Here are some quick points on the Cyprus deal which the Eurogroup agreed to last night. The agreement outline is very much along the lines of what I have been recommending regarding bail-in guidelines (extended version here for subscribers) and is therefore a much fairer deal than the deal presented to Parliament last week. But the debt sustainability of the sovereign remains a question, as do the capital controls and potential for deposit flight. The Cypriot economy will not do well in the coming years.
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