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The Cyprus Recipe -
But Why Experiement in Cyprus?

Economic analysts largely agree upon the fact that the events unfolding in Cyprus are part of an experiment by the IMF and the EU-ECB. Obviously they felt the need to try out drastic measures, which might be applied to other European countries.

The PIGS countries are in a deep economic crisis - but, contrary to what we were expecting, the next "economic bomb" did not detonate in any of those peripheral countries, but in Cyprus!

Italy, France, Portugal, Spain and even France have far deeper economic problems than Cyprus. But Cyprus got displayed in the headlines.

Here are several facts that minimize the risks of spreading economic havoc - this is why the EU and IMF picked Cyprus for wealth taxation:

 It's a small island in the southeastern Mediterranean - if you look at the map, it's closer to Asia than to Europe... ideal location for any financial experimentation; the key here is that it's a small island and quite far from mainland Europe

 Only 1.11 million people live on the island of Cyprus, that's the population of a large size European city - any riot, whatever would

 The economy of Cyprus only accounts for 0.142 % in the EU's economy - any major socio-economic turmoil (default, riots) will not have a major impact on the European countries

In conclusion: whatever would happen in Cyprus, there's minimal capacity for the events to spread to the rest of Europe. So the EU and IMF force the Cypriot government to tax deposits...

Let's note that the Cypriot deal didn't pass parliament at first, but the political leaders quickly came up with an alternative proposal.

Little did the IMF and EU leadership know about the effects that would propagate. And the reactions of Europeans were faster and more determined than most would have believed.

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