Europe is tired of Cyprus and Greece

Was it difficult for the powerful European Union to nip in the bud yet another Eurozone crisis which now took place in Cyprus? Experts say that the salvation of the island was a matter of days. After all, the case is about a tiny country with a population of only one million people. And Cyprus share in Eurozone's GDP does not exceed 0.2%. But European officials decided not to hurry.

According to analysts, everyone was caught off guard by the Cyprus crisis. Despite the fact that not so much money was need to overcome this problem, market participants were concerned by the precedent itself. Europeans are tired of having to constantly save small and weak economies, which get into trouble through their own fault.

Cyprus the best way possible falls into this category. Financial and trade ties with other countries within euro-area are negligible. In case of a default, direct consequences for the entire European Union can hardly be expected. But if Europe rushes to rescue Cypriots, other troubled countries will realize that they don't have to worry too much about responsible economic policy.

As is well-known , Cyprus problem began with the disproportionate size of the banking sector growing at the expense of huge contributions from abroad. Major European countries have long been disapproving the existence of offshore zones. Therefore, once Cyprus started having problems, it got faced with the ultimatum, precisely concerning its bank deposits.

According to analysts from TUSAR Forex company, which is a part of international rating of Forex brokers, Trading Academy Masterforex-V, today for the salvation of the island economy 17-billion euros will be enough. Greece, Ireland, Portugal and Spain in their time received much larger amounts. But was the amount allocated to them utilized as efficiently as possible? Doubting that, European officials have almost jeopardized the inviolability of the principles, underlying the stability and viability of the Eurozone.

It seems that the debate on this issue will continue for a long time. After all up untill now, experts have not come to a consensus and have not yet decided who will get the blame for Cyprus crisis as well as for  frankly clumsy first attempts in saving the economy of the island nation.

Source: Cyprus News Magazine