Cyprus became the latest euro zone domino to teeter in 2012 just when the worst of the crisis appeared to be over. In March 2013, a compromise rescue plan backed by euro zone finance ministers called for Cyprus to wind down one largely state-owned bank, Popular Bank. The raid on Popular Bank was intended to raise most of the 5.8 billion euros that Cyprus was required to raise as part of the bailout.
Cypriots head to polls for new president, euro bailout in the balance
Cypriots began voting on Sunday in a crunch election to choose a new president tasked with sealing a bailout deal to prevent the recession-hit Eurozone member from going bankrupt.
Cyprus desperately needs EU financial aid, but international lenders are awaiting the results of this election before finalising a rescue package.
Without a bailout the east Mediterranean island’s Greek-exposed banks and failing economy would slide into default – risking euro crisis contagion in other member states.
Polls opened at 7am local time (5am GMT) and will close at 6am with a result expected less than three hours later.
Nicos Anastasiades, 66, of the rightwing main opposition Disy party, is tipped to win the first round in which 550,000 Cypriots are eligible to vote, perhaps managing to secure the 50-per cent threshold that would avoid a run-off.
His closest challenger is former health minister Stavros Malas, 45, a British-educated independent backed by the communist AKEL party.
Anastasiades, who has been way ahead in opinion polls, is seen as someone the European Union can do business with, while his stance on ending the division of Cyprus is more flexible than that of his rivals.
The European Commission, European Central Bank and International Monetary Fund are awaiting the election result before offering the terms for a 17 billion (US$23-billion) lifeline.
Malas, who is is confident of seeing off the challenge of 52-year-old former foreign minister George Lillikas and reaching a second round run-off vote next Sunday, argues for “softer” austerity measures.