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03/21/2013

Making sense of the Cyprus mess: A reader's guide

Cyprus
People line up at an ATM at a branch of Laiki Bank in Nicosia, Cyprus on Thursday. (Yannis Behrakis/Reuters)

As the tiny Mediterranean nation of Cyprus teeters on the brink of collapse, top financial writers have quickly turned their gaze on an island that wasn’t seriously on anyone’s radar until last week.

Nobel prize winning economist Paul Krugman summed it up for most global biz watchers in a recent New York Times blog post: “Ok, I didn’t see that one coming. With all the problems in Greece, Italy, Spain, and Portugal I wasn’t watching Cyprus.”

But in the span of a few days, writers have charged up to speed incredibly fast and produced everything from near "For Dummies" guides on the Cypriot imbroglio to dramatic, insightful narratives reconstructing events leading up to the precedent-setting idea of taxing depositors' bank accounts to save the nation.

Here are some of my favourites:

  • - Atlantic writer Matthew O’Brien hit it out of the park with his story, appropriately titled, "Everything you need to know about the Cyprus bank disaster." O’Brien’s piece is fast-paced, funny and 100 per cent readable to those who don’t have an economics degree.
  • - Reuters journalists in Moscow and Cyprus have also been second to none on this file, breaking news left and right. This story, "How Europe stumbled into the scheme to punish Cyprus savers," by Annika Breidthardt and John O'Donnell, details newly elected Cyprus President Nicos Anastasiades' trip to Brussels to confront European creditors only to be badgered into agreeing to confiscate money out of people’s bank accounts. Apparently the meeting was so emotionally charged, one EU official wanted to vomit over what they were doing.
  • - Here is Reuters again with an exclusive. This time by Luke Baker. He was made privy to detailed notes of conference calls by the Eurogroup Working Group on Wednesday as they tried to come up with rational solutions and discussed Cyprus leaving the single currency eurozone.
  • - If you want business context with teeth, London's Financial Times has owned this story. Worth signing up for the paywall. This shorty neatly packages four bailout options.
  • - And of course, the last word should be Paul Krugman’s, whose blog posts have read like an academic exercise. In each blog, you can see his brain tossing the Cyprus situation around, trying to make sense of a complicated problem. As Krugman puts it, this is all, “Truly awesome stuff.”

RELATED: Dead Russian whistleblower at forefront of Cyprus bailout crisis

Tanya Talaga is the Star's Global Economics correspondent. Follow her on Twitter @tanyatalaga

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