Conflict & Justice

For Cyprus, Painful Medicine to Swallow in Order to Avoid Collapse

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Credit:

REUTERS

Cyprus' President Nicos Anastasiades leaves the European Council building in Brussels, March 25, 2013, after a meeting with European Council President Herman Van Rompuy and other officials to discuss a rescue package for the island. REUTERS/Sebastien Pirlet (Belgium - Tags: POLITICS BUSINESS TPX IMAGES OF THE DAY) - RTXXWFM

Cyprus has been going through a crazy week.

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(This story is based on a radio interview. Listen to the full interview.)

But the good news is that a banking collapse on the Mediterranean island has been avoided.

The bad news?

The new $13 billion bailout deal with the European Union involves significant pain.

Stavros Zenios is a professor of finance at the University of Cyprus in Nicosia.

He says the plan involves major changes for two of Cyprus' leading banks: One will be shut down, another will be restructured, and anybody with more than 100,000 euros in those banks is going to help pay for the deal.

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