However, Iceland is much more isolated than Cyprus so maybe that is the main reason that Iceland was successful in escaping the banker's claws. Iceland also has a lot of natural resources and highly educated people. Whatever Cyprus lacks in those areas they makeup for by having a big brother named Russia who has a vested interest in that location.
Thinking outside the box: Should Cyprus and Russia get together and Cyprus issue a gold-backed currency using Russian gold, the euro (and the dollar) would be toast! In return, Russia would get a base of operations in the Mediterranean. Imagine that happening?