Cyprus

I've written nothing about Europe for months, and thought perhaps I should mention Italy (rise of Grillo's 5-Star Movement).

But suddenly Cyprus has the limelight. Eurozone finance ministers imposed a deposit tax in order to fund a bailout; and the popular outrage, and threat of a bank run, has caused a drop in the markets as far away as Australia.

I find this peculiar; Cyprus is a small country. Why should events there have such an effect? Is this just mindless panic - "bad news from Europe!" - that will be forgotten after a few days, or is there actually reason to think that Cyprus matters this much?

I know there's lots of Russian money there; I assume the country has been affected by the Greek crisis. But I still think I'm missing something.