Cyprus and the Financial Crisis : The Controversial Bailout and What It Means for the Eurozone

The 2012-2013 Economic Crisis In The Republic Of Cyprus Is Commonly Attributed To A Number Of Factors, Including The Exposure Of Cypriot Banks To Over Leveraged Local Property Companies; The Knock-on Effect Of The Greek Government Debt Crisis; And International Credit Rating Agencies Downgrading The Cypriot Government's Bond Credit Status. What Followed Was Unexpected And Controversial: A Bailout On Condition Of A One-time Bank Deposit Levy On All Uninsured Deposits In The Country's Second-largest Bank, The Cyprus Popular Bank; And On The Uninsured Deposits Of Large Proportion Of The Island's Largest Commercial Bank, The Bank Of Cyprus. Many Have Questioned The Implications Of Cyprus' Ties With The Russian Financial System, As Well As The Draconian And Unprecedented Bailout Terms Imposed On The Cypriot Population By The Eurozone. There Has Been Little Written From The Cypriot Perspective On These Events. This Book Presents A Study Of The Events Surrounding The Recent Cypriot Financial Crisis And Its Impact On The Eurozone. It Incorporates Insights From Leading Protagonists In The Cypriot Government And Banking Sectors And Focuses On Qualitative Research To Assess The Events That Formed The Backdrop Of The Crisis. The Book Analyzes The Policies Of Many Public And Private Institutions And Presents The Crisis Alongside Other Eurozone Bailouts To Compare And Contextualize The Ongoing Issues. Cyprus And The Financial Crisis Also Explains The Political And Historical Backdrop Of The Events, Including The Wider Cypriot Experience Since The 1974 Invasion, And The Unravelling Financial Relationship Between Cyprus, Greece And Russia. It Incorporates The Views Of Cypriots From A Wide And Diverse Spectrum, And Presents The Resilience Of The Island In Fighting Back To Beat Forecasts For Recovery, Helped By The Eldorado Of Gas Finds Off Its Southern Shores. -- Introduction -- 1. Birth Of A Nation. The Road To Independence ; Nationhood, Its Costs And Consequences ; A Unified Country Breaks Down, 1963-64 -- 2. Forever Divided?. The Turkish Invasion And Its Aftermath ; A Final Hope? The Annan Plan, 2002-2004 -- 3. The Financial Crisis Spreads To Cyprus. The Single Currency And International Finance ; Akel: An Easy Target For Blame? ; Greece, The Psi, And Sacrifice Of Cyprus ; Greek Fallout In Cyprus ; Casino Economics And Political Games ; From Bailouts To Bail-in -- 4. Bailouts And Bail-ins. The Cyprus Experiment ; International Reactions To The Bail-in ; The Piraeus Asset Transfer ; Austerity, Banking And Housing Bubble Parallels ; Cyprus And The Politicised 'russian' Connection -- 5. The Cypriot Recovery And Strategic Challenges. Banking Confidence And The Eurozone ; The Rapid Recovery Of Cyprus ; Natural Gas And The Strategic Conflict With Turkey -- 6. Bail-in And The Future Of The Eurozone -- A Dream Undone? ; Monetary Union: Stability Or Systemic Weakness? -- Conclusion -- Bibliography. John Theodore And Jonathan Theodore. Includes Bibliographical References And Index. This book presents a study of the events surrounding the recent Cypriot Financial Crisis and its impact on the Eurozone. The 2012-2013 economic crisis in the Republic of Cyprus is commonly attributed to a number of factors, including the exposure of Cypriot banks to over leveraged local property companies; the knock-on effect of the Greek government debt crisis; and international credit rating agencies downgrading the Cypriot government's bond credit status. What followed was unexpected and controversial: a bailout on condition of a one-time bank deposit levy on all uninsured deposits in the country's second-largest bank, the Cyprus Popular Bank; and on the uninsured deposits of large proportion of the island's largest commercial bank, the Bank of Cyprus. Many have questioned the implications of Cyprus' ties with the Russian financial system, as well as the draconian and unprecedented bailout terms imposed on the Cypriot population by the Eurozone. There has been little written from the Cypriot perspective on these events. This book presents a study of the events surrounding the recent Cypriot Financial Crisis and its impact on the Eurozone. It incorporates insights from leading protagonists in the Cypriot government and banking sectors and focuses on qualitative research to assess the events that formed the backdrop of the crisis. The book analyzes the policies of many public and private institutions and presents the crisis alongside other Eurozone bailouts to compare and contextualize the ongoing issues. Cyprus and the Financial Crisis also explains the political and historical backdrop of the events, including the wider Cypriot experience since the 1974 invasion, and the unravelling financial relationship between Cyprus, Greece and Russia. It incorporates the views of Cypriots from a wide and diverse spectrum, and presents the resilience of the island in fighting back to beat forecasts for recovery, helped by the Eldorado of gas finds off its southern shores Front Matter....Pages i-xvi Introduction....Pages 1-5 Birth of a Nation....Pages 6-18 Forever Divided?....Pages 19-37 The Financial Crisis Spreads to Cyprus....Pages 38-70 Bailouts and Bail-Ins....Pages 71-101 Economic Recovery and Strategic Challenges....Pages 102-122 Bail-In and the Future of the Eurozone....Pages 123-137 Conclusion....Pages 138-144 Back Matter....Pages 145-179