Eurocrisis: Cyprus Now Joins the Crisis Queue, Germany Wants Further Euro Integration

Econintersect: Cyprus is adding to the Eurocrisis by applying for rescue loans. A Reuters report stated:

Two euro zone sources said the East Mediterranean island, with an outsize financial sector heavily exposed to neighboring Greece, may need up to 10 billion euros in emergency financing, more than half its 17.3 billion euro annual output.

While the sum is easily within the range of the European Financial Stability Facility (EFSF) bailout fund, it sets an awkward precedent and may lead to demands for collateral or for private bondholders to take a write-down as they did in Greece.

Cyprus needs to plug a 1.8 billion euro regulatory capital shortfall in its second largest lender by June 30. Potential aid could be more comprehensive to cover fiscal requirements, Finance Minister Vassos Shiarly told Reuters.

The last 24 hours is bringing much negative commentary to the Eurocrisis. A sampling below with hyperlinks to the major developments.

SPIEGEL Interview with Finance Minister Schäuble: ‘We Certainly Don’t Want to Divide Europe’

– spiegel.de

German Finance Minister Wolfgang Schäuble believes that only further EU integration can save the euro. SPIEGEL spoke with him about how the currency can be strengthened, the hurdles presented by Germany’s constitution and what the 27-member club might look like in five years.

Imagining the Unthinkable: The Disastrous Consequences of a Euro Crash

– spiegel.de

As the debt crisis worsens in Spain and Italy, financial experts are warning of the catastrophic consequences of a crash of the euro: the destruction of trillions in assets and record high unemployment levels, even in Germany. By SPIEGEL Staff

Steven Hansen

Source: Reuters