Investors aren’t exactly thrilled with the breathtakingly shortsighted “bail-in” Europe has imposed on Cyprus.
This is a rescue in name only. In reality, it will gut the Cypriot economy and set a nasty precedent throughout the rest of the euro zone.
Rather than cough up €5.8 billion ($7.4 billion) to save Cyprus (a measly 0.05% of EU GDP) European leaders prefer to see the Cypriot government confiscate 40% of Cypriot bank deposits over €100,000.
It will drive Cyprus into a depression, much like the “rescues” of Greece, Spain, Ireland and Portugal have done. That’s because the deal utterly destroys the credibility of Cyprus’ banking sector, which makes up 45% of Cypriot GDP and employs 70% of its workers.
— Guru Focus