The Aftermath of The Cyprus Bailout

Policy makers the Europe have successfully helped to bail out Cyprus out of its economic crisis, but many small business throughout the Euro-zone continue to struggle, which in turn causes their economy to continue on down the path of a shrinking economy. After Cyprus’ banking crisis, the amount of money being help in their banks have seen large decreases and in return other countries have seen increases in deposit. This hit towards Cyprus banks actually helped to stimulate banks in neighboring countries. Although Cyprus saw large conflicts in the money held in their savings accounts, this did not discourage citizens of other countries to feel that their money was unsafe in bank deposits. Though Cyprus’ crisis was not a positive situation, the turn out of the bailout did not have an extreme negative impact.

It is a good sign that people in other countries do not feel threatened by the situation in Cyprus. If people in neighboring countries had felt like the same situation may occur to them, then banks would see a large number of people flooding in to withdraw all the money from their savings accounts, which would in turn lead to an even deeper economic crisis.

Written by: Jessica Ho
Source: The Wall Street Journal

http://online.wsj.com/article/SB10001424127887324743704578446713186211992.html?mod=WSJ_economy_LeftTopHighlights

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