Cyprus Approves Sovereign Wealth Fund
March 22, 2013, the Cypriot parliament passed emergency legislation relating at setting up the groundwork for a bailout deal. These bills include the creation of a sovereign wealth fund, nationalization of pension assets and imposing strict limits on the movement of capital. The Eastern Mediterranean Sea has offshore gas deposits; capital-intensive infrastructure is needed to extract the gas and transport it. The future sovereign wealth fund of Cyprus has a long way to go to receive funding from offshore gas deposits.
Gas discoveries in the Levant Basin and Central Asia could counter Russia’s natural gas domination in Europe.
Given the geographic size and population, Cyprus accounts for a miniscule portion of the European Union’s overall gross domestic product. Policy actions taken by the European Union and Cyprus will be reverberated with future bailouts. Cyprus could be the first country to exit the Eurozone.
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