NICOSIA (Reuters) - Cyprus may have to consider an exit from the euro zone if international lenders impose excessively painful austerity measures as a condition for a bailout, the head of its ruling party said on Friday.
Andros Kyprianou, whose AKEL party is the primary backer of the left-wing government led by President Demetris Christofias, told Cypriot online news site 24h.com.cy such a strategy could be considered if austerity becomes unbearable.
"If the troika insists on very painful measures to remain in the euro zone, should we dig our heels in and say we won't leave the euro zone because this is important, and (that) we will remain, however painful the measures may be?" Kyprianou said in a video interview posted on the website.
His party is now trailing in opinion polls behind the right-wing Democratic Rally party.
In a second video clip, asked if his comments clearly implied Cyprus should consider leaving the euro zone, Kyprianou replied: "I am certainly leaving this open. I am not pre-judging what we will do, but what I am saying is these issues must be discussed very seriously if we want to serve the interests of the Cypriot people."
Cyprus became the fifth country in the 17 nation euro zone to seek some form of international aid in June, when its banks needed state help to cover massive losses on their exposures in debt-crippled Greece.
It adopted the euro in 2008, four years after joining the European Union. The island now holds the rotating six-month EU presidency.
Leaked documents show the troika - lenders from the IMF, the European Central Bank and the European Commission - have demanded pay cuts in the public sector, privatizations and pension reforms, though negotiations with Cyprus are inconclusive as Nicosia prepares counter-proposals.
But the troika's suggestions will not go down well with a highly-unionized public sector, particularly ahead of a general election scheduled for February 2013.
Christofias, who once led AKEL, has said he does not intend to seek re-election and the party is backing an independent candidate in the race.
Kyprianou, whose party had tried to shake off perceptions in the past that it was euro skeptic, acknowledged that AKEL had "reservations" about the island joining the bloc.
They were overcome, he said, on the premise that membership would be a catalyst for solving the island's long-running ethnic division, and that it would safeguard interests of "workers."
A solution to Cyprus's division has not transpired yet, he said, and said there were also "negative developments" as far as workers' rights were concerned.
(Reporting by Michele Kambas. Editing by Jane Merriman)
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