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The current financial crisis has hit hard some parts of Europe. The countries of Greece, Spain, Italy, Portugal and Ireland predominantly come to mind, though, in the European commission spokesperson’s words, Maarten Verveik, is that the major problems concerning the roots of the crisis falls in the bank’s decision. However, leaders, instead of limiting those banks, are exploiting the financial crisis as a reason to attack labor gains as well as the standards of living of working persons.  The financial crisis has now hit Cyprus, a southern European island country, pushing it to request for bailout funds from the European Commission.

The damaging effects of the financial crises upon the Greece people have become predominantly well known. Currently, Greece suffers twenty-five percent of redundancy-higher amongst the youth and, characteristic of the depth and breadth of the condition; people have resulted to chopping down of trees to warm up their homes. Cyprus’ economy is compactly tied to Greece’s economy, and the difficulties in Cyprus have been prominently worsened by the fecund ‘Cypriot banking sector’ speculation that is in the hands of Greek (Bono, 2013, Feb 13).

Cyprus problems emerged during the fall of year 2011 because of the Greek bonds cut. Cyprus was unable to dictate the terms Cyprus was incapable of dictating terms, which would favor it and, consequently, Cypriot banks underwent significant losses. Since the banks had subjected Cyprus to the economy of Greek in this manner, the Cyprus government was obliged to resort to the EU for a bailout (Squires, 2013, March 30).

For political aims, Cyprus opposing political parties, particularly the right-inclined DISY-party, had tried to propagate confusion on the details of the bailout. Nevertheless, clearly, some billions of euros were required for the funding sector and 1.5 b euros were required to cater for budget deficits. The circumstance that Cyprus government has had to request for a bailout has permitted what is identified as the "Troika," encompassed of representatives from the IMF(International Monetary Fund), the ECB (European Central Bank) and the EU (European Commission), to decree certain settings to Cyprus, as "remedy" of neo-liberalism and harsh austerity (Squires, 2013, March 30).

However, all around Europe it may be perceived that austerity rules have failed, European Commission hardliners, spearheaded through Germany's Merkel, are insisting on measures, which they refer to as structural reforms. Required are things such as the denationalization of resources of the state as well as cuts in health care, pensions, housing, as well as support for edification: In brief, a cutback in the overall living standard of the labor force of Cyprus. Especially the privatization of semi-public or public entities such as the telecommunications, electricity, as well as ports establishments is being called for. Specific hits on the labor force include requests such as that of adding the age of retirement to 67 as well as an across-the-panel cutback in social benefits with 15 percent (Bono, 2013, Feb 13).

In spite of these requests, the Cyprus government under the governance of President Christofias Demetris is pursuing to safeguard essential social doctrines in addition to protecting public wealth through resisting denationalizations of public entities. However, a drastic restructuring of the backing system was the stipulation enforced through the troika of global lenders – the EB (European Bank), the EU (European Commission) as well as the IMF – in return for awarding Cyprus 10 billion euros in crisis funding. The contract, hammered out in the marathon debates with Anastasiades Nicos, the newly elected Cyprus president, stopped the danger of the nation going insolvent and roll out of euro (Squires, 2013, March 30) (Squires, 2013, March 30).

Conclusively, to this end, by 2011 the Demetris’ government had managed to obtain a loan from the Russian government that allowed for a breathing room. Presently the possibilities of a loan like that, which might be huge enough to prevent the necessity for the Cyprus government to turn to the ‘European Stability Mechanism’ or bailout is not within the cards. Nevertheless, the loan from Russian joint with funds from the ‘European Stabilization Mechanism’ would liberate Cyprus from needing to bow completely to the orders of the "Troika."The new government might have a critical consequence concerning the manner in which the financial crisis affects Cyprus. If the new government does not succeed in obtaining a loan, then, in any case, the austerity measures may be affected and the cutbacks within social benefits may go beyond those requested by the ‘Troika,’ that is an extra sixty million euros in cutbacks (Bono, 2013, Feb 13). 

Budgetary Approval Process
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