Share This Article

Facebook LinkedIn
Twitter Reddit
Print Email
Pinterest Gmail
Yahoo
Money Morning
×
  • Invest
    • Best Stocks to Buy
    • Stock Forecasts
    • Stocks to Sell Now
    • Stock Market Predictions
    • Technology Stocks
    • Best REITs to Buy Now
    • IPO Stocks
    • Penny Stocks
    • Dividend Stocks
    • Cryptocurrencies
    • Cannabis Investing
    • Angel Investing
  • Trade
    • How to Trade Options
    • Best Trades to Make Now
    • Options Trading Strategies
    • Weekly Trade Recommendations
  • Retire
    • Income Investing Guide
    • Retirement Articles
  • More
    • Money Morning LIVE
    • Special Investing Reports
    • Our ELetters
    • Our Premium Services
    • Videos
    • Meet Our Experts
    • Profit Academy
Login My Member Benefits Archives Research Your Team About Us FAQ
  • Invest
    • Best Stocks to Buy
    • Stock Forecasts
    • Stocks to Sell Now
    • Stock Market Predictions
    • Technology Stocks
    • Best REITs to Buy Now
    • IPO Stocks
    • Penny Stocks
    • Dividend Stocks
    • Cryptocurrencies
    • Cannabis Investing
    • Angel Investing
    ×
  • Trade
    • How to Trade Options
    • Best Trades to Make Now
    • Options Trading Strategies
    • Weekly Trade Recommendations
    ×
  • Retire
    • Income Investing Guide
    • Retirement Articles
    ×
  • More
    • Money Morning LIVE
    • Special Investing Reports
    • Our ELetters
    • Our Premium Services
    • Videos
    • Meet Our Experts
    • Profit Academy
    ×
  • Subscribe
Enter stock ticker or keyword
×
Join 100,000+ Like-Minded Investors Today
Twitter
Tags: cyprus bailout, cyprus bailout package, euozone bailout package, Euro, euro crisis, euro crisis 2012, euro debt crisis, euro forecast, Europe Debt Crisis, europe debt crisis 2012, European bailouts, Eurozone, eurozone bailouts, eurozone crisis explained, eurozone forecast

Eurozone Debt Crisis: Why Cyprus Needed the Fifth Bailout

By Diane Alter, Contributing Writer, Money Morning • June 26, 2012

Start the conversation

Comment on This Story Click here to cancel reply.

Or to contact Money Morning Customer Service, click here.

Your email address will not be published. Required fields are marked *

Some HTML is OK

U.S. stocks were rattled Monday as two more countries asked for bailout packages in the ongoing Eurozone debt crisis.

Shortly after word came that Spain had formally requested a bailout package for its ailing banks, Cyprus chimed in and also asked for aid.

The Mediterranean country has become the fifth Eurozone nation to hold out its hand for an international rescue. While the smallest of the bunch to seek relief, Cyprus highlights the European Union's increasingly stressed resources as it wrestles with weakening economic conditions.

The aid request followed Fitch's downgrade Monday of the island's stressed banks to "junk" status. The credit cut means the country has lost it investment status with the trio of the largest and most influential rating agencies.

Fitch said in a statement, "Cypriot banks will require substantial injections of capital in order to secure confidence in their financial viability."

Cyprus, saddled with Greek private sector debt, could need as much as 10 billion euros ($12 billion) in bailout funds.

Sign up for SMS so you never miss special events, exclusive offers, and weekly bonus trades.
"Classic contagion, "BBC's chief economics correspondent Hugh Pym said of Cyprus' troubles.

The Latest Eurozone Debt Crisis Bailout

Cyprus is only three days away from its deadline to recapitalize Cyprus Popular Bank, the country's second-largest lender that was largely exposed to Greek debt.

Cyprus had to raise 1.8 billion euros, or 10% of its domestic output, to meet the deadline set by European regulators.

In a statement Monday, the Cyprus government said, "The purpose of the required assistance is to contain the risks to the Cypriot economy, notably those arising from the negative spillover effects through its financial sector, due to its large exposure in the Greek economy."

Cut off from capital markets for more than a year, Cyprus has been knocking on Russia's door for additional support. To date, Russia has lent the financially struggling island, with a population of roughly 1 million, about 2.6 billion euros.

While Britain has mulled helping because of its significant military base on Cyprus, it has axed the idea.

"This is long overdue," Stelios Platis, a well-known Cyprus economist, told the Financial Times. "The delay going to the EFSF (the Eurozone rescue fund) was damaging for Cyprus and the banking sector...We have to contain the spillover effect from Greece."

The fresh requests from Spain and Cyprus will be highlighted at the June 28-29 summit of European finance ministers.

Reports have hinted that the meeting's discussions will include a proposal for a sole European banking supervisor, closer fiscal union among the 17-member nations and a common system for guaranteeing bank deposits.

Investors are skeptical that much will be accomplished at the summit. Trading is expected to be volatile in the days ahead as concerns surround the Eurozone debt crisis and increasing bailouts.

Related Articles and News:

  • Money Morning:
    Why the Spain Bailout Package Won't Work
  • Money Morning:
    Eurozone Debt Crisis Gets More Costly with Spain's Latest Move
  • Financial Times:
    Cyprus requests eurozone bailout
  • BBC Business News:
    Cyprus to ask for bailout from eurozone partners
  • CNN:
    Cyprus request eurozone bailout

Join the conversation. Click here to jump to comments…

Login
guest
guest
0 Comments
Inline Feedbacks
View all comments


Latest News

June 7, 2023 • By Garrett Baldwin

(no title)

June 7, 2023 • By Garrett Baldwin

(no title)

June 7, 2023 • By Garrett Baldwin

A picture containing text, screenshot, font, line Description automatically generated
Postcards: This Value Strategy is Great for Finding Breakouts
Trending Stories
ABOUT MONEY MORNING

Money Morning gives you access to a team of market experts with more than 250 years of combined investing experience – for free. Our experts – who have appeared on FOXBusiness, CNBC, NPR, and BloombergTV – deliver daily investing tips and stock picks, provide analysis with actions to take, and answer your biggest market questions. Our goal is to help our millions of e-newsletter subscribers and Moneymorning.com visitors become smarter, more confident investors.

QUICK LINKS
About Us COVID-19 Announcements How Money Morning Works FAQs Contact Us Search Article Archive Forgot Username/Password Archives Profit Academy Research Your Team Videos Text Messaging Terms of Use
FREE NEWSLETTERS
Total Wealth Research Power Profit Trades Profit Takeover Penny Hawk Trading Today Midday Momentum Pump Up the Close
PREMIUM SERVICES
Money Map Press Home Money Map Report Fast Fortune Club Weekly Cash Clock Night Trader Microcurrency Trader Hyperdrive Portfolio Rocket Wealth Initiative Extreme Profit Hunters Profit Revolution Quantum Data Profits Live Trading Alliance Trade The Close Inside Money Trader Expiration Trader Flashpoint Trader Darknet Hyper Momentum Trader Alpha Accelerators Weekly Profit Cycles Brutus Alerts Resource Traders Alliance

© 2023 Money Morning All Rights Reserved. Protected by copyright of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including the world wide web), of content from this webpage, in whole or in part, is strictly prohibited without the express written permission of Money Morning.

Address: 1125 N Charles St. | Baltimore, MD, 21201 | USA | Phone: 888.384.8339 | Disclaimer | Sitemap | Privacy Policy | Whitelist Us | Do Not Sell or Share My Personal Information

wpDiscuz