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Cyprus joined the euro only five years ago (Photo: ec.europa.eu)

Analysis

Cyprus 'business model' was no mystery to EU

Be it the German finance minister, European Central Bank (ECB) officials or the head of the Eurogroup - they all agree on one thing: Cyprus must scrap its "unsustainable business model" based on low taxes and attracting large amounts of bank deposits from abroad, mainly Russia.

The Cypriot banking sector, relying largely on deposits, is more than seven times the size of the island's economy - which means that if the banks go bust, the state cannot cover their losses.

And if Cyprus...

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