Just two steps above the default. Moody's downgraded Cyprus' sovereign debt rating from B3 to Caa3, with a negative outlook.
The American agency's decision is linked to the growth of public debt in Nicosia, in turn determined by the need to recapitalize a banking system affected by exposure to Greek institutions and by the increase in insolvencies on the loan front. Maybe not this year, but according to Moody's Cirpo will risk bankruptcy in the future.
In any case, this morning the EU commissioner for economic and monetary affairs of the EU, Olli Rehn, said that at the moment, cutting the Cypriot debt "is not an option" on the table.
