Cypriot banks’ high exposure to Greek sovereign bonds could force the island nation to seek European financial support if Greece defaults on its debt and possibly leaves the euro after parliamentary elections next week.
The Moody’s rating agency warned over the weekend that if Greece leaves the single-currency union and remaining nations in the euro fail to stem the resulting market anxiety, Cyprus will likely be shut out of international funding markets and downgraded. Read more “Cyprus on the Brink from Greek Eurozone Exit”
As if to remind the world of the geopolitical implications of a Greek exit from the eurozone, Turkey on Thursday said it had scrambled military jets earlier in the week to intercept an Israeli plane that violated northern Cypriot airspace.
Monday’s reported incursion coincides with mounting tensions on the Mediterranean island over oil and natural gas exploration plans there. Turkey previously condemned the Greek-speaking south when it announced plans to drill for natural resources off Cyprus’ coasts but has since endorsed similar plans on the part of the Turkish government in the north which only Turkey recognizes.
Israel has found a new regional ally in Cyprus. The basis for this relationship has been purely economic but could possibly grow deeper over time.
Israeli prime minister Benjamin Netanyahu visited Cyprus last week in order to discuss the furthering of relations between the two countries, which were mainly formed after the discovery of multibillion dollar gas finds in sea between Israel and Cyprus. The two countries focused primarily on exploiting hydrocarbon in today’s markets and other economic issues. However, the new contact between the two countries may raise concerns, particularly for Turkey, about their cooperation within the region. Read more “Israel Has a New Friend, Cyprus”