Crisis In Cyprus Case Study Analysis Help With Solution

Crisis In Cyprus Case Study Analysis Help With Solution


Cyprus, a small island country, joined the EU in 2004 after much political uncertainty and with the support of the United Nations (UN). It adopted the euro in 2008 and became one of the smaller members of the eurozone with 0.2 per cent of the zone’s GDP.19 Cyprus’s economic performance had been stable at that time, except for a mild recession in 2009, which was cushioned by fiscal spending worth 4 per cent of GDP and bank lending.20 Fiscal stimulus resulted in a fiscal deficit of 6 per cent of GDP in 2009. The current account deficit improved from 2008 to 2009 and was mainly financed by foreign direct investment (FDI) into the country.
Cyprus was a tax haven and attracted a lot of foreign deposits.21 Joining the eurozone was a positive signal and led to an increase in inflow of foreign deposits. The banking system also experienced a similar boost. Banks in Cyprus could use only 30 per cent of foreign deposits to extend domestic loans before joining the eurozone. However, after adopting the euro, all eurozone deposits became local deposits and led to a boom in local lending.22 In 2011, the IMF remarked that during that period of high growth and the property market boom, the economy of Cyprus also developed some “vulnerabilities.”23


How it Works

How It works ?

Step 1:- Click on Submit your Assignment here or shown in left side corner of every page and fill the quotation form with all the details. In the comment section, please mention product code mentioned in end of every Q&A Page. You can also send us your details through our email id with product code in the email body. Product code is essential to locate your questions so please mentioned that in your email or submit your quotes form comment section.
Step 2:- While filling submit your quotes form please fill all details like deadline date, expected budget, topic , your comments in addition to product code . The date is asked to provide deadline.
Step 3:- Once we received your assignments through submit your quotes form or email, we will review the Questions and notify our price through our email id. Kindly ensure that our email id and must not go into your spam folders. We request you to provide your expected budget as it will help us in negotiating with our experts.
Step 4:- Once you agreed with our price, kindly pay by clicking on Pay Now and please ensure that while entering your credit card details for making payment, it must be done correctly and address should be your credit card billing address. You can also request for invoice to our live chat representatives.
Step 5:- Once we received the payment we will notify through our email and will deliver the Q&A solution through mail as per agreed upon deadline.
Step 6:-You can also call us in our phone no. as given in the top of the home page or chat with our customer service representatives by clicking on chat now given in the bottom right corner.


Features for Assignment Help

Zero Plagiarism
We believe in providing no plagiarism work to the students. All are our works are unique and we provide Free Plagiarism report too on requests.


We believe in providing perfect, relevant and 100% accurate solutions to the student as per questions asked. All our experts are perfect in providing that so as to give unique experience to the students.


Three Stage Quality Check
We are the only service providers boasting of providing original, relevant and accurate solutions. Our three stage quality process help students to get perfect solutions.



100% Confidential
All our works are kept as confidential as we respect the integrity and privacy of our clients.

Related Services

1. The banking system grew rapidly, which led to a high growth in credit. By 2011, total bank assets in Cyprus were US$197.6 billion (835 per cent of GDP), out of which US$119.6 billion (500 per cent of GDP) were extended within Cyprus and US$37.7 billion (160 per cent of GDP) extended to Greek borrowers. By 2012, the total bank liabilities in Cyprus were US$166.4 billion (see Exhibit 5).24 Those loans took a hit on a couple of counts: first, during the Greek debt restructuring in March 2012, Greek bonds faced a 75 per cent cut, which caused the Bank of Cyprus a loss of US$2.08 billion (4.4 per cent of the bank’s assets)25; second, bad debt due to the poor performance of the Greek economy26 meant that the ratio of non-performing loans (net of provisions) to capital rose from 16.1 per cent in 2008 (Q4) to 34.8 per cent in 2011 (Q1).27
2. The poor performance of the Cypriot economy led to poor performance of public finance. Access to financial markets became difficult, which made debt rollover difficult, adding to the debt woes.28
The economic situation in Cyprus had been weakening since then, and the country had raised the issue of a formal bailout in the latter half of 2012. By November 2012, it was negotiating a bailout program, becoming the fifth EU country to request a bailout from the Troika. It was estimated that Cyprus would need close to US$22.75 billion in assistance, which was nearly equal to its GDP in 2012.29 Inability to find a way to reduce the cost of the bailout to more tolerable levels delayed the bailout program. On the one hand, the IMF wanted significant debt relief before it could make a commitment to the bailout. On the other hand, EU leaders had grown weary of the Cypriot president’s “lack of willingness to accept the reality of the situation.” They wanted to wait for the new government to be elected by February 2013 before engaging in any further discussion.

Product Code :Case33

To get answer for this question, kindly click here (Note: Don’t forget to write the product code in comment section)

You can also email us at but please mentioned product code in the mail body while sending emails.You can browse more questions to get answer in our Q&A sections here.