Cyprus may seem too small for markets to care. But UBS has warned
that the Mediterranean island is big enough to cause trouble in the euro
zone after seeking a bailout from the troika, made up of the
International Monetary Fund, the European Commission and the European
Central Bank.
After all, this is not the first time a relatively small economy has threatened to trigger a pan-European domino effect ranging from Ireland, to Greece and Portugal.
'The Cypriot case has all the ingredients to raise questions about the consistency of the euro project again, comparable to -albeit possibly less dangerous than - the Grexit hysteria less than a year ago,' said economist Martin Lueck from UBS...
...So far, it seems that the Troika bailout won't come easily as European authorities have already voiced their concerns over money laundering and tax evasion in the island. European Commissioner for Economic and Monetary Affairs Olli Rehn told the Cypriot authorities that it must take a strong stance against money laundering if it wants aid. Cyprus has denied the allegations and seems reluctant to accept the conditionality attached to the bailout package.
Cyprus' banking secrecy makes her a target of her high-tax neighbors. Good luck.
After all, this is not the first time a relatively small economy has threatened to trigger a pan-European domino effect ranging from Ireland, to Greece and Portugal.
'The Cypriot case has all the ingredients to raise questions about the consistency of the euro project again, comparable to -albeit possibly less dangerous than - the Grexit hysteria less than a year ago,' said economist Martin Lueck from UBS...
...So far, it seems that the Troika bailout won't come easily as European authorities have already voiced their concerns over money laundering and tax evasion in the island. European Commissioner for Economic and Monetary Affairs Olli Rehn told the Cypriot authorities that it must take a strong stance against money laundering if it wants aid. Cyprus has denied the allegations and seems reluctant to accept the conditionality attached to the bailout package.
Cyprus' banking secrecy makes her a target of her high-tax neighbors. Good luck.
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