Facing imminent bankruptcy, the Mediterranean island of Cyprus agreed to a $13 billion, multi-national bailout deal over the weekend that was meant to stem a possible run on the beleaguered economies of other weak Eurozone economies, such as Italy and Spain. As part of its bailout deal, Cyprus is being forced to cut down the size of its banking sector, deal with corruption and overhaul its budgeting process. The island’s second largest bank, Laiki, is being restructured, and its large depositors are going to be hit with large tax increases. The overall impact of the bailout could cause a sharp recession in the country that would shrivel its economy by 10 percent or more in the years ahead.

Read the story.