Crisis Management Lessons from the Cyprus Crisis

The Cyprus crisis has produced a large number of negative comments about governance in the eurozone, especially with respect to the predominant influence of Germany in the negotiations, the ultimatum issued by the European Central Bank (ECB) and the weakness of the European Commission, which was unable to block the proposal that bank deposits of […]

Cyprus: Hope Trumps Reality

Cyprus has reached a tentative agreement with the IMF-EU-ECB team (Troika) on the economic program that will be backed by its €10 billion rescue package.  The IMF will put €1 billion, small in absolute terms and relative to the one-third share that it has had in most of its European programs but a very high share (563 […]

Flying to Ankara

By now all of us know about that Mediterranean island called Cyprus, forced to declare bankruptcy by its European brethren. Its Finance Minister, Michalis Sarris and President Nicos Anastasiades flew all over Europe including Russia for the best deal they could find to save their financial sector. That sector was built partially over the years on laundering ill-gotten gains by […]

Cyprus Reopens for Business: Now What?

The banks in Cyprus reopened today, with severe capital controls in place.  Withdrawals by residents are limited to €300 per day; local businesses are limited to a maximum of €5,000 per day.   Cross-border credit card transactions are limited to €5,000 per month, and border controls prevent travellers from taking more than €1,000 in bank notes […]

One Euro or Two?

There is a debate among market observers over whether the capital controls in Cyprus mean that there are, in effect, two euros now. It is argued by some investment banks and some economists that the capital controls create a Cypriot euro that is different from the euro elsewhere in the monetary union.  While we understand the  […]

A Short Note on Cyprus and its Aftermath: The “Euro A” and the “Euro B” – Giving the Eurocrats a “Time Out”

Europe needs a short term disaggregation plan—of the type suggested by myself and others over the past two years—pursuant to which the debtor nations beset with massive underemployment and failing economies—would withdraw from the Eurozone-proper and adopt a “Euro B” currency, administered by the ECB, with a pegged exchange into the existing “Euro A.”  Such […]

Do Capital Controls Mean Cyprus Has Already Left the Eurozone?

Cyprus is in a struggle to save itself, at least the European definition of “save itself,” and remain a Eurozone member.  But will Cyrpus even use the same euro as the rest of Europe when all is said and done? After all, banks remain closed in Cyprus, which means a euro in a Cypriot bank […]

Nowakowski on CNBC to Discuss Cyprus

RGE’s Senior Director of Research David Nowakowski appeared on CNBC to discuss the evolving situation in Cyprus, where depositors are moving out, Russian investors are cautious and bank runs have returned. View the videos below, or go to CNBC for clips here, here and here.