Cyprus and the EU-IMF-ECB reached a last-minute bailout deal last night, granting Cyprus a $13 billion in emergency loans while shifting a huge burden onto large depositors shutting down their second-largest bank — but confidence is obviously far from restored, and one of the currency bloc’s major finance ministers confirmed that, heck yeah, if we have to, we’ll definitely use this as a template for other future eurozone banking crises. Oof, via Reuters:

“What we’ve done last night is what I call pushing back the risks,” Dutch Finance Minister Jeroen Dijsselbloem, who heads the Eurogroup of euro zone finance ministers, told Reuters and the Financial Times hours after the Cyprus deal was struck.

“If there is a risk in a bank, our first question should be ‘Okay, what are you in the bank going to do about that? What can you do to recapitalize yourself?’. If the bank can’t do it, then we’ll talk to the shareholders and the bondholders, we’ll ask them to contribute in recapitalizing the bank, and if necessary the uninsured deposit holders,” he said. …

The approach marks a radical departure for euro zone policy after three years of crisis in which taxpayers across the region have effectively been on the hook for resolving problem banks and indebted governments via multiple rescue programs. …

“If we want to have a healthy, sound financial sector, the only way is to say, ‘Look, there where you take on the risks, you must deal with them, and if you can’t deal with them, then you shouldn’t have taken them on,'” he said. …

“It means deal with it before you get in trouble. Strengthen your banks, fix your balance sheets and realize that if a bank gets in trouble, the response will no longer automatically be that we’ll come and take away your problem. We’re going to push them back. That’s the first response we need. Push them back. You deal with them.”

Yikes. On the one hand, the No-More-Mr.-Nice-Guy attitude-shift needs to happen in some form, but I doubt that kind of threat hanging over everyone is going to do anything for the euro or its markets. Then again, this is the fundamental problem with perpetually living beyond your means and failing to practice anything even approaching fiscal sanity, and with enabling others to do so: There is no good, pain-free solution. There just isn’t. Everybody is going to have to pay for those decisions, one way or another, to the detriment of economic growth and financial stability.

Meanwhile, back at the ranch…