The same country that headlined our market update is the same one that headlines this week as the world seems to have an insatiable appetite for Cyprus’ banking troubles. This time we have news of a deal that has finally been struck, although not everyone is happy about it. Now it is time to take our attention from Cyprus and fixate it on one of the other struggling European nations, but no one is quite sure which country quite yet.
Deal Reached in Cyprus
The last time we were talking about the Mediterranean country of Cyprus there was no final deal for how a bailout would be funded. It was no secret that a bailout was needed, but the average Cypriot wanted to hear no news of their bank accounts being taxed.
The original deal where all bank accounts in Cyprus would be taxed was done away with, but the new deal was not much better for Cyprus’ richer citizens. All bank accounts containing 100,000 euros or more will be taxed in order to fund the bailout. This deal was reached early in the week and on Thursday an almost two week long bank holiday was lifted as Cypriots were once more able to make withdrawals of cash.
Europe Still at Center of Attention
With the situation in Cyprus more or less resolved, it is time to take our attention from the Mediterranean to mainland Europe where a slew of other nations are in need of financial assistance from both the EU and IMF, or just one of the two.
Germany has been long thought to be the most economically stable nation in the region, but recent figures have proven that thought to not be so true. Then again, it is hard to imagine Germany would sustain a lot of economic growth as they were usually the first European nation to provide assistance, be it financial or otherwise, to countries in need. It will be interesting to see how Europe reacts to this continued period of economic decline.
The Week Ahead
As we move forward to the first week of April, our attention remains fixated on Europe as well as America. In the US we are looking to see how long their economy and dollar can sustain such high value. In Europe, on the other hand, the focus will be their innumerable amounts of economic issues as it seems that the situation in Cyprus is done and dealt with.
Weekly Shift
Gold started the week at $1,610, but dropped about 13 dollars as it ended the day on Friday at about $1,597. Silver opened the week at about $28.76 but also fell by almost 40 cents to finish at $28.37.