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Playing chicken with the euro

If Cyprus leaves, everybody loses

By Tom Streithorst  

Angela Merkel and Cypriot President Nicos Anastasiades © European People's Party

Cyprus and Germany are playing chicken—and so far, nobody is blinking. On Saturday, the European Central Bank, IMF and European Commission demanded a wealth tax on all deposits in Cypriot banks as a precondition for a bailout of Cyprus’s banking system. On Tuesday, the Cypriot parliament rejected any haircut on depositors. Yesterday morning, the ECB said that if no deal is reached by Monday, it will stop all Emergency Liquidity Loans to Cyprus and without that…

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