Cyprus unfazed as Greece sinks further into the mire

Although Cypriot banks continue to be downgraded by ratings agencies due to their exposure to Greek debt and despite these banks effectively being denied access to international capital markets, Cypriot economists – at least the two I heard on RIK earlier today (Marios Mavrides and Alexandros Michaelides), both of whom seemed quite normal and sensible – appear calm about the situation, asserting that the Cyprus economy and its banking sector is just about healthy enough to survive the Greek haircut, and excluding the possibility of Cyprus going the same way as Iceland and Ireland.

However, I was struck by one thing Marios Mavrides said, which was that Cypriot banks, awash with money, decided at the beginning of 2010 – i.e. when Greece’s debt problems were the talk of the world – to invest their surpluses in Greek bonds. In 2010? How stupid was that? Surely, that wasn’t a business decision; surely, that was the Greek government telling the Cypriot government to tell the Cypriot banks to join in the national suicide, which, being patriotic Greeks, they duly did.

And as if we didn’t know already that Greece has still a long way to go before it reaches the bottom, today we saw the Ochi Day parade cancelled in Thessaloniki and disrupted in various other parts of the country by anti-government demonstrators. Apparently, in Thessaloniki, when retired army officers tried to march, they were spat at by anarchists.

According to the Washington Post: ‘The protesters included leftists, anarchists, neo-Nazis, people fed up with the government’s austerity policies, and fans of the local soccer club Iraklis, which was pushed out of the top division because of financial irregularities.’