(Reuters) – Lawyers have a saying that hard cases make bad law.
Whatever happens this weekend on a bailout for Cyprus will set precedents for the euro zone’s future banking union, investor confidence in the single currency area and political relations among European states.
Europe’s political leaders, and their finance ministers, are having to decide in practice at breakneck speed on issues on which they have not yet agreed in theory.
Among those issues is whether euro membership is really irreversible for all member states, or only for countries deemed systemic, and what the true meaning is of the European Union’s agreed guarantee of 100,000 euros in bank deposits.
“Lex Cyprus” will likely be a template for future bailouts, bank resolution and the protection – or not – of creditors and depositors, even if euro zone leaders swear on the bones of saints, as they did for Greece, that this is a unique case....more