Galery

1

Approximately thus began the so-called "Greek problem". When the financial circles started to lower the credit rating of the country.

Recently, international rating agencies have begun to decrease the credit rating of Cyprus, as Standard & Poor's (S & P) did referring to the possible deterioration of credit portfolio of the Cypriot banks and th lack of strong fiscal measures by the Cypriot government.

And the question that already lingers in Cyprus: "If Greece is not already on the edge of the precipice but it is maybe a little above the bottom, then what will happen with Cyprus, whose economy has already begun to be collapse and it started to remind Ireland?".

The "collapse" of Cyprus is happening slowly but surely, despite the fact that the country has low national debt, of about 60% of the Gross Domestic Product. There is, however, a large budget deficit - about 6% of GDP. And as it is well known the deficit increases the debt and at the same time it increases also the cost of crediting. But there is another parameter that affects the once bountiful Cypriot economy. In Cyprus, economists say there is a structural deficit - ie, even in periods of development the economy produces deficits precisely because of the economic structure. Thus, the Cypriot economy is faced with structural problems similar to those in Greece, but with one difference. While Greece as well as other eurozone countries have begun to take measures to vote on medium-term programs to implement structural measures in Cyprus despite the "bells" of the credit rating agencies, which began to ring increasingly nothing like this happens.

The Minister does not even say "good morning" with the banker

Above all, they say that the two most important economic factors in Cyprus - Harilaos Stavrakis, now already a former minister of finance, replaced by Kikis Kazamias and Athanasios Orfanidis, Governor of the Central Bank of Cyprus not only do not speak to each other, but they also often make accusations against each another in the public space. Although they are both members of the communist party AKEL, they can not get to an understanding. Stavrakis was appointed by the President Dimitris Christofias and Orfanidis by Tassos Papadopoulos (president of Cyprus from 2003 to 2008). They do not cooperate, they do not coordinate their actions, and the only thing they do is to warn of the dangers to the Cypriot economy and to request that the government takes actions.

The Cypriot government is only one in the eurozone and in the European Union, which has a president member of the communist party AKEL. Dimitris Christofias has said many times that his mission is to solve the Cyprus issue (which does not seem to have made any progress), and not to solve serious domestic problems that bother Cyprus. This is also the constant accusation leveled against him. Everyone warned of the "collapse, which is coming", such as the European Commission for example, the Minister of Finance, the central bank governor, the communist party AKEL, political parties, the Archbishop, even the Nobel laureate Christos Pisaridis, who requested "taking more drastic measures in order to overcome the economic problems". Thus it was decided to be made up a medium-term program (it was described as a "short-term program") for the recovery of the public finances. It did not differ much from the medium term plan of Greece, nor from the respective Irish one, only in the values of the amounts.

Deadly explosion at the naval base made the situation worse

The deadly explosion at the naval base in Limassol caused huge damages (amounting to 2.4 billion euros or 13.8% of GDP). Cyprus remained without electricity because the blast destroyed the hydroelectric plant that supplied with power 60% of the country, the installations for desalination of the sea water also work with electricity and stopped working, the island remained without water as well, and most importantly - the entire government resigned.

And that wasn’t all!

On July 28, another serious strike happened while Cyprus was trying to heal some of the wounds caused by the deadly explosion in Limassol. The international rating agency Moody's lowered the credit rating of Cyprus by two points with a negative outlook and put the country in category Baa1 from category Α2.