Cyprus has reached a bailout deal that will keep the tiny island nation in the European Union. As we pointed out, those with bank deposits of less than 100,000 euro apparently will go mostly unscathed. Those large foreign depositors with more than 100,000 euros in a bank will pay the price.
The good news here is that the move will keep a meltdown from happening in Cyprus. Some of the wealthy Russians and other foreign depositors are not going to like this deal one bit, as a large portion of their deposit assets will be used for the deal.
The good news for America and for most of the rest of the Western hemisphere is that the nation of Cyprus can go back to being completely irrelevant and of no concern whatsoever to the rest of us. The CIA World Factbook lists Cyprus as having a whopping 1.15 million souls, and its 2012 gross domestic product for 2012 was forecast to be about $23.57 billion, on a purchasing power parity with a world GDP rank of 125. In short, Cyprus would be a small company on the S&P 500 Index if it was a public stock. Its GDP per capita was estimated to be the equivalent of $26,900.
Cyprus joined the European Exchange Rate Mechanism in May 2005, and it adopted the euro as its national currency at the start of 2008, just in time for the recession. The nation’s GDP breakdown has only 2.4% agriculture, 16.7% industry and 80.9% services. Services would be tourism and banking.
National Bank of Greece S.A. (NYSE: NBG) traded up 10% in overseas on trading on last look.
S&P 500 futures are up seven points and DJIA futures are up about 40 points. Stocks in France and Germany are both up more than 1% today.