[LINK] "Big question mark over what Cyprus can do to escape crisis"

[rfmcdonald]

The Christian Science Monitor's Robert Marquand writes at length about the latest developments in the Cypriot phase of the Eurozone crisis.

Cyprus is today looking at a “Plan B” to save itself from a catastrophic banking default, though it appears that hopes for an immediate loan from Moscow, explored by Cypriot officials today, will not be forthcoming.

Lawmakers in Nicosia on Tuesday decided against a highly controversial proposed levy on private bank depositor holdings that would impose a nearly 10 percent “levy” or “tax” on private bank deposits in order to secure an EU bailout.

The possibility of private bank accounts being targeted by a government brought enormous world attention in recent days.

The Los Angeles Times today called the tax an “expropriation” of funds in a piece that warns the Cypriot situation could trigger a larger crisis for the euro.

Now Cyprus still needs to find some $8 billion or find itself in default. It would be the first eurozone member to do so. Cypriot banks are already closed and may remain so this week until a solution is found, causing at the minimum, anger among citizens.

The tiny island represents all of 0.2 percent of the mighty eurozone economy. But its need for a bailout and its personae as a huge offshore shelter for Russian oligarchs – brings speculation that a default will act as a wrench tossed in the mechanism of the EU economy, just as talk of the “eurocrisis” was quieting down.

Today a visit to Moscow by the Cypriot finance minister for a possible bailout of $2 billion to $8 billion, yielded no offers according to Reuters. </blockquote.