Cyprus rescue raises new questions about euro’s long-term survival

ANALYSIS – The messy deal to bail out Cyprus has averted the latest threat to the break-up of the euro but at the cost of raising new questions about the single currency’s long-term viability.

Savers in other euro zone banks appear so far to be taking the freezing of balances over 100,000 euros in Cyprus’s two biggest lenders in their stride. Perhaps they judge that events in a tiny, far-away island with outsize banks and a reliance on deposits from Russian oligarchs hold little relevance for them.

Yields on Italian and Spanish bonds held broadly on Monday, reflecting a belief that the European Central Bank‘s promise to buy struggling euro members’ bonds if need be – a program known as Outright Monetary Transactions (OMT) – will prevent a spillover from Cyprus....more

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