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Let's continue with this discussion on Cyprus and taxing eurozone to pocket depositors -- me.
Well even though this news is bringing the European debt crisis back to the front page my next guest says the setback does not derail the progress of stabilizing the Euro -- -- now is -- close -- PNC financial services senior economist welcome back to the show that's nice to see it.
Give me your perspective on this news out of cypress and whether it signals.
Perhaps another financial crisis out of the eurozone.
Think so I think if we look at the fundamentals of the European economy they're looking better GDP still contracted contracting but manufacturing industries indicate that.
Things are stabilizing in Europe obviously the problems in Cyprus -- we're gonna be following them but I think Cyprus is a very small piece of the European economy.
And I don't expect that the problems there will actually spread over -- the rest of Europe.
And that's obviously coming to here but -- -- is to great question that is is this precedent setting if Cyprus ultimately does not.
Tax the deposits what's gonna stop another sovereign from using that massive bailout.
I mean certainly that does raise some big concerns -- the question is are we going to see capital leaving European banks.
Lenders there are going to be concerned about getting their money back.
You know I think the Europeans will make it clear that this is a one time deal that this isn't going to extend other European countries.
-- we'll have to see whether you know -- agree with that.
And we certainly will be watching to make sure that we don't have runs on banks in in no other European countries because of concern about that's.
And we do have the FDIC insuring US deposits up to 250000.
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