# Cyprus likely to leave Euro if Greece does?



## hip999 (Jul 24, 2011)

Is the connection between Cyprus and Greece so great that Cyprus would leave the Euro if Greece does (or when Greece does)?


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## Guest (May 17, 2012)

Ofc you never know but but as I see it Cyprus dont have that strong bonds to Greece and have no reason to leave the Eurozone. 
If they should leave is because of their own problems and what I know they dont have that big king of problems even if they have a lot of others.

And the Cyprus ekonomi is so small that would be quite cheape to bail them out and on feet compared to Greece and the other PIGS contries.

And it would ofc be a disaster for Cyprus to leave, as it will be for Greece


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## Veronica (Apr 5, 2008)

The main connection between Greece and Cyprus is the fact that they speak a common language( well sort of)
Cyprus is a totally independant country and although the economy in Greece does affect Cyprus to some extent because they do a lot of trading between the two countries it will not affect it to the point that Cyprus would leave the Euro.
The banks in Cyprus do have some problems as they lent the greek banks a lot of money but the country is reasonably stable compared to many others and with the oil and gas which has now been discovered offshore the future for Cyprus looks good.


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## zin (Oct 28, 2010)

The connection with Greece and Cyprus is only strong with certain parties. Right now we're a bunch of communists so our loyalty is more Russian


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## Purplecat (May 2, 2012)

I've been following this very closely. It's well worth reading this article about it. 

http://www.nytimes.com/2012/04/12/b...-shore-up-teetering-banks.html?pagewanted=all

This gives you a lot of information about this. At the moment there is a lot of speculation about what will happen to the euro if Greece defaults. But we have to see who wins the next election next month first. A really huge problem is that trust has been lost in the Greek banking system and as of yesterday, it was reported in the FT that 1 billion euros has been withdrawn by Greek business from Greek banks and put into more safe areas such as Germany. The Russians are unwilling to lend more money to Cyprus, so if they are bankrupted by the Greeks defaulting, then where will they turn to? There is always the option of a bail out from the Eurozone but then the austerity measures will be applied to Cyprus, and it would most likely signal an end to favourable taxation in certain areas. 

It's unlikely that Cyprus would leave the Euro. It would be suicidal at this stage. But, as is being speculated on at the moment, if Greece does leave, it may well spark mistrust in the Spanish, Portuguese and Italian banks, which could have a knock on effect of more Euro transfers from those banks to what would be perceived as the safer German euro which would not devalue if the Euro is abandoned. At the moment, if Greece left, the Drachma would initially be launched at a rate of 1 to the Euro but would quickly devalue to at least 50 times less than that. 

So in all, I'd say watch what happens with the Greek elections and if the worst does happen and it leaves the Euro and defaults on its loans, then keep an eye on what's happening to the Spanish and Italian banking systems. Also the Euro rate will be affected because of the uncertainty surrounding the smoothness of the transition. Right now is not a sensible time to be changing extremely large sums of money into Euros. Wait and see.


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## Guest (May 17, 2012)

Purplecat said:


> I've been following this very closely. It's well worth reading this article about it.
> 
> http://www.nytimes.com/2012/04/12/b...-shore-up-teetering-banks.html?pagewanted=all
> 
> ...


This is only one opinion. There is as many opinions as there are experts out there.

I have not any worries that Cyprus will leave Euro, and if they get problems they will get help I am sure. And if the Greek economy is 2% of the total EU economy, how much is Cyprus? 0.4 % or less? And with the possible oil and gas worth450 billion USD I think they will be helped.

If Greece leave and get Drachmer some expert says that the exchange rate will be up to 1:100 and and that can be the chanse Greece has even if it will hurt. But Euro will survive it.

If on the other hand Italy, Spain , Portugal leaves, then I think Euro is dead and that will cause a long depression

As you say we have to see.


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## cds usa (Jan 4, 2011)

The britiish pound seems to be the safer harbor at the moment. It will also be affected but not as much!


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## Purplecat (May 2, 2012)

Greece would definitely leave the Euro at 1 to 1 with the new Drachma if this happens, as it would with any potential relaunch. But it only joined at 350 drachma to the euro. I haven't even seen a market prediction that it would remain at such a low rate or stabilise at 1.100, but would definitely be interested in reading that and as to why it would stabilise at that rate considering the market reputation and trust in a country that defaulted on billions of euros worth of debt. It all adds to the picture. 




Vegaanders said:


> This is only one opinion. There is as many opinions as there are experts out there.
> 
> I have not any worries that Cyprus will leave Euro, and if they get problems they will get help I am sure. And if the Greek economy is 2% of the total EU economy, how much is Cyprus? 0.4 % or less? And with the possible oil and gas worth450 billion USD I think they will be helped.
> 
> ...


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## Guest (May 17, 2012)

Purplecat said:


> Greece would definitely leave the Euro at 1 to 1 with the new Drachma if this happens, as it would with any potential relaunch. But it only joined at 350 drachma to the euro. I haven't even seen a market prediction that it would remain at such a low rate or stabilise at 1.100, but would definitely be interested in reading that and as to why it would stabilise at that rate considering the market reputation and trust in a country that defaulted on billions of euros worth of debt. It all adds to the picture.


I will try to find the place for you.

Perhaps the Greece people realize the danger in leaving before the new election. An interesting question will be what will happen with all the hidden euros in freezers and foreign bankaccounts that the greeks have


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## Veronica (Apr 5, 2008)

Vegaanders said:


> I will try to find the place for you.
> 
> Perhaps the Greece people realize the danger in leaving before the new election. An interesting question will be what will happen with all the hidden euros in freezers and foreign bankaccounts that the greeks have


Thats a very good point Anders. 
When Cyprus was changing over to the Eurothe Cypriots went panic buying as they had to get rid of the money they had hidden under their mattresses.


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## cds usa (Jan 4, 2011)

The following is a response I got from my sister who works in Athens but is not Greek, it cracked me up because I can just picture some Greek politician spouting this nonsense:

Greece is just fine! You are listening to German propaganda, they just want Acropolis for peanuts, they plan to move it to Germany as a tourist attraction. And they owe us money from world war II. And they wear socks with sandals!


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## zin (Oct 28, 2010)

Cyprus had bids from 29 different companies in 9 different countries for a number of the gas fields only just last week. Cyprus is fine.


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## Guest (May 17, 2012)

cds usa said:


> The following is a response I got from my sister who works in Athens but is not Greek, it cracked me up because I can just picture some Greek politician spouting this nonsense:
> 
> Greece is just fine! You are listening to German propaganda, they just want Acropolis for peanuts, they plan to move it to Germany as a tourist attraction. And they owe us money from world war II. And they wear socks with sandals!


My German friend in Athens say almost the same. The Greeks have money, only the state is bankrupt


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## Guest (May 17, 2012)

zin said:


> Cyprus had bids from 29 different companies in 9 different countries for a number of the gas fields only just last week. Cyprus is fine.


Yea if they end up as Norway they will have another problem, too much money. But housemarket will boom.

I was in Norway last week. A hamburger McDonalds that cost 7 euro in Germany cost 12 eiro in Oslo. Crazy


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## kim1967 (Feb 26, 2012)

hip999 said:


> Is the connection between Cyprus and Greece so great that Cyprus would leave the Euro if Greece does (or when Greece does)?


saw this and thought it might interest some of the members

Greece exit from Eurozone would hit Cyprus hard - Cyprus Property News


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