Little Island, Big Problem

By Hanke, Steve H. | Newsweek, March 22, 2013 | Go to article overview

Little Island, Big Problem


Hanke, Steve H., Newsweek


Byline: Steve H. Hanke

The financial crisis in Cyprus has global ramifications.

Who's going to bail out Cyprus: Brussels or Moscow? That's the multibillion-dollar question. In mid-March, the European Union and the International Monetary Fund proposed a rescue package for the tiny island--to the tune of roughly $20.5 billion. But this bailout proposal was different: $13 billion in aid being offered was conditional upon Cyprus raising the remaining $7.5 billion through a hefty one-time tax on its bank depositors. Not surprisingly, the Cypriots, among others, were not pleased with this idea. And on March 19, to Brussels's surprise, the Cypriot Parliament overwhelmingly rejected the bailout package. Officials are now scrambling to arrive at a solution before March 26, when Cypriot banks are scheduled to reopen.

To some, the Cyprus crisis may seem like much ado about nothing--surely a tiny country of under a million people couldn't possibly destabilize an institution as large and established as the European Union, right?

Wrong. For starters, Cyprus's banking system is actually quite large--more than eight times larger than the Cypriot economy itself. What's more, if Cyprus does end up partially financing a bailout using depositors' money, it would set a dangerous precedent and could shatter confidence in an already-fragile European banking system. And if Cyprus's banks do go bust, it would send shock waves through the markets.

Still, questions linger: why is this crisis happening now? And why did the EU prescribe such a bitter pill for the Cypriot depositors? If we look at who those depositors actually are, a clearer picture begins to emerge. The first thing to note is that European depositors' money began to flow out of Cyprus's banks back in 2010, and by now, most European depositors have already left. …

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

Little Island, Big Problem
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.