Friday 19 January 2018

A tiny nation is saved but fallout could be massive

One tiny country on the fringe of Europe has been saved from immediate ruin. Summed up in this manner, the rescue of Cyprus might seem a very small event, hardly worth the enormous efforts devoted to the subject by European and international leaders.

And in its aftermath, it aroused remarkably little controversy or even criticism.

The political leaders, the financial markets and the general public all agreed on one point. Cyprus had got a bad deal from the EU, the ECB and the IMF. It would ensure a prolonged and painful recession. But the alternative was worse: the collapse of the banking system, probably a forced withdrawal from the eurozone and a return to printing its own money.

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