In this video talk by The Economist, a correspondent explains the deal to bail out Cyprus's economy. He outlines the restructuring that will occur in the banking sector, in which many uninsured large deposits will be lost. This will have a strong effect on businesses, who now do not know how much money they still have in the bank. Depositors in the eurozone as a whole will likely respond strongly because of these loses and uncertainty. Questions are raised about the idea of the euro, because with the instability of the economies of some countries means that a euro in countries such as Cyprus are not worth the same as a euro in places like Germany. It will be interesting to see how another bailout affects the reactions of eurozone countries that are bailing out countries, and how they will vote to change the economic rules and regulations of the region.
http://www.economist.com/multimedia?bclid=1242934274001&bctid=2252701826001
1 comment:
I read an article about this as well that argued that the Eurozone Crisis has been the push European nations needed to reconstruct their banking sector and monetary policy. Sounds like they're headed in the right direction by simply discussing with one another and making decisions about bail outs.
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