Spanish economy minister Luis de Guindos has warned that a fragmentation of the European banking system could end in deposit flight. Guindos said that he thought the original proposal for a bailot of Cyprus was bad, but that a good solution was found in the end.
We saw reports yesterday that €1bn left Cyprus during March despite the introduction of capital controls. While many eyes look to the strength of the euro to assess the strength of the Eurozone, we should perhaps be more concerned about movements of the euro within the currency union. Figures this morning that saw German trade volumes fall do no favours to the view that the Eurozone crisis has passed.