Cyprus Bailout | South’s Debt Rises to €23bn

Cyprus Bailout | South’s Debt Rises to €23bn

Originally the south stated that they needed €17.5bn to help them out until better times, just around the gas-laden corner, arrive again. This means that instead of having to raise €7.5bn to add to the troika’s €10bn loan, the south now needs to find €13bn. It is doubtful that the south can raise this money and it isn’t even certain that this recent sum is the final figure. Future business and personal bankruptcies, for example, haven’t been considered yet.

The south are scraping around for every bit of money they can lay their hands on and that’s why the rumour that they were selling €400m worth of their gold reserves came from. There is even re-emerging rumours that sequestering pension funds are being considered. Perhaps they’ll even be using the money set aside for Turkish Cypriot property in event of a settlement of the Cyprus Problem?

It is thought that so far only €10.6bn has been secured and that the €2.4bn shortfall is proving difficult to overcome. Add to this shortfall an expected contraction of up to 20% of the south’s economy and you can see that the prospect of them leaving the Eurozone, and printing money, seems more likely than before.

Despite what idealists might want you to believe, leaving the Eurozone, rather than being a solution, is just a whole different set of problems which the south would have to solve with few places to turn to. Of course, mother Russia will always be there waiting for the next communist government to call on them and, if the current government makes a mess of things, this may be sooner than expected.

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