Cyprus Bailout Pictured

After many days of uncertainty finally a deal has been made between the Troika and Cyprus. The island was required to raise 5.8 billion euro's (bail-in), when Europe would contribute 10 billion (bailout) to save the banks in Cyprus hit by huge losses incurred on Greek assets. In this deal Laiki bank was agreed to shut down, which means that Senior bondholders and savers over 100.000 (also for Bank of Cyprus deposit holders) are seized by the government.

Reuters

2013 Greek Budget: More Austerity

The Greek Government will again implement significant budget cuts in 2013, which it agreed on in November with the Troika. Pensions and state salaries are the main places where the cuts will take place. The reduction in the deficit consists for about 4/5th of budget cuts and 1/5 of tax increases. This total planned tax increases and budget cuts in 2013 are 9.4 billion euro's.

The reduced budget deficit will still increase the government debt however.

Note: the Greek parliament has approved the budget in November.

Greek Debt Composition 2012

One reason the Northern European countries bailout out Greece was because banks, for example German en French banks, heavily invested in Greek government debt. Since then the European Commission (EFSF) and the ECB have bought quite a lot of debt from the banks. This means that the bond holders of Greek debt shifted from only private parties to mostly public holders now.

This means that when there would be a second round of writedowns on Greek debt the European tax payer will have to pay as well.

Ireland: Deficit Versus Debt

This graph from the European Commission compared the Budget Deficit and the Gross Government Debt for Ireland.

European Commission

Belgium: Deficit Versus Debt

This graph from the European Commission compared the Budget Deficit and the Gross Government Debt for Belgium.

European Commission

Netherlands: Deficit Versus Debt

This graph from the European Commission compared the Budget Deficit and the Gross Government Debt for the Netherlands.

European Commission

EU Real GDP By Contributions By Member States

The European Commission published its European Economic Forecast - spring 2011, from which I will post several graphs today. For
ecast - spring 2011
Contribution by Member States of the European Union to Real GDP Growth of the EU.

European Commission