Thursday, March 28, 2013
Can Cyprus deal happen elsewhere?-2
I was just reading an article about how the Cypriots are fearful and bitter about their future and blame everybody for this fiasco. But apart from this fears, what kind of message is being sent to depositors everywhere. If anything above the limit of EUR 100,000.00 is not secure, will the people in all the European Union countries spread their money around so be secure in their mind their money is secure below EUR 100,000.00 or will they try to hold on to their money at home or maybe invest somewhere outside their home country. It is really unchartered territory that the European Union is getting into and the effects of it are really in theory and have not been tried out practically. But for the Cypriots, the nightmare has already begun. As I was reading the article, I just kept on opening the eyes as the scenario that is being played out in Cyprus can also happen elsewhere if not contained. Since the banks are closed or whenever they will open, there will definitely be a run on the banks as the foreigners try to take out as much money as they are allowed slowly and surely. The local people and businesses will be left to suffer as the article says that Cyprus does not have any agriculture or manufacturing to rely on to ride it out of this mess. Will the outside world shun the bank products of Cyprus, how will the people react to this mess as the brain drain will accelerate but since the world's economy is already in shambles, where will the Cypriots go? Although you can say that there can be a hope against hope but it is already gone like the depositors money.