This bailout may have averted the immediate risk of disorderly default and Euro exit, but economically it is completely insane. And it is dangerous, not just for Cyprus but for other countries too.
For the fact is that deposit insurance everywhere in the EU has now been undermined. The precedent has been set for insured depositors to suffer losses in order to protect Russian oligarchs and reckless banks. If the Eurogroup can impose this on Cyprus, it can do so elsewhere too.
Run, don’t walk, to get up to speed on the events in Cyprus this weekend courtesy of Frances Coppola. We’ll talk about what it might mean for the markets later today.