Sunday, 24 March 2013

09:00 – The patience of Germany for continuous bailouts of other eurozone countries has now obviously been completely exhausted. At this point, Germany obviously doesn’t care whether Cyprus meets its terms for a bailout, believing that the “contagion” can be contained. They’re wrong, but that’s what they believe. For Cyprus, the point is moot anyway. Either way, Cyprus has been written off. Its economy is based on off-shore banking, and that no longer exists whether or not Cyprus is bailed out. To Cypriots, it must seem as though this catastrophe has occurred overnight, but there’s no question that Cyprus has now become the new Greece, with all that implies. And Cypriots are pissed, feeling abandoned and betrayed by the rest of the eurozone, particularly Germany. They’re screwed either way, and my guess is that this week they’ll tell the EU to get screwed. That means Cyprus defaults, crashes out of the euro, and returns to its local currency, but at this point I think most Cypriots no longer care.