Global intelligence agency Stratfor, in a report on Cyprus issued on Thursday suggested a bailout might be needed in the wake of the Mari disaster (a power station was blown up) because the country was “not far from the edge”.
“But because of its relatively low national debt and small economy, any financial help from Brussels would be both manageable and temporary," the agency said.
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. So it is unclear as to whether the Cyprus economy would need a bail out and if it did it will be for a small amount and short term. And I thought the economy was growing at a higher rate there?
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