This article talks about Cyprus banks which are expected to be shut until the 25th March to prevent mass withdrawals and to prevent any money from leaving from the country. While the ATM machines are still giving out cash with limits and some are running low on cash. Business are refusing to take payments from Credit cards because they don't know when the banks would open. The German fiance minister said that if they don't come up with a solution quick the banks might never open.The country could be on its way to bankruptcy and could face a possible exit from the Euro Zone.
This decision came an emergency cabinet meeting that was called on Tuesday, rejected the EU-IMF deal, with 36 MPs voting against it and 19 abstaining and not a single in favor of it .The President is expected to come up with another plan on Thursday to figure out a way to fund the country's bailout. There are many options which are being considered like Bank mergers, a bond issue. The Cypriot Fiance minister is in Moscow to negotiate assistance from Russia but nothing concrete has come up so far. The Russians hold billion dollar investments in Cyprus which also includes large deposits. All this money has been attracted into Cyprus because of its lower taxes.
http://www.bbc.co.uk/news/world-europe-21870801
This decision came an emergency cabinet meeting that was called on Tuesday, rejected the EU-IMF deal, with 36 MPs voting against it and 19 abstaining and not a single in favor of it .The President is expected to come up with another plan on Thursday to figure out a way to fund the country's bailout. There are many options which are being considered like Bank mergers, a bond issue. The Cypriot Fiance minister is in Moscow to negotiate assistance from Russia but nothing concrete has come up so far. The Russians hold billion dollar investments in Cyprus which also includes large deposits. All this money has been attracted into Cyprus because of its lower taxes.
http://www.bbc.co.uk/news/world-europe-21870801
The issue in Cyprus really drives home that the Eurozone is still not out of troubled waters. While the economy has certainly been functioning better, this is something of an ill omen. The crisis is beginning to closely resemble that of Greece and Spain but isn't quite as bad in magnitude yet.
ReplyDeleteHopefully, another solution can be arrived at now that Cyprus has rejected the initial proposal in parliament. Ideally, this situation can be rectified before bailout measures have to be made more drastic.