Cyprus is the latest European nation to be on the verge of receiving an EU bailout.
Finance ministers from EU countries are meeting today to discuss a $22 billion (U.S.) bailout of the island nation. Germany is resisting and insisting that those who have deposits in Cyprus banks pay for the rescue calling it a “bail-in”. Continue reading
Ratings firm Finch has cut the rating of the country of Cyprus to junk status. The cut is believed to be in response to Cyprus banks holding much of the real estate debt of Greece.
Fitch states that Cyprus will need at least 4 billion euros to support its banks on top of 1.8 billion euros needed to recapitalize its lender Cyprus Popular Bank. The bank needs and the junk rating will make it almost impossible for the country to borrow from international markets. Continue reading
Spain’s economic woes took another hit when credit agency Moody’s cut the country’s bond rating three notches to Baa3. The rating is just one notch above classifying Spanish bonds as “junk bonds.”
The credit dip was attributed directly to the country’s 100 billion euro bailout from fellow euro zone countries that was approved over the weekend. Lenders have been stating concern for Spain’s future in the euro zone as a result of their continuing banking woes. Continue reading
Another member of the euro zone is on the verge of needing an EU bailout.
Cyprus has directly impacted the debt load in Greece due to loans taken from it’s banking system.
“The possibility of addressing financial stability mechanisms to support the banking system, due to the problems created by excessive exposure of banks to Greece, is a serious responsibility,” Cyprus spokesman Christos Christofides told a press conference. Continue reading
