This Great Graphic was posted on Bruegel by Zsolt Darvas. It shows the growth and employment developments in a few selected countries that have been forced to restructure their banks.
Darvas found that the financial services sector in Cyprus accounted for 9.2% of GDP and 5.6% of employment. Although may be less than many would have anticipated, it still highlights that a significant adjustment is likely over the next few years. Manufacturing accounts for a little less than 6% of GDP, suggesting limited export capacity, even if it had left the monetary union.
The restructuring of the Cyprus economy is going to be painful and prolonged. Ideas that its future lies with its energy resources will also have to come under closer scrutiny. Turkey has already made conflicting claims. A profound error, which few have recognized yet, is that Cyprus was allowed to join the EU and EMU without unification. This makes the economic restructuring all the more difficult and raises questions about its ability to exploit its energy resources.
Darvas found that the financial services sector in Cyprus accounted for 9.2% of GDP and 5.6% of employment. Although may be less than many would have anticipated, it still highlights that a significant adjustment is likely over the next few years. Manufacturing accounts for a little less than 6% of GDP, suggesting limited export capacity, even if it had left the monetary union.
The restructuring of the Cyprus economy is going to be painful and prolonged. Ideas that its future lies with its energy resources will also have to come under closer scrutiny. Turkey has already made conflicting claims. A profound error, which few have recognized yet, is that Cyprus was allowed to join the EU and EMU without unification. This makes the economic restructuring all the more difficult and raises questions about its ability to exploit its energy resources.
Great Graphic: The Coming Depression in Cyprus
Reviewed by Marc Chandler
on
March 25, 2013
Rating:
Reviewed by Marc Chandler
on
March 25, 2013
Rating:
