Cyprus Modern History

In the Greek-Cypriot part of the population elected Georgios Vassiliu (* 1931; supported by the Progressive Party of the Working People [AKEL]) in 1988, on February 14, 1993 Klerides (DISY) as President of the Republic of Cyprus (re-elected February 15, 1998). The main domestic political problem remained the establishment and shaping of the state unity of Cyprus. In 1990 the Vassiliu government applied for Cyprus to join the European Community. Mediation efforts by the UN and other initiatives to overcome the division of Cyprus failed. On the grounds of compensating for its military inferiority vis-à-vis the Turkish Cypriot side, the Cypriot government decided in January 1997 to purchase Russian S-300 anti-aircraft missiles, which led to new serious tensions with Turkey. After the parliamentary elections at the end of May 2001, the winner, the (euro) communist AKEL, appointed the parliamentary president for the first time. Due to the presidential system (since 1969), Klerides continue government work. In February 2003 Klerides was surprisingly voted out of office; T. Papadopulos (DIKO) became the new president and leader of the Greek Cypriot ethnic group. In the parliamentary elections in May 2006, AKEL and opposition DISY asserted themselves as the strongest parties, despite the loss of votes. Papadopulos’ party DIKO recorded gains. In the presidential elections in February 2008, Papadopulos failed in the first round; AKEL candidate D. Christofias emerged victorious from the runoff elections.

In 2009 the economy was hit hard by the global financial crisis. The budget deficit and unemployment rose. Cyprus’ credit rating was downgraded in 2010 due to the bank exposure to Greek bonds. Parliamentary elections were held on May 22, 2011, in which DISY won 20 seats and became the strongest party ahead of AKEL (19 seats). The previous government coalition of AKEL and DIKO initially remained in place. The explosion of ammunition containers triggered by a fire at a naval base claimed several lives on July 11, 2011 and damaged the important Vassilikos power station. There were bottlenecks in the energy supply, which further exacerbated the already tense economic situation. Rating agencies then downgraded the country’s creditworthiness again. The government resigned on July 28, 2011 against the background of riots and protest demonstrations. president On August 5th, 2011, Christofias appointed a new cabinet made up of AKEL politicians and independents. In December 2011 he tried to avert an impending budget crisis through an austerity program. In order not to have to make use of the euro bailout fund, Christofias signed a contract with Russia on December 23, 2011, which granted Cyprus a loan of € 2.5 billion. Despite this, the economic situation remained critical due to the fragile situation in the banking sector and high unemployment. Therefore, on June 25, 2012, the country applied for EU financial aid. In the runoff election for the presidency on February 24, 2013, N. Anastasiades (DISY) was able to defeat the AKEL candidate Stavros Malas (* 1967) with around 57.5% of the votes. enforce, which received around 42.5% of the vote. The government formed by Anastasiades with the DIKO and the EVROKO began work on March 1, 2013.

On March 16, 2013, according to aceinland, the Eurogroup, the ECB and the IMF agreed with Cyprus on a rescue package of € 10 billion to secure the country’s financial stability. The prerequisite for the implementation of the rescue package was that Cyprus had to provide an additional contribution of around € 7 billion. To finance this contribution, the Cypriot government planned inter alia. an increase in corporate tax and the levying of a stability tax on deposits from domestic and foreign customers of Cypriot banks in the amount of 6.75% on balances up to € 100,000 and 9.9% on balances over € 100,000. The planned stability tax triggered considerable protests from the population. Although small savers with a credit balance of up to € 20,000 were then exempted from the levy, the parliament refused on March 19. 2013 passed the corresponding bill with 36 votes against and 19 abstentions. No parliamentarian approved the plan. After difficult negotiations, the finance ministers of the Eurogroup reached an agreement with the Cypriot government on March 25, 2013 on a modified rescue program amounting to € 10 billion. a. with the aim of reducing the country’s oversized banking sector. It was decided inter alia. the liquidation of the »Laiki Bank« and the restructuring and recapitalization of the »Bank of Cyprus«. The negotiating partners agreed on a security guarantee for credit balances of up to € 100,000 and on the use of higher deposits for the settlement or recapitalization of the two major banks. The Cypriot parliament had already on March 22nd In 2013, with corresponding resolutions, the legal framework for a reorganization of the banking system and for the introduction of capital controls to prevent capital flight was created. Due to differences over the policy towards the Cypriot Turks, the DIKO left the government coalition in February 2014. In the European elections on May 24, 2014, DISY was able to record a clear victory with 37.8% (+ 2.1%) of the votes. AKEL, which in 2009 was almost on a par with DISY, lost 7.9% to only 27%. In June 2014, the country placed government bonds on the capital market for the first time in a year and a half. The capital controls were lifted in April 2015. In November 2015 the parliament passed a law by a majority which created the legal basis for a registered civil partnership for same-sex couples as well. As of March 31, 2016, the country was able to benefit from the rescue package of Waive the European stability mechanism. Parliamentary elections were held on May 22nd, 2016. DISY suffered losses, but with a gain of 30.7% of the votes and 18 seats in parliament, it remained the strongest party ahead of AKEL, which received 25.7% of the votes and 16 seats. The DIKO won 14.5% of the vote and 9 seats in parliament. In the run-off election for the presidency on February 4, 2018, N. Anastasiades was again able to prevail against S. Malas with around 56% of the votes, who received around 44% of the votes.