Cyprus is suffering a vicious recession as it struggles to adjust after a huge banking crisis. Despite its ailing economy a cab ride from the airport at Larnaca to Nic-osia-a journey that takes around 40 minutes-costs €50 ($69). Such high fares, reflecting the power of the taxi trade, hinder the country's attempts to rekindle its tourist industry. Reforms to tackle these kinds of uncom-petitive markets are vital if the beleaguered countries of southern Europe are to be able to survive in the euro area. By making wages and prices more flexible, they allow countries like Spain and Portugal that have lost competitiveness to regain it even though they can no longer devalue against their euro-zone trading partners.
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