Cyprus options: Nothing good.

The nature of the problem:

The two main Cypriot banks are insolvent and need E17B to continue. They appealed to the 'troika' (the IMF, the ECB and the EU) to get the money. The troika replied that they are willing to lend E10B, but Cyprus has to come up with E7B.

The original solution:

To clip every deposit a certain percentage as a 'tax.'

Status: Voted down by Cypriot Parliament. Bank holiday freezes accounts.

Options left now:

1. Try to clip unsecured accounts. Only raises E200M.

2. Try to mortgage gas fields in Mediterranean. Difficult to gage how much these are worth. Takes too much time.

3. Try to get a direct loan from Russia. Very problematic. The Russians are not keen to do this and the Europrans aren't either.

4. Raid Cyprus' pension funds as done in Ireland. Doable, but may not be enough.

Consequences: If this can't be papered over, Cyprus will melt down financially. At stake are almost $500B (the contagion) or E30B in accounts