Outgoing Cypriot President Demetris Christofias said yesterday he was bowing out with his head held high, blaming profligate banks and a global economic crisis for financial turmoil enveloping the cash-starved island.

Christofias, a communist leader elected in 2008, will not be contesting presidential elections scheduled for this Sunday. Right-wing leader Nicos Anastasiades is expected to win the vote, which could extend to a runoff on February 24.

“The government cannot be blamed for the economic crisis, ignoring a global crisis and the damaging responsibilities of banks and its regulator,” Christofias said in a televised address.

A new government will be in place on March 1.

Once the island’s most popular politician, Christofias saw his popularity slump amid economic recession which has created record-high unemployment and empty coffers, and a deadly munitions accident in 2011 widely put down to state incompetence.

The Mediterranean island, one of the eurozone’s smallest, sought financial aid from its EU partners last year when its major banks booked significant losses on their Greek bond holdings.

EU officials believe a bailout deal could be clinched by the end of March, though discussions are complicated by the fact aid could be disproportionately high compared to economic output of the €18 billion economy.

Cyprus needs to borrow up to €17.5 billion, almost the equivalent of its economic output, to recapitalise its banks and fix its fiscal standing.

Christofias has blamed banks’ greed and regulatory shortcomings for Cyprus’s economic collapse. Opposition parties say his government was too slow to respond to signs of trouble, dragging its feet in seeking, and then negotiating, a bailout deal with lenders.

“I am leaving with my head held high, because I believe that I did whatever I could for Cyprus, and under exceptionally difficult circumstances,” Christofias said.