Eurozone banking ministers and Cyprus have agreed to a possible solution to the country's financial crisis: a 10 billion-euro bailout, in a deal that Christine Lagarde, head of the I.M.F., described as "comprehensive and credible."
The Mediterranean island's second largest bank, Laiki Trapeza, will be shuttered, which means savings account holders with more than 100,000 euros, or $130,000, could wave goodbye to 40% of their money. In short, Cyprus is looking at a long, hard recession and many job losses.
Even the European Union's Economic Affairs chief Olli Rehn admits, "The near future will be difficult for the country and its people." Most of the non-EU money on deposit in Cyprus comes from Russia, which launched a stinging verbal attack this morning. Prime Minister Dmitry Medvedev was quoted by news agencies as saying this: "The stealing of what has already been stolen continues."
Banks on the island are expected to reopen today. They have remained closed for a week, with strict limits on the amount of savings account holders can withdraw by ATM—a limit that is dropping all the time.
[Image by Flickr user He_Is_Me]