Nicos Anastasiades
Nicos Anastasiades is a Cypriot politician and businessperson, who served as the seventh president of Cyprus from 2013 to 2023. Previously, he was the leader of Democratic Rally between 1997 and 2013 and served as Member of Parliament from Limassol between 1981 and 2013.
Having served in parliament for over three decades, Anastasiades was elected to the presidency in 2013 amid a deep economic crisis. He responded by negotiating a bail-out agreement with the Troika group, consisting of the European Commission, European Central Bank and International Monetary Fund. This required the island to generally cut public spending, though his administration remediated this by attracting significant foreign investment and then increasing the minimum wage, improving the economy. He was re-elected in 2018.
Anastasiades' foreign policy involved the greatest unification talks since 2004, but ultimately failed to reach an agreement. Another considerable legacy of his presidency is his longstanding relationship with Russia, dating back prior to his election due to his law firm that focussed on Russian clientele. Anastasiades signed several agreements to promote closer economic and financial ties with Moscow, turning Cyprus into a vehicle for Russian oligarchs to register their assets there and avoid international sanctions implemented since 2014. Coupled with the controversial investment-for-citizenship program, this created a perception of corruption, something that his supporters have denied, and he reversed his policies drastically following the Russian invasion of Ukraine. He was mentioned in the Panama Papers, Troika Laundromat, and Cyprus Papers leaks.
Early life and education
Nicos Anastasiades was born in the village of Pera Pedi on 27 September 1946 to a Greek Cypriot family. He graduated in law from the National and Kapodistrian University of Athens and completed postgraduate studies in shipping law at the University of London. During his university studies, he was a member of the Centre Coalition based in Athens formed by Georgios Papandreou.Law career
Anastasiades is a lawyer by profession, and the founder of law firm "Nicos Chr. Anastasiades & Partners". The firm provided offshore services and aided in particular Russian clients. Partners in the law firm were officials of shell companies linked to suspected money laundering operations, including for allies of Vladimir Putin. After Anastasiades took office as president, he left the firm in the hands of his two daughters and partners. The law firm has denied any wrongdoing and Anastasiades has said that he has had no active involvement in the firm since 1997.Early political career
Anastasiades was first elected to the House of Representatives in 1981 with the Democratic Rally and remained an MP until 2013, when he resigned in order to assume his duties as President of Cyprus. He was the leader of his party from 1997 to 2013.Presidency
Elections
In March 2012, Nicos Anastasiades was nominated as a candidate for the 2013 presidential election, against his rival MEP Eleni Theocharous in a vote among the 1,008 strong executive of the Democratic Rally. Nicos Anastasiades received 673 votes and Theocharous received 103. In the first round of the presidential election on 17 February 2013, Anastasiades won 45% of votes, while Stavros Malas and George Lillikas earned 26.9% and 24.9%, respectively. He won in the second round against Malas with 57.48% of the vote and was sworn in as president on 28 February 2013.In a repeat of the previous election, he once again beat Malas in 2018.
Economy
Banking bail-out
In 2013, upon assuming office, Anastasiades inherited a critical economic crisis triggered by a combination of factors, including a persistent budget deficit, an outgrown and problematic banking sector representing 750 percent of GDP in 2010, and the fallout from a property boom.Collaborating with the European Union and the International Monetary Fund, Anastasiades finalized a crucial bailout agreement in Brussels to prevent the bankruptcy of Cyprus' main banks and avoid a potential euro exit. The agreement, signed off by the Eurogroup after extensive negotiations, involved significant measures to stabilize the country's financial system.
The deal required Anastasiades to break campaign promises, agreeing to allow banks to confiscate 47.5 percent of bank accounts over 100,000 euros to secure a 10-billion euro bailout from international lenders. Speaking before a committee of inquiry into the island's economic collapse, Anastasiades conceded he reneged on his pledges not to accept a "haircut" on deposits, stressing that the alternative would have been catastrophic for Cyprus.
He later came to comment that Cyprus was treated as a guinea pig with extreme measures never applied before, but despite his counter-proposals they were all blatantly rejected during the Eurogroup meeting. However, such claims were heavily criticized on the press for being misleading, citing references from Eurogroup's members who stated that the bailout plan was actually Anastasiades's proposal. Additional criticism was due to claims that the president himself warned his associates and friends to move money abroad before financial crisis hit.
Despite the heavy criticism, the government's effective management of capital controls revived the country's banking system, and Cyprus was able to exit the bailout in 2016. Annual average real GDP growth from 2018 to 2022 was 4.6%, and the economy rebounded impressively in 2021 with a growth rate of 9.9%. Government achievements include bringing national debt down to 85% of GDP by 2023, and paying off Cyprus' IMF debt ahead of schedule, providing fiscal space for sustainable investments.
Closure of Cyprus Popular Bank
As part of the bailout agreement, Cyprus Popular Bank, the nation's second-largest lender, underwent a swift resolution process. Guaranteed deposits under 100,000 euros were transferred to a "good bank," while non-performing loans and uninsured deposits went to a "bad bank," resulting in losses for bondholders and shareholders totaling 4.2 billion euros. The "good bank" was subsequently merged with Bank of Cyprus, the largest lender, where uninsured deposits faced a haircut to achieve a 9 percent capital ratio. Uninsured depositors, including pension funds, received equity in the recapitalization process. Additionally, the agreement mandated the Bank of Cyprus to absorb the 9 billion euros of Emergency Liquidity Assistance initially provided by the European Central Bank to Laiki Trapeza, with expectations of ongoing liquidity support from the ECB.Laiki Trapeza succumbed to financial woes stemming from significant losses, notably a 1.8 billion euro deficit in the first nine months of 2012 and an additional 4.1 billion euros the year before, fueled by ill-fated investments in Greek bonds and questionable lending decisions. The demise of Laiki Trapeza, a 112-year-old institution, marked a somber chapter in Cyprus's economic history, impacting its banking landscape and the lives of the bank's 8,400 workers.
Closure of Cyprus Airways
On 9 January 2015, Cyprus Airways, the island's flag carrier with 67 years of history, faced a sudden closure following a European Commission ruling that declared the airline's receipt of €100 million in state aid, provided during the Demetris Christofias' government, as illegal. President Nicos Anastasiades played a pivotal role in managing the aftermath, expressing regret over the airline's closure and taking steps to address the concerns of the 560 dismissed employees. He pledged full compensation, acknowledged the government's financial contribution to provident funds, and assured support for the establishment of a new airline.In July 2016, Anastasiades's government announced that Charlie Airlines Ltd, a Cypriot start-up and subsidiary of Russia's S7 airline, emerged as the winning bidder to use the Cyprus Airways brand for ten years. This strategic move aimed to revive the legacy of the historic airline. The agreement signified the government's commitment to economic revitalization, job creation, and enhanced flight connectivity for Cyprus, aligning with the island's recovery efforts.
Today, Cyprus Airways operates flights to 19 key airports, with a program of 58 weekly flights, offering over 342,454 seats. The airline aims to facilitate year-round connectivity, focusing on core markets and serving as a point-to-point carrier, with plans to double its Airbus A220 fleet in early 2024 to support expansion.
Closure of Cyprus Cooperative Bank
Nicos Anastasiades faced criticism over his involvement in the closure of the Cyprus Cooperative Bank. The troubles for CCB began in 2013, when the bank, grappling with a high non-performing loan ratio of 57%, encountered difficulties in recovering funds from its significant portfolio of non-performing loans. Despite a recapitalization effort in 2014 involving €1.5 billion in state funds, followed by an additional injection of €175 million in the subsequent year, the bank remained insolvent and unsustainable. In 2018, the European Central Bank's Single Supervisory Mechanism compelled the winding-up of CCB's operations, leading to the bank's split into 'good' and 'bad' banks. The operating bank network was sold to Hellenic Bank, and non-performing assets were transferred to a new institution, called Kedipes.During the collapse of the CCB, President Nicos Anastasiades and then Finance Minister Harris Georgiades faced scrutiny for their roles. An investigation revealed inadequate communication about a proposed rescue plan, leading to delays and the eventual inability to rescue the bank. Despite a substantial recapitalization, the CCB's failure highlighted challenges stemming from mismanagement and a burden of non-performing loans amounting to €7.5 billion. Blame was primarily directed at Georgiades, who bore the heaviest responsibility, according to a Committee of Inquiry. President Anastasiades faced criticism for retaining Georgiades, impeding decisive action, and the blame-passing narrative extended to Co-op's General Director, Nicholas Hadjiyiannis. The intricate web of political intervention, weak corporate governance, and insufficient measures to reduce non-performing loans contributed to the bank's demise.
Michael Sarris, who served as Cyprus' Finance Minister under Anastasiades' government from March to April 2013, reflected on the closure of the Cyprus Cooperative Bank and identified critical lapses that contributed to the bank's demise. Sarris emphasised the lack of urgency and strategic missteps by the Christofias' government during the 2013 financial crisis. He criticized the delayed agreement with the EU, citing the government's reluctance and underscoring the detrimental impact of a €2.5 billion loan from Russia. Sarris also highlighted the ill-fated decisions of Cypriot banks, particularly their significant exposure to Greek debt. Concerning the CCB, he underscored the romanticized perception of the Cooperative movement and the lack of supervision, deeming it a regrettable historical oversight.