Since early 2010, tensions within the Eurozone have risen sharply. What started with a Greek confession that both projections for and past realizations of government debt and deficit statistics were blatantly off the mark, developed into a Euro crisis of systemic proportions.
The Cyprus bailout program presented on Monday 25 March is much better than the proposal presented a week before. A Cypriot euro exit has been averted, but the country will face a difficult and uncertain economic future.
The eurozone GDP contracted by 0.6% q-o-q in the final quarter of 2012. Sentiment indicators suggest the economy will fare better in 13Q1, but we do not expect growth to pick up strongly in 2013 amid severe economic headwinds.