Cyprus Needs a Bailout for Half Its Economy
The island of Cyprus became the fifth European country to request a bailout for its struggling banks, and the estimated 10 billion euros needed would amount to more than half its total economy.
The little island of Cyprus became the fifth European country to request a bailout for its struggling banking sector, and the estimated 10 billion euros needed to set things right would amount to more than half its total economy. The nation's second-largest bank needs 1.8 billion euros by the end of this week to make up for a shortfall in a country where the entire GDP is only around 17 billion. (That's around 21 billion U.S. dollars.)
Cyrpus is the third-smallest economy in the eurozone, but has been hit hard because it's banking industry is so closely tied to nearby Greece, which has been the continent's problem child for months. Greece continues to have its own issues, of course. European finance leaders are meeting this week to discuss the terms of that country's bailout, even though both the prime minister and finance minster of Greece won't be there because of medical reasons.
The timing of bailout request is especially hurtful for Cyrpus, as the country was set to take over the rotating presidency of the European Union on July 1.