subject: Will The Little Mediterranean Island Follow In Its Mothers Steps? 26th June, Uk Forex Update [print this page] Vantage FX (http://www.vantagefx.co.uk/) provides a daily overview of the news activity and announcements currently shaping currency movements across the world. Here the company takes a look at news surrounding Eurozone economies on 26th June 2012.
As the fifth country in the European Union seeks a bailout of about 8 billion euros, Europeans are wondering which country is next.
The little island of Cyprus, which only joined the Eurozone in 2004, needs over half the size of its economy to fix its finances. Some say this is because of the recession that occurred in 2008, which has taken down many large and small countries in different places around the world, with Cyprus being one of them. Ratings agencies downgraded Cyprus, the Eurozones third smallest economy, to junk status on Monday, pointing out that the country will need as much as 8 billion to recapitalize its banking sector.
Meanwhile, the Cypriot government hasnt revealed how much Cyprus would ask for, saying the amount is subject to negotiations. The 27 EU leaders are going to discuss it at the meeting in Brussels on Thursday and Friday. On Monday Spain formally asked for financial help of 100 billion to support it troubled banking sector. Cypriot Finance Minister, Vassos Chiarly, said recently he would prefer Eurozone assistance to aid from Russia, which has already given Cyprus a 2.5 billion loan. Cyprus has been excluded from the international capital markets for more than a year, as yields on its 10-year benchmark bond were over 16% on Tuesday.
So where does this leave the little Mediterranean island? Will it be following Greece, its mother country?
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