Germany won't stand in Cyprus" way, apparently Cyprus, the small economy with the relatively massive bank recapitalisation problem, may have some kind of good news in its quest for a bailout: Germany might not be so wedded to blocking or delaying said bailout after all. None of our resident German speakers are on duty right now, so here's how Deutsche Borse's MNI news service reported the Suddeutsche Zeitung story that Wolfgang Schauble won't block a Cyprus bail-out: This pressure "is so great that a bailout will no doubt have to be backed in the end," the newspaper said, citing government sources. This is all the more the case now that Cyprus appears open to radical reforms. Moreover, the package may turn out to be smaller than previously feared. There isn't a lot more detail provided, except that the rest of the eurogroup were more keen to get going with organising a bailout than Germany, which had earlier this month decided it would wait until after the Cypriot election next month to resume talks with the country's leaders, apparently because they were frustrated over the current leadership's reluctance to privatise (along with possibly other, more complicated, reasons). There's another crucial point in the SZ story: the cost of recapitalising the Cypriot banks, which were heavily exposed to Greece, looks like being revised down: In contrast previous estimates, the Cypriot government now expects to need around E8 billion rather than E10 billion to consolidate the country's banks, the Sueddeutsche said, noting that the ECB wants to see several institutes wound down. Until now, the bailout package, including around E7 billion for government funding, was expected to carry a price tag of E17.5 billion. It will be interesting to see how those new estimates materialise. The €10bn comes from a provisional Pimco report which estimated a cost of €10.3bn - which Cyprus then asked Blackrock to review, in the hope of getting to a lower figure. So, tentative good news, although we'd hazard a guess it's still too early to say that there won't be any more questions over who might bear the costs of a hypothetical debt restructuring. Related links: Cyprus threatens to open a Pandora's box - FT Will Cyprus be bailed out by gas? FT Alphaville A Cypriot seniority quirk - FT Alphaville Aphrodite's indebted island - The Economist About that sovereign-bank link we said we'd break... FT Alphaville