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Cypriot central bank chief Panicos Demetriades has become the focus of much of the anger over the bailout terms.
Cypriot central bank chief Panicos Demetriades has become the focus of much of the anger over the bailout terms.
(PETROS KARADJIAS/AP)

BREAKINGVIEWS

Cypriot bailout assumptions aren’t realistic

Reuters Breakingviews delivers agenda-setting financial insight. Its global correspondents react to stories as they develop, delivering sharp and provocative commentary on big financial news as it breaks. Click here to read more international insights.

The economic assumptions behind the Cyprus bailout look too optimistic. The official lenders, which will advance €10-billion ($13-billion) to the stricken state are counting on a hefty drop in domestic GDP over the next few years. But they may well be underestimating the economic catastrophe.