Cyprus – The Eurozone Crisis – Whatever Happened To Basic Education?

So the banks in Cyprus have reopened today, but with the imposition of strict and unique capital controls that are a condition of the rescue package ceded by the other members – as always, principally Germany – of the Eurozone. But how has the situation in Cyprus – and in Greece, Ireland, Spain and Portugal, for that matter – been allowed to happen? Many will argue that the creation of a Eurozone embracing so many different cultures and economies was never going to work and they may be right. It’s a valid point to look at, say, Germany and Cyprus and say that it’s completely illogical that they should operate a single currency. But how about the more basic question of credit risk? There is a simple educational tenet that says if you are granting credit to governments – political (or sovereign) risk – or companies – commercial risk – then you must analyse the implicit risk before deciding ‘how much and for how long’. In short, what are the chances of your being repaid – or not, as the case may be – on a timely basis at the end of the day?

Highly paid economists may argue the point, but the key to preventing any form of debt crisis is education, whether you are granting credit domestically or internationally. Fortunately there are some fine educational institutions around. Domestically, The Institute of Credit Management (ICM) – – offers the very best in education and training as does its international counterpart The Association of International Credit and Trade Finance Professionals (ICTF) – I commend the citizens of Cyprus and the wider Eurozone to have a look at them.

Good luck to the citizens of Cyprus today and in the coming weeks and months.