10 Lessons from the Cyprus Debacle

By destroying Cyprusâ??s bank-centric business model and by imposing severe austerity on the country within a euro straitjacket, the International Monetary Fundâ??European Union bailout package for Cyprus is likely to lead to the literal collapse of the Cypriot economy over the next year and to Cyprusâ??s exit from the euro. Such a course of events will have important ramifications for the rest of the European Monetary Union. When the dust settles and future historians seek to draw lessons from Cyprusâ??s sorry experience in the euro, they will likely draw the following conclusions.