Global intelligence agency Stratfor, in a report on Cyprus warns that a bailout might be needed in the wake of the Mari naval base disaster (a power station was blown up) because the country was “not far from the edge”.
The agency however points out that because of its relatively low national debt and small economy, any financial help from Brussels would be both manageable and temporary, and wont be as large as the one needed for Portugal or Greece . Stratfor said that Cyprus traditionally exercises more cautious fiscal policies than many European states, even running a small budget surplus during the global financial crisis.
Growth prospects in Cyprus have also been more positive and stable than in places like Portugal or Greece, with the country in recent years suffering only one recession - a mild one - in 2009. While the economy was not exactly booming before the July 11 disaster, it was at least growing, the report said. Moves by the current government however to increase VAT and lower public sector wages have been fiercly resisted by the Unions.
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