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Cyprus requests EU bailout as Greek losses take their toll

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Considering the close relationship with the Greek economy, it's not a surprise. The German response continues to be all over the place and the fractured leadership of Europe isn't helping.

The German response is not dramatically different from the response of many homeowners in the US who aren't enthusiastic about solving the problem of underwater houses. Plenty of US homeowners hate the idea of rescuing people that they think gambled and acted irresponsibly. Fixing that problem in the US or bailing out countries is painful, but to delay the process in an attempt to make a point is only going to cost more in the long run.


Cyprus has become the fifth eurozone country to seek outside financial help to shore up its ailing economy after a day of heavy selling on financial markets prompted by fear that this week's European summit will end without a blueprint to rescue the single currency.

The government in Nicosia admitted that it had been caught in the backwash from the crisis in neighbouring Greece as it formally applied to Brussels for assistance.

On a day when Fitch cut Cyprus's credit rating to junk, a statement said: "The purpose of the required assistance is to contain the risks to the Cypriot economy, notably those arising from the negative spill-over effects through its financial section, due to its large exposure in the Greek economy."

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