This seems a bit strange to me. It isn’t that important to me, but, it’s curious, and may lead to insights about the Eurozone’s leaders and help us anticipate some of their future actions or inactions.
Cyprus is looking for a bailout, but, some of the EU members are reluctant to do so.
BERLIN (Reuters) – The euro zone is not considering a debt restructuring for Cyprus, the EU’s top economic official was quoted on Friday as saying, as the heavily indebted island struggles to negotiate an international aid deal.
What is ironic, is that much of Cyprus’ problems stem from the Eurozone’s dealings with Greece. Of course, not all, they still had and still have some fundamental problems. Electing a communist probably isn’t the smartest way to deal with them. Still……
Cyprus applied for a financial rescue last June after its banks suffered huge losses on the EU-approved writedown on Greece’s debt.
Cyprus was heavily invested in Greece and its debt.
But “a haircut is not an option for us,” Olli Rehn, the European Economic and Monetary Affairs Commissioner, told the German business daily Handelsblatt in an interview.
Ratings agency Moody’s slashed Cyprus’s credit rating by three notches late on Thursday on an expected rise in its liabilities, adding that it saw a 50 percent probability the Mediterranean island would “default outright or press for a distressed exchange” on its debt.
Are they going to simply let Cyprus go down the drain? I doubt it. They’ll probably give them the $17 billion or so and simply keep Cyprus indebted to the ECB and IMF. And, maybe that’s the plan. But, why let Greece write down it’s debt but not Cyprus? Sure, Cyprus is friendly with Russia, and Russia doesn’t play nice with the Eurozone, but I can’t believe that’s what is behind this reluctance to bail out such a tiny nation when they throw billions of Euro’s around to other much more expensive nations.
Read more here.