Cyprus gets $13 billion bailout, must crack down on banking
CNN NewsBy Ben Brumfield
March 16, 2013
http://edition.cnn.com/2013/03/16/world/europe/cyrus-big-bailout/index.html?iref=storysearch
Summary:
Eurozone finance ministers Saturday granted a $13 billion bailout package to Cyprus as it struggles with a bloated financial sector that is threatening the region's economy. It reckoned at €17 billion and seemed likely to impose an undue burden on Cyprus. Official loans on that scale would amount to 95% of Cypriot GDP. The Mediterranean island's banking system has become "fragile" and must be downsized. The Eurogroup said in a statement announcing the 10 billion euro bailout.Opinion:
I was very shocked that the official loans is very large size that is even relative to the country's GDP. I cannot imagine how enormous amount that is. In practice the main answer will be to support Cyprus's pension funds and domestic banks into financing the government bonds.
I don't think a loan 95% of the nation's GDP wouldn't really help the nation in the long terms. Of course, Cyprus will be able to escape the current situation, but they are going to have a very difficult time getting out of dept.
ReplyDeleteI hope Cyprus not to face the similar situation as Greece did... I admire South Korea in that Korea successfully coped with economic crisis happened in 1997 lol. Anyway, no more economic clashes plz!
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