The traditional answer in this situation would have been to devalue the currency. Cyprus is not capable of doing this because they do not control the Euro.
It's important to note that 10% haircut is much, much less than what would have happened if Cyprus was not under the Euro and had devalued. Just a few years ago, everyone in Iceland lost more than 50%.
Some of them. Don't think that Iceland's problems are all resolved. It's still unsure if the new constitution will pass, lots of people in power do not want change.
It's important to note that 10% haircut is much, much less than what would have happened if Cyprus was not under the Euro and had devalued. Just a few years ago, everyone in Iceland lost more than 50%.