Greek election buys time for smaller Cyprus

City A.M. Reporter
GREECE’S election has pulled its smaller neighbour Cyprus back from the precipice – for now – according to experts.

“Not Armageddon just yet. Armageddon put off for another day,” said Fiona Mullen, a Nicosia-based economist for the consultancy firm Sapienta, who estimates Cyprus would need €10bn or more if Greece were pushed out of the euro.

“I was worried last week that Cyprus had left it too late to go to the European stability mechanism to cover itself – not only for a bank bailout but for a Greek exit. It seems to have got a bit lucky.”

Cyprus, a small country with just a million people but a big offshore financial industry, still faces a European bank regulator deadline in just two weeks to find €1.8bn – around a 10th of its GDP – to bail out its second largest lender.

Stelios Platis, who runs a financial consultancy in Cyprus, said the result would buy Nicosia time, but not necessarily much, given its exposure to Greek banks.