The capital controls imposed on Cyprus in the wake of the bailout deal with its euro-zone partners raise the odds of a messy euro breakup, economists warn—a scenario that could shake financial markets around the globe. Here’s the problem: While economists and traders spent much of 2011 and 2012 war-gaming scenarios in which countries might leave or be ejected from the euro zone, the precedents set by the Cyprus deal have undermined the euro in a different but very important way. The imposition of capital controls--a euro-zone first--now means that a euro held in a Cypriot bank account can’t be moved, withdrawn or ... (full story)