The Euro has tumbled against the majority of its peers after Dutch finance minister and Eurogroup head Jeroen Dijsselbloem alarmed markets by saying that the Cyprus bailout could be used as a template for other bailouts.
Dijsselbloem told Reuters “What we’ve done last night is what I call pushing back the risks.
“If there is a risk in a bank, our first question should be ‘Okay, what are you in the bank going to do about that? What can you do to recapitalise yourself?’
“If the bank can’t do it, then we’ll talk to the shareholders and the bondholders, we’ll ask them to contribute in recapitalising the bank, and if necessary the uninsured deposit holders.
“If we want to have a healthy, sound financial sector, the only way is to say, ‘Look, there where you take on the risks, you must deal with them, and if you can’t deal with them, then you shouldn’t have taken them on.
“The consequences may be that it’s the end of story, and that is an approach that I think, now that we are out of the heat of the crisis, we should take.”
Worries are growing among the smaller Eurozone nations that they could be next for the Cyprus treatment if they to fall on hard times. Nations such as Malta and Luxembourg all have a similar reliance on finance.
The currency has also taken a knock after Cypriot lawmaker Nicholas Papadopoulos said that the country must consider leaving the single currency after the bailout.
Current Euro Exchange Rates
As of 15:55 pm
The Euro to Pound Sterling exchange rate is currently trading in the region of 0.8484
The Euro to US Dollar exchange rate is currently trading in the region of 1.2888
The Euro to Australian Dollar exchange rate is currently trading in the region of 1.2316
The Euro to New Zealand Dollar exchange rate is currently trading in the region of 1.5442
Comments are closed.