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Next Up For Cyprus: Depression

Next Up For Cyprus: Depression thumbnail

From SocGen:

Depression for Cyprus: Our Cypriot GDP forecast entails a drop of just over 20% in real GDP by 2017. This forecast had already factored in much what was agreed, but did not account for the additional uncertainty shock generated by the past week’s appalling political mess. Risks are clearly on the downside and Cyprus will in all likelihood require additional financial assistance further down the road. Accounting for less than 0.3% of euro area GDP, any downward revision to Cyprus will be barely visible on the euro area aggregate.

So much for the hope of recreating Iceland, and actually growing in 2-3 years. Congratulations Cyprus – you may have a depression for the next four years, but at least you have the (and helped Merkel win the September election).


3 Comments on "Next Up For Cyprus: Depression"

  1. BillT on Tue, 26th Mar 2013 2:17 am 

    This is only a quick stop on the train ride to depression for all of the world. Be patient. Next stop Spain?

  2. Arthur on Tue, 26th Mar 2013 8:39 am 

    I am not so sure Bill. Both Greece and Cyprus have some impressive assets in their sleeves:

    The EU finally did the right thing, namely not to bail out a junk bank organization. Message to European bank client: you enter a bank on your own risk. This will contribute to ending an era of reckless risks and burning money. The Financial Times, premier mouthpiece of the global banking mafia, called for the resignation of the people behind the measure, a sure sign the socalled euro group did the right thing, now that banks can go broke.

  3. BillT on Tue, 26th Mar 2013 11:21 am 

    I suspect that the Russians already have their eyes on the Cypriot oil/gas assets. But then, most of their money was siphoned out of Cyprus banks through the three branches conveniently outside of Cyprus that remained open for business during the chaos. When the dust settles, there will be little to no Russian money in the two banks to take.

    Russian Mafia are not fools. The people who manage their money are not fools either. They know they might just ‘disappear’ if too much money ‘disappears’ into the ECB black hole so I am sure they made sure that that didn’t happen. I.E., the branches that conveniently remained open for business. I am sure that wealthy Cypriots and others used that same opportunity if they were able.

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