Cyprus bailout? It's insane

March 2013
Daily Mail;3/23/2013, p25
THE EU decision, at a meeting chaired by Michael Noonan, to appropriate Cyprus bank deposits to fund that country's bailout is insane. In order to save €7billion in bailout costs, the EU has unsettled depositors across peripheral Europe from Cyprus to Spain. The cost of the resulting bank destabilisation will probably be many multiples of the €7billion 'saved'. The other problem with this decision is that it probably dooms the rescue of Cypriot banks. Once bitten, Russian depositors are likely to prove twice shy. The flight of Russian depositors - who currently provide around 25 per cent of the funding of Cyprus's banks - would fatally undermine the rescue plan for Cyprus.


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