Eurozone's Mistakes Could Destroy Cyprus, Warns Former President
THE GUARDIAN: Widely respected ex-leader George Vassiliou says whole European system may suffer if corrective measures not taken


When George Vassiliou is worried that is a worrying thing. Widely seen as Cyprus's most effective president in modern times, the 82-year-old is now viewed, even by his enemies, as the voice of common sense.

Today, Vassiliou is so anxious about the state of the country he governed between 1988 and 1993 that he is worried saying anything at all will only make matters worse.

It's not just the partitioned island's membership of the European Union, which Vasilliou deftly negotiated back in 2004, that is now at stake, or the imminent threat of national bankruptcy. It's what happens next if Cyprus is to have a scintilla of a hope of restoring confidence in the financial services sector that, alongside tourism, underpins the tiny nation's economy.

"Cyprus is not just an island in the sun. We have developed a unique service sector which was based on confidence in the banking system," he told the Guardian.

"If that confidence is lost then you have nothing left. Everything that has been created will be destroyed, with formidable repercussions." » | Helena Smith in Nicosia | Friday, March 22, 2013

IMF Raises Fresh Concerns about the Spanish Economy
BBC: The International Monetary Fund (IMF) has raised fresh concerns about Spain's economy, saying "far-reaching" reforms are needed to ensure its recovery.

It said the country faced "severe" challenges, including the need to urgently reform a "dysfunctional" labour market, and its banking sector.

The IMF's comments came after Spanish authorities had to rescue regional lender Cajasur at the weekend.

Last week, Spain's government passed austerity measures to cut its deficit.

This deficit - the money the administration has to borrow to pay for public services due to insufficient tax returns and other revenues - currently equates to 11% of Spain's economic output.

This is substantially higher than the eurozone ceiling of 3% and another concern that the IMF has highlighted.

It also pointed to Spain's property market slump, heavy indebtedness in the private sector, and weak productivity and competitiveness. >>> | Monday, May 24, 2010