So, just when you thought Cyprus would fall below the radar for a while, today Cyprus Finance Minister Michael Sarris resigns. Sarris’ resignation comes just days after the European financial community bucked up Cypriot banks with a 10 Billion Euro bailout. Some in the Cypriot political community believe that the deal should have come sooner and it remains to be seen whether Sarris has become the fall guy for the bailout taking as long as it did. Cyprus did get some concessions on an extension from three to five years to meet the fiscal conditions of the bailout, as well as the preservation of healthcare for 170,000 Cypriots. Cypriot government spokesman Christos Stylianides noted that the agreement “should have taken place a lot sooner, under more favourable political and financial circumstances.” But he noted that the situation in Cyprus is now “normalizing,” paving the way for the economy to get back on solid footing.
The conditions of the bailout are painful not only to the banks (the Bank of Cyprus and Popular Bank took major losses on Greek debt), but also to the holders of deposits in excess of 100,000 Euros as deposits in excess of that amount were, at a minimum, frozen, if not ultimately forfeited. The political fallout is such that the Cypriot government appointed a three commissioner panel to investigate the causes leading up to the almost collapse of the Cypriot financial community. While Cyprus’ president, Nicos Anastasiades, expressed sadness about the finance minister’s resignation, he believes that having Sarris out of the way will help ensure the investigation progresses smoothly. Taking Sarris’ place will be Harris Georgiades, the former Minister of Labor and Social Insurance.
On the heels of the painful Cypriot bailout comes the new jobless numbers for the EU. Official European Union figures published Tuesday showed Eurozone unemployment reaching a record high of 12.0% in February. Nineteen million unemployed people contributed to the EU reaching that 12% record, including approximately 3.6 million of them under the age of 25. Those numbers mean that one in every four persons under 25 years old are unemployed. Many economists believe that those numbers coming in the wake of the splashy and drawn-out Cypriot bailout negotiations portend a continued slow growth, if not a flat second quarter in the EU.