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28 March 2013

Crisis In Cyprus Update

In a previous post, Crisis In Cyprus, I mentioned that the Euroroup would take action to try to prevent a run on banks in other troubled Euro countries.
This is a statement from the Eurogroup dated 25 March 13;

"Cyprus is a specific case with exceptional challenges which required the bail-in measures we have agreed upon yesterday.
Macro-economic adjustment programmes are tailor-made to the situation of the country concerned and no models or templates are used."

The statement is carefully worded to characterize the Cypriot plan as "specific". No mention is made that the newly adopted "Bank Resolution Framework." specifies that all future assistance will be under the exact same conditions as the Cypriot plan. For all practical purposes, it isn't a unique case at all.