The Guardian's economics leader writer, Aditya Chakrabortty, has been mulling over the implications of the suggested deal in political-economic terms, and he reckons it's pretty damaging for both sides:

In Cyprus, President Nicos Anastasiades, who has been in the job for less than a month, looks like a dead man walking. Going by what's being briefed tonight, the agreement is substantively the same as that demanded by the Troika last week.

Perhaps a few variables have been changed (such as the protection of smaller savers' deposits), but not enough.

And if you look at what's happened to leaders of other peripheral euro countries who've accepted the Troika's structural-adjustment programmes, they've nearly all been toast. The one major exception i can think of is Madrid's Rajoy, who Brussels kindly allowed to do a bit of face-saving.

As for the troika, Oli Rehn et al will be able to claim that at least they avoided the doomsday scenario of pulling the plug on the Cypriot banking sector -- with all the turbulence that might entail. And, going by the placidity of continental markets over the past week, they'll also be entitled to say that they have convinced investors that Cyprus was a tiny economic anomaly rather than the rule.

But again, we've had the farce of eleventh-hour negotiations where it looked for a bit as if the fate of a 17-member currency area hung in the balance.

We now have capital controls in an economic area, one of whose main purposes is to facilitate the free flow of capital; I speak as someone who sees a place for capital controls, but some financiers will see that as a dangerous precedent.

While we're talking about precedents, here are two more:

1. You've been treated to the unlovely sight of the Troika and Nicosia apparently agreeing to raid the life savings of small savers. Anyone living in another small, weak, euro member state should take note.

2 And you've also had a euro member turning away from its 16 fellow members and towards a non-EU country for help and political support. Just imagine if Cyprus had been dealing with a serious partner, rather than Russia?

So yes, the euro-juggernaut rolls on, even while half an island worth

0,2% of its GDP falls off.

Cyprus faces a Greek-style depression, the crushing of its national business model (the hot money's already fled to Latvia; and now it won't be coming) and, I'll bet, more dollops of austerity. But the euro project has once again been shown to have some serious structural and institutional problems.