Economic Crisis In Cyprus Dissertation Example | Topics and Well Written Essays - 1500 words

Economic Crisis In Cyprus - Dissertation ExampleResearchable Context The study is going to quiz how competition and increased public and private debt contributed to the Cypriot monetary crisis. It would also examine the rescue model that was used in Cyprus in the economic crisis, bail-in of the Cypriot banks imposed by Euro group, and what it could have been done by the government activity and banks to avoid this situation. It would also provide recommendations to avert the financial crisis.The rationale for the study Over the last decade, the Greek government has borrowed greatly from international markets in social club to pay for its trade deficits and budget. Investors became nervous that the public debt was soaring high, which drove up Greeces borrowing costs. With the banking systems in Cyprus were experiencing intense pressure they amassed 22 billion of Greek private sector debt. This increase in public and private debt reduced economic growth plunging the country into a crisis (Faustman and Kaymak, 2013). This market concern is what initiated the study to examine how public and private debt contributed to the Cypriot Eurozone crisis.Although Cyprus had been experiencing rising living standards before the commencement of the economic crisis in 2012, serious problems surfaced in the Cypriot banking sector as primal as 2011. Cyprus borrowing costs slowly increased due to its exposure to the Greek debt (Theophanous, 2013). Furthermore, the public debt that was owned by the foreigners increased thus making the parsimoniousness unsustainable thus creating the crisis. High public debt is very detrimental to economic growth.