Monday, May 13, 2013

Analysis: Malta unlikely to follow Cyprus into crisis

Cyprus and Malta have a lot in common: Mediterranean islands enjoying 10 months of sunshine a year, they joined the European Union in 2004, use the euro and have banking sectors that dwarf their economies.

There are so many similarities that some investors have wondered whether Malta might follow Cyprus in needing a bailout to survive the region's economic crisis.

But Malta's risk profile is far different to that of Cyprus, which received a 10-billion-euro aid package last month aimed at preventing its collapse and a possible exit from the euro zone.

On the basis of banking risk and its economy, it seems unlikely that it will be the next euro member - after Cyprus, Ireland, Greece, Portugal and Spain - to need rescuing.