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Cyprus represents 0.2 % of the EU's combined GDP. It's a fart in a thunderstorm but the media are treating it as a proxy for everything else. It's the downgrading of Greece that's screwed Cyprus because that's where the Cypriot banks traditionally stashed their liquid assets. A special case that will have to be treated as such and it needn't upset the big applecart. If it does, then the tail really is in control of the dog.
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