Does it really matter now whether the eurozone breaks up or not? The damage may already have been done, in terms of business confidence. A £10 billion bailout for Cyprus has been agreed, but nobody will forget that its people woke up one morning to find their bank accounts raided — something you don’t hear of happening even in developing countries. At the height of the confusion, Britain had to send out cash on a plane to its troops in Cyprus so they wouldn’t be deprived, a bit like a UN mission plopping food packets over stricken areas.
The buzz is that Russian billionaires may now stage some sort of reprisal, but the real harm is that corporations, both large and small, will now be extremely wary of doing business in the eurozone.
Is it now safer to do business in the eurozone than, say, China? A decade ago, such a question would not even have been asked, but ten years is a long time in economics.
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