Bank of America Merrill Lynch: How will Europe pay any expense of the euro by Cyprus
Without rescue deal, Cyprus will face an uncontrolled bankruptcy and exit from the euro, warns Bank of America Merrill Lynch today in a report, and stresses that the impact of this will be much worse than those who believe many in Europe .
According to estimates by the firm, the output of Cyprus by the euro will cause an uncertainty shock, although not as strong as that of Lehman Brothers, as now, the economic cycle and leverage in the financial system are at best level.
However, any return to Cyprus pound is expected to "remove" 1 to 2.5 percentage points of GDP for the eurozone in 2013. Given that the firm expects anyway economic contraction of 0.5% this year, estimates that the output of Cyprus from the Eurozone would lead to decline to 3%.
Source: Bank of America Merrill Lynch: How will Europe pay any expense of the euro by Cyprus |
