Despite ECB head, Super Mario, waxing lyrical on how he saved Euro-land, Europe’s banking sector was back in the spotlight this week. First up was the little problem of Cyprus, which last year became the 5th Euro-Zone member state to seek a bailout as its banking sector debt brought the country to its knees. The EU estimates that Cyprus will need Euro 17.5BN of “tax-payer assistance,” made up of 10BN for the banks and 7.5BN for the government, which amounts to almost 100% of Cyprus’s GDP and making it proportionally the largest euro-area rescue after Greece and about three times the size of the Portuguese bailout. Elsewhere, Deutsche Bank and Credit Agricole announced write-offs of Euro 2.17BN and 3.8BN respectively, as the Netherlands’s forth largest bank, SNS Reaal, was nationalised by the Dutch government after it pumped a further Euro 3.7BN of tax-payer money into the bank. It had already “invested” Euro 40BN, on behalf of the tax-payer in 2008, between SNS Reaal and its three larger lenders, ING, Rabobank and ABN Amro, the latter itself nationalised at the time , after the Dutch central bank deemed them as “too big to fail.”
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