Cyprus' economy will get worse before it gets better, says Brookings' Elliott. It's already in recession, with 14.7 percent unemployment in January. Banks, a mainstay of the economy, will shrink. Consumers and businesses, having lost sizable deposits, will retrench. But the real question is not about Cyprus. It's whether what started in Cyprus stays in Cyprus. If it doesn't, Europe's prognosis just got a lot worse.