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I might point out that these discussions in the press have little to do with the survival of Cyprus. If Cyprus leaves the Euro Zone there will be many major players who will lose money. Those owed money by either the Cypriot government or the Cypriot banks would be at risk. So too (obviously to a lesser extent) will those with loans to the governments or banks of the PIIGS because of increased outflow of capital which would obviously ensue (controls or not) if the possibility of a repeat performance had a higher probability.

The reverse is also likely true. There are those who I suspect have taken the opposite bet and stand to gain greatly on their long-shot odds (possibly with credit default swaps?).

It is true that the Cypriot people will suffer beyond their expectations if Cyprus leaves the Euro, but I don't think many of the parties betting on either side of the table really care enough to change their minds. The world's press is a forum which can be used by these parties to incite political anger or calm people down and I would imagine there are press releases and stories being generated by both sides (as the stakes are huge and creating "news" is cheap).

"Reality" will be created based on the success or failure of the parties to have their versions of the story told (or possibly the manic-depressive scenario of each alternately getting a hold of the world's collective ear). Also be aware that the news we hear in the States may not (probably doesn't) reflect the nuance of how the news is heard/interpreted elsewhere.

There are factors which continue to bind Cyprus to the Euro Zone, but none of them likely involve the well being of the Cypriot people, government (or even the integrity of Cyprus itself).

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