Free Republic

Cyprus is on the brink of bankruptcy and of becoming the first-ever country to leave the euro after the European Central Bank (ECB) issued an ultimatum on Thursday (21 March). In its statement, the ECB warned that it would turn off the tap of emergency funding to Cyprus’ banks on Monday if a rescue package is not agreed. Removing Cyprus’ emergency support could see the country's two largest banks, Bank of Cyprus and Laiki, collapse within days. Carston Brezki, senior economist at ING, described the ECB’s move as a “gun at the head of Cyprus.” …

The nightmare scenario of Greece, Italy, Portugal and Spain leaving the euro could cost the world economy €17 trillion ($22 trillion), a new study says. The figure—totted up by German consultancy Prognos for the Berlin-based Bertelsmann foundation—would amount to "a lengthy worldwide recession" stretching from the US to China and to "major strains on the social fabric and political stability" in the euro-departing countries. The study admits the consequences of a Greek exit—until recently mooted as a real option by top German policymakers—are a "mystery." But it notes that a "domino" effect in which "capital market speculation and other untoward...