Saturday, 23 March 2013

something for a friday #7 - Cyprus bailout

Im biased, but I really do like the way the BBC report on stories. I mean, they tackle all angles; from the factual side, to opinion pieces and they take the time to breakdown the situation. 

The BBC is probably the only reason I understand what is actually going on in Cyprus. 

To summarise, no one knows what is going on. No one knows what is going to happen. And I am not sure if the governments "plan b" will actually come to fruition. It's nearly midnight on Friday night and we still have no news about the proposed package, which the government will present to Troika. And you better keep your fingers crossed that they have something good up their sleeves and Troika does agree to it, because come Monday, if there is no "plan b" in place, the European Central Bank will most probably cut Cyprus' emergency funding. 


By cutting the ties, Cyprus' banks will not reopen and the Cyprus government will be bankrupt. If that happens, the options for Cyprus are limited but would probably involve an exit from the EU, so Cyprus could start printing it's own currency and try and salvage it's economy. This is the worst case scenario.

The best case scenario (in my humble expat opinion) is that the government comes together to agree on a solution for the island as a whole; the bank levy should have been accepted in the first place because in situations like these (and let's face it the crisis in Cyprus is about as serious as it gets) everyone has to pay a price. Indeed it's painful and unfair, but thats the reality of the recession.

Neither has the situation here magically appeared overnight and I actually feel quite sorry for the newly elected president who has inherited this mess. But now is the time for solutions not the blame game.

In a country with a ridiculous amount of government workers, over privaledge bank employees and low personal income tax threshold, I totally believe there is a solution out there. It's just whether everyone can overcome the pain and realise that for the greater good and for the future of Cyprus for that matter, everyone, and I include myself in this, has to contribute.

My opinions are completely my own and come easily as I stand on the expat outskirts of this situation, looking in. But if you want a more proficient explanation of the scenarios that could lie ahead for Cyprus, I suggest this article from the BBC.

1 comment:

  1. An outstanding share! I've just forwarded this onto a friend who has been doing a little homework on this. And he actually bought me breakfast due to the fact that I stumbled upon it for him... lol. So let me reword this.... Thanks for the meal!! But yeah, thanks for spending time to discuss this issue here on your blog.

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