Greek style problems on a smaller scale led to the need for the controversial, part saver funded bailout of Cyprus’s banks.
They lent out too much money to people who were not able to pay it back – including Greek borrowers.
Added to that is the close financial relationship between Cyprus and Russia. It means a bank bailout would benefit people who Brussels and Berlin believe should not enjoy such a safety net.
According to the most conservative figures, of the 69 billion euros in Cypriot banks at least 21 billion is in the accounts of non-EU residents.
Five billion euros worth belongs to people who do live in the EU and Cyprus residents account for another 43 billion.
The total in the banks is 700 percent of Cyprus’s annual GDP.
The Cypriot government is resisting taking more money from accounts containing over one hundred thousand euros – many held by foreigners including rich Russians.
It fears that will undermine the island’s banking business model and reputation as a safe offshore financial haven.