Hooray - the euro is saved, once again

The future for Cyprus does not look very promising, when one looks at the Cyprus deal agreed in the morning hours today. But the holy euro is once again saved, and Brussels is celebrating:

Nobody doubts that, after such a severe blow to its lucrative banking sector, Cyprus will be pushed into a harsh recession. Some sources in the troika tentatively estimate that GDP will shrink by about 10% before any hope of recovery.

Perhaps the biggest question is this: once the banks have been cleaned up and shrunk, where will Cyprus find economic growth? The promise of offshore gas deposits is still too uncertain, and tourism may well decline if Russians suddenly find the island to be less hospitable to their money.

Whether the euro zone has gained any credibility for this round of clear-eyed decision-making is a different matter altogether.

Unfortunately president Nicos Anastasiades did not have the courage to follow the advice of his archbishop and opt for leaving the sinking euro ship.