Mody, Ashoka, (2013), “Rolling the Dice in Cyprus”,  www.project-syndicate.org, 21 March. The task was never going to be an easy one: impose losses worth about €5.8 billion ($7.5 billion) on lenders to the Cypriot government and depositors with the country’s banks. And now that effort has led Europe to its latest impasse. In marathon negotiations, the Cypriot government, under the supervision of the troika (the European Commission, the European Central …Read More

Aslund, Anders, (2013), “Russia to the Rescue? Why Moscow May Bail out Cyprus”, The Peterson Institute for International Economics, 21 March. Suddenly, Russia has become a central player in the Cypriot financial crisis. On the very evening after the Cypriot parliament rejected a proposed levy on bank deposits that the Cypriot president had previously accepted as a condition for a bailout package of €10 billion, Finance Minister Michael Sarris flew …Read More

Elliott, Douglas, (2013), “Cyprus May Be a Turning Point in the Eurozone Crisis”, Brookings Institute, 20 March. One way or another, the situation is Cyprus likely marks a major turning point in the eurozone crisis. It could be the beginning of true disaster for the zone, eventually leading to a series of sovereign debt defaults and possible exits from the euro area. It could also be the point at which …Read More

Gulati, Mitu, Buchheit, Lee C., (2013), “Walking back from Cyprus”, www.voxeu.org, 20 March. Eurozone leaders’ radical step of putting insured depositors in Cypriot banks in harm’s way was not their only option. This column argues that none of the alternatives were pleasant but some were less ominous.

Annunziata, Marco, (2013), “Cyprus is different”, www.voxeu.org, 20 March. The Cyprus rescue package has elicited sharp reactions. This column argues that a tax on deposits is logical given the limited options, but guaranteed deposits should be spared on fairness and systematic grounds; a 15% tax on big deposits would be enough. Contagion is unlikely since Cyprus is different. Italian and Spanish savers are already alert to surprises such as the …Read More

Eichengreen, Barry, (2013), “Europe’s Lost-and-Found Decade”, www.project-syndicate.org, 19 March. Sentiment in European financial markets has turned. For the moment, the possibility of a Greek exit from the eurozone is off the table. If interest-rate spreads on Spanish and Italian government bonds are any guide, bondholders are no longer betting on a eurozone breakup. European stocks even rose in the week following last month’s inconclusive Italian elections. Investors evidently believe that …Read More