The Cypriot and Greek banking systems are pretty co-dependent with Cypriot banks being heavily exposed to Greek public and private sector debt. Cyprus' top three banks had to write off 50% of the nominal value of the €5.3bn of Greek government bonds they had bought under the EU's bailout rules.
Although Cyprus has requested an EU bailout, they are still in talks with Russia and China over a bilateral loan to try and avoid the punishing EU austerity that has devastated the Greek economy and ultimately lead to their own demise.
Cyprus takes on the EU presidency this week which is pretty symbolic - a divided, bankrupt country whose economy has been undermined by EU austerity in Greece, which is run by a communist and has such little faith in the EU bailout process that it would rather go to Russia or China than its own EU partners for help. The headlines will be writing themselves in the next few weeks.
Stuart Parr is a 
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