Euro ministers meet in Dublin
Finance ministers are meeting in Dublin on Thursday to discuss bailout terms for Cyprus. Recent reports suggest that Cyprus needs to cough up and additional 6 billion euros to get the rescue package. The total bailout might rise to a total of 23 billion euros which would be more than the size of the entire Cypriot economy. The costs of the bailout will likely push Cyprus into a deep recession with its GDP contracting 4-13% in the coming years. Such an outcome would mean that the country will be unable to pay back the massive bailout. The wildest rumours circulating around the Eurozone suggest that Cyprus is forced to sell about 400 million euros worth of gold reserves. The country will also likely renegotiate its loan terms with Russia in the coming months to foot some of the costs. Meanwhile, the euro was gaining strength spurred by good data coming from Italy, but it is improbable that the trend continues ahead of Eurozone talks in Dublin.