Posts Tagged ‘Cyprus’
Souring Cyprus
The recent $13 billion bailout (60% of GDP) made by the IMF, ECB, and European Commission to Cyprus does not solve problems, it just delays them. With a post bailout debt-to-GDP burden of 140%, an economy that will shrink 20% over the next two years, the gutting of its huge financial sector, and a promise…
Read MoreCashless Cyprus
While small, the Cypriot bank bailout is causing heartburn across the Eurozone. At its peak, the banking sector had assets eight times GDP and now needs $13 billion. If Cyprus borrows the money, their debt-to-GDP ratio becomes unsustainable. Writing down sovereign debt won’t work because it’s held by the banks and forcing a haircut on…
Read More