The Sun Will Still Shine Bright
Introduction
Cyprus has been in the spotlight recently due to the
negotiations with what has become known as the troika (the
International Monetary Fund, the European Central Bank and the
European Commission) regarding terms of financial aid. It is not
the fi rst time that a member of the Eurozone has sought to
negotiate with the troika for fi nancial aid. Ireland, Greece and
Spain all came before Cyprus but the therapy was very diff erent in
the case of Cyprus.
The problem on each occasion related to the size of public debt
and the size of the banking sector in relation to the country's
gross domestic product. In other countries, a "bail-out"
procedure was followed whereas in the case of Cyprus, a
"bail-in" procedure was imposed. In other words, in the
former instances funds were provided from the troika to the
government and banks without the depositors' participation
whereas in the case of Cyprus the depositors participated.
