Cyprus crisis could spread, Spain's economy minister warns

Economy Minister Luis de Guindos said on Sunday that unless countries including Spain reached a "conclusive decision" at Sunday's emergency meeting of finance ministers, the Cyprus crisis could spread to other European countries.

If they failed, he added, there could be an "undesirable situation for the whole of the Union."

"Cyprus's problems go well beyond the Cypriot economy," he added, before entering a Eurogroup meeting that began at 8pm on Sunday evening.

Even though De Guindos asserted that the EU's management of the Cyprus bailout crisis was not disastrous, his way of explaining it suggested otherwise. The Spanish minister said that 10 days ago, when the Eurogroup met to establish a levy on all Cypriot bank deposits to finance the bailout (including those below 100,000 euros, the limit under which savings are, in principle, guaranteed in all European countries), Spain opposed the move.

Following that controversial decision, Cypriot authorities proceeded to freeze all bank accounts on the island to prevent a massive capital flight, an unprecedented move in Europe that mirrors the infamous 2001-2002 "corralito" in Argentina, and revives fears of similar action in Spain if a bailout is finally required.