local banks need to recapitalise, which will heavily impact the final bailout figure for the indebted island.
There is a risk that the bailout number will render the national debt unsustainable, leading lenders to shut the door to financial assistance.
Anastasiades will also have to deal with European paymaster Germany; Chancellor Angela Merkel faces her own elections in September, and is under pressure to ensure that German taxpayers do not foot the bill unless Cyprus can push through reforms and pay back the loan.
“What Cyprus must do is show Europe that it is in their interests to support Cyprus in her troubles,” says Platis.
What Anastasiades has going for him, however, is his pragmatic approach. He won’t waste time on inconsequential discussions if he finds he cannot convince foreigners on this or that point, the analyst added.
Moreover, the new administration is far less likely to unsettle foreign leaders by sending out mixed signals, as happened during the Christofias administration, “when the president said one thing, and his finance minister another.”
Platis is nevertheless wary of Anastasiades’ recent revelation that he will seek a bridging loan from another country as a quick fix, allowing Cyprus to stay afloat until such time as signatures are put on an EU/IMF bailout agreement.
Any such loan should not be bilateral, but rather be sought from the troika and the EU, Platis said.
Some postulate that the mere election of a new government should end uncertainty over the island’s sliding economy and calm investors’ nerves.
But political commentator Louis Igoumenides is not all that convinced.
“The uncertainty will end only once the memorandum of understanding is signed,” he told the Mail.
Still, Igoumenides shares the view that Cyprus’ prospects look better with Anastasiades in charge rather than Malas, who inevitably would be associated with the outgoing AKEL government.
“It’s true, foreigners are more positively disposed toward Anastasiades. But it’s the nitty-gritty that counts.”