Cyprus has carried out an emergency restructuring of it's seriously ailing banking system that the Troika officials are happy with and will now allow the Euro 10 billion bailout funds to be released.

The situation was initially accepted by the financial markets very calmly, then the realisation that a tax on savings accounts may be the template for future rescues of larger Eurozone members AND the fact that a lot of Russian funds have been parked in Cyprus, benefitting from tax breaks, caused contagion fears.

Smaller savings account holders will not face any penalties but those with balances in excess of Euro 100,000 will bear the brunt of the losses as a new bank is created from Laiki bank, that will now be spit into two and deposits will be transferred to the Bank of Cyprus, the "good" bank in this situation and the Laiki bank will be wound down in due course, the "bad" bank.

The bailout will solve the situation that exists now and give the Cypriot Government breathing space and the financial liquidity it so badly needs but what it will do the to investors that take advantage of Cyprus's status as a tax haven, used extensively by Russian companies, but not just by Russians, in the future, remains to be seen.