Much of the economic news coming out of the eurozone and the European Union (EU) has focused on the larger countries such as Spain, Greece and Italy. However, a small member nation – Cyprus – has been quietly requesting a bailout from the European Commission and the European Central Bank (ECB) as a result of its own deteriorating finances. Yet some economists and political leaders have criticized the Cypriot government for what they allege is merely a backdoor deal aimed at helping Russian oligarchs who have bank accounts in the island nation.
According to various news outlets, including the U.K.-based The Telegraph and Reuters, Cyprus officially requested a bailout during August 2012, when nonperforming Greek investments began to plague its largest banks. The deal has been quietly simmering since then, but recent envoys from the Mediterranean nation have been sent to the major European power centers, most notably Germany, to push for a finalization.
On Thursday, however, German Chancellor Angela Merkel dealt a potential blow to the Cypriot government's hopes for a speedy resolution, saying that there would be no "special conditions" that would spare it from a potential restructuring that could include spending cuts and tax increases.
Some sources suggest that the reason for the delay is speculation that many of the proposed funds would merely be funneled into the bank accounts of wealthy Russian citizens who possess bank accounts in Cyprus. These allegations have been circulating in the German media in recent weeks, and some of the central European nation's left-leaning political parties have latched onto the idea as a way to discredit Chancellor Merkel.
With yet another potential sovereign bailout on the horizon, it's hard for investors to see positive growth signs coming out of the Europe for the foreseeable future. As such, those with financial stakes in global markets need to undertake some form of wealth preservation to protect themselves economically. To learn more, visit GreatWealthStrategies.com today.