Cyprus Problem | South Could Exit Eurozone Without Bailout
Olli Rehn, the European Economic Affairs Commissioner, has warned that Cyprus could exit the eurozone without a bailout. He made this statement to a German daily. “If Cyprus becomes disorderly insolvent, it is very likely that would lead to it exiting the euro zone,” Olli Rehn said.
The main sticking point seems to be that both the EU and IMF want guarantees that the Greek Cypriot government are able to pay the debt which could take at least 40 years to repay. Lessons should be learnt from the bailout of Greece which began in 2010 and had to be restructured in 2012.
The south wants a 17bn euro ($22.3bn) loan from the EU and the International Monetary Fund, which is equal to the size of its economy.
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