In a news briefing, IMF spokesman Gerry Rice, when asked if Cyprus’ rescue could be a model for other crisis stricken-countries, stated that, “The agreement that was reached in Cyprus was an agreement that has the full support of the Cypriot authorities, the entire Eurogroup and the three institutions called the Troika. The case of Cyprus was very complex and unique in nature. It would be difficult to extend the case to the rest of Europe or to the world.”
Rice, among other statements, stressed as well that the Cyprus case highlighted Europe’s need to keep moving towards a banking union, which includes not only a single supervisory mechanism, but also a single resolution mechanism.
Rice said that in fact Cyprus was already facing a crisis situation. That very agreement reached in Brussels deals with these challenges up-front. “It focuses on dealing with the two problem banks and fully protecting insured deposits in all banks through a clear strategy that ensures the debt sustainability and does not excessively burden the Cypriot taxpayer,” he said.
Finally, Rice was also quoted as saying “Now, the adjustment that the plan will entail as the financial sector downsizes and the economy adjusts accordingly will be a difficult process for the Cypriot people over some period of time. We are mindful of that, but it will ultimately result in an economic model that is more sustainable and growth promoting.”