This article is part of our special report European Business Summit.
Conservative leader Nicos Anastasiades easily won the first round in Cyprus's presidential elections but failed to avoid a runoff vote, reflecting deep divisions among Cypriots on a bailout deal to save the island nation from bankruptcy.
A financial crash in Cyprus could reignite the eurozone debt crisis and investors are keen to see Anastasiades, the strongest advocate of an international rescue, clinch victory and secure a bailout, even though that too, has its drawbacks.
Analysts said the 66-year-old lawyer looked likely to win the 24 February run-off, but that the strong combined showing of his two main rivals who campaigned against austerity showed the depths of anti-bailout anger in the nation.
"It is a victory for the forces who want us to turn a page," Anastasiades said after the results were announced.
A lawyer who has led the Democratic Rally party since 1997, he secured a 45.4% share of the vote, well ahead of leftist Stavros Malas who trailed with 26.9%. George Lillikas, an independent, took 24.9% of the vote.
"This result means that Cypriots have not quite decided if Anastasiades is the man to get them out of the crisis. It will be a tough second round," said Fiona Mullen, an economist at the Sapienta consulting firm.
"It makes it a bit tougher for Anastasiades to persuade EU leaders that Cyprus is on the right path, that they will do what it takes to get a bailout."
If successful in the runoff, Anastasiades faces a long list of challenges in convincing European Union and International Monetary Fund lenders to sign off on a rescue before the tiny state faces a €1.4 billion debt repayment in June.
He will have to assuage fears that Cyprus will never be able to pay back its debt, and quell concerns in northern Europe that the island is a hub for laundering money from Russia.
Talks on a rescue, which have dragged on for eight months, have also proven tricky because almost any way of solving the crisis – from restructuring debt to slapping losses on banks – could set a precedent for other troubled states and damage sentiment just as confidence slowly returns to the eurozone.
European Central Bank board member Jörg Asmussen said he hoped a bailout could be struck with the new Cypriot government by the end of March after the elections, the outcome of which he said the ECB was neutral on. It was not clear whether he knew when he was speaking that there would be a second round.