Saxo Bank CEO: Blame The Euro, Not Cyprus
Authored by Lars Seier Christensen, CEO Saxo Bank via his blog,
The real problem is not Cyprus, it is the Euro.
After a few disturbing weeks, I would like to wrap up my comments on Cyprus and, hopefully, turn to other issues going forward. It is astonishing that a EUR 10 billion bailout can keep the world spellbound for so long. But then again, while the amount is not staggering, some of the implications are mind-blowing.
That a small economy can be destroyed over a weekend is in itself very scary. But Cyprus's fate was basically sealed when the Troika revealed its first version of the bailout package. That the final outcome turned out to become even worse should not surprise anyone following the Euro zone's past efforts at saving its project. There is no coherent line, no apparent co-ordination of statements and the grand plans bear the impression of having been scribbled on a napkin long after bedtime. The results are accordingly: poor.
So did Cyprus do terrible things that made it deserve this gruesome fate? Actually not. Cyprus had respectable numbers both for growth, public debt and finances - certainly compared with many other countries in the region. Cyprus succesfully built a strong financial services sector, as the island has little industry or agriculture to live from. Cyprus has a well-functioning, English-speaking workforce and has based itself on British law. So all in all, not a bad place to do business. It made the most of what they had to offer.
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