The Cyprus drama has only just begun

Analysts today are talking about the GDP of Cyprus falling by 20 per cent over the next four years, and stressing that this is a conservative estimate. This, and the attitude of the Church there, does make me wonder if the Cypriots might not reject the bailout again, revert back to the Cypriot pound and try and devalue their way to recovery. This could hardly be more painful than a bailout that will make credit nigh-on-impossible to obtain in Cyprus.

The second thing is surely any company or institution with large cash reserves is moving them out of any bank in the Eurozone periphery. If, as the head of the Eurogroup has said, Cyprus is a template for dealing with failing banks, then no one should want to have more than €100,000 in anything but the strongest banks.