Oddly enough there are some people who have been taken by surprise by this development.
I don't understand why, in August I wrote the following:
"Cyprus has barely managed to sell Euro23.1M of government bonds.Therefore this should come as no surprise to anyone.
It achieved a "bid to cover ratio" of 1 (ie there were only just enough "punters" prepared to buy them), at a yield of 7% (the last auction in June achieved a yield of 6.25%).
A yield of 7% is "the point of no return"; it is the level at which Greece, Portugal and Ireland went with their begging bowls to others asking for a bailout.
Why is Cyprus having problems?
Around 40% of its largest banks' exposures are to Greece."