This note draws on the latest European Commission assessment of Cyprus’s sovereign outlook1 to present a range of scenarios for the future path of the country’s public debt ratio, based on different underlying assumptions regarding the evolution of the domestic economy. As a reminder, the 25 March 2013 Eurogroup agreed on a financial package for Cyprus, spanning a 3-year period and consisting of up to €10bn in external financing along with additional funding of ca €13bn secured by a range of burden-sharing measures to be adopted by Cypriot side.2...
