Developed countries like New Zealand can learn from Cyprus; an economy overly dependent on its financial sector rather than the real economy, is vulnerable. And the rule of law exist in our minds as much as it does in laws, courts and banks. It’s like a handshake. If one sides looses faith in the deal, doesn’t matter how many law enforcers you have, the system collapses.
Does anyone really understand what the hell just happened in Cyprus?
Disaster appears to have been avoided today with a ‘Plan B’ agreed. The draft deal, cobbled together over the weekend would see bank deposits under $100,000 untouched but the country’s second biggest bank close. It still has to be approved by euro zone finance ministers.