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View Diary: Cyprus: Trial Balloon of the Plutocracy (47 comments)

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  •  Short answer yes, long answer below (1+ / 0-)
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    So what went wrong?

    During the good years Cyprus did build up what the IMF calls "vulnerabilities". There was rapid growth in credit, the banks made many loans to Greece and there was a property market boom.
    The banks are central to this story. They grew rapidly. By 2011, the IMF reported that their assets - which include all the loans they have made - were equivalent to 835% of annual national income, or GDP. A chunk of that is down to foreign-owned banks, but those that are Cypriot had made loans to Greek borrowers worth 160% of Cypriot GDP. There have been losses on the loans to private borrowers because of the depression that has hit the Greek economy. And the value of the debts owed by the Greek government was cut in a debt relief exercise undertaken last year. It might have helped Greece, but the Cypriot banks were hit.

    "Another world is not only possible, she is on her way. On a quiet day, I can hear her breathing." Arundhati Roy

    by LaFeminista on Tue Mar 19, 2013 at 10:26:45 AM PDT

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