Cyprus has been downgraded by Moody’s to junk status, as of Friday last week, and is now expected to be the fifth Eurozone country to request a formal bailout. An independent audit has said that because of their exposure to Greek debt they may need €4bn to shore up its banks, or a quarter of their GDP. With a population of a million people and its direct tight relationship with Greece it hasn’t come as much of a surprise to many analysts who have been mooting this may happen for the last few months. The Cypriots themselves have already borrowed from another close trading partner in Russia, and may turn to them again before going cap in hand to its other Eurozone members.
As a country requests a bailout it is also admitting it cannot afford to contribute to further bailouts by other countries in need, so this leaves 12 countries to help bailout anyone else that may need help (Spain), so eventually will it just be Germany left to bail out well …. Germany?