Cyprus Vote Delayed Once More As Latest Haircut Proposal Proves Insufficient For Parliament Support
Submitted by Tyler Durden on 03/19/2013 08:44 -0400
As we suggested, the ongoing wranglings in Cypriot political quarters has resulted in more changes. The President just proposed the 'levy' on deposits begin at EUR 20,000 just hours ahead of today's planned vote.
CYPRUS REVISED BILL SEES NO LEVY ON DEPOSITS UP TO EU20,000
However, it is still theft of private property which appears to be the philosophical stumbling block for the parties involved and therefore today's vote appears to be delayed:
ANASTASIADES TO MEET PARTY LEADERS 9 AM TOMORROW: SPOKESPERSON
CYPRUS PARLIAMENT BANK-LEVY VOTE MAY HAPPEN TOMORROW, CYBC SAYS
We patiently await news that the stock exchange and banks will be closed the whole week...
Delay , delay , delay........... looks like nothing happens until cyprus has their sit down with Moscow !
Video: Cyprus president predicts defeat
Cyprus's president, Nicos Anastasiades, predicted earlier today that his government will be defeated in today's bailout vote - and here's a video clip of the brief interview:
Asked why, Anastasiades says MPs believe the terms are "unjust", and "against the interests of Cyprus at large".
He then enigmatically add that "We have our own plans" for what happens next.
Tuesday morning updates...... Cyprus in focus.....
So much for the credibility of Reuters' Greek FinMin "unnamed" source. After the newswire presented the latest Eurogroup statement as if it was one where all deposits under €100,000 will be tax exempt, which was not the case, CNA reported a little while ago that the government has submitted a revised bill according to which only deposits under €20,000 would be exempt, and everything between €20K and €100K would still see the previous 6.75% levy. The parliamentary economic committee would discuss the bill ahead of plenary a debate scheduled for 6 p.m. Cyprus time. However, now as MarketNews reports, that is likely moot.
CYPRUS PRESIDENT: PARLIAMENT BELIEVES BAILOUT PLAN UNJUST, GOVERNMENT MAKING OTHER PLANS.
CYPRUS PRESIDENT: PARLIAMENT WILL REJECT BAILOUT PLAN –MNI
Of course, as we said nearly a day ago, if there is no consensus on the term of the bail-in, it is assured that there will be no vote today either, and possibly none tomorrow, and so on, which means that with both banks and stock markets closed through Friday, Cyprus may end up in permanent stasis indefinitely.
Alternatively, parliament may just vote, reject the bailout, tipping the country into bankruptcy, forcing it to exit the Eurozone, and finally pushing Europe beyond the Rubicon. From a somewhat more credible Reuters:
Cyprus's parliament was set to reject a divisive tax on bank deposits in a vote scheduled for Tuesday, a government spokesman said, a move that would push the island closer to a default and banking collapse.
A weekend announcement that Cyprus would break with previous practice and impose a levy on bank accounts as part of a 10 billion euro ($13 billion) EU bailout prompted some turmoil on European financial markets on Monday.
Cypriot and euro zone officials have sought to soften the initially proposed levy of 6.75 percent on depositors of up to 100,000 euros and 9.9 percent above 100,000 to ease the burden on small savers.
But passage of the bill in the 56-member chamber, where no party has a majority, was unlikely and it was not clear if the vote would even go ahead later on Tuesday if leaders were sure it would be rejected.
"It looks like it won't pass," Cypriot government spokesman Christos Stylianides told state radio.
The House of Representatives was expected to meet at 1600 GMT (12:00 EST) . Rejection of the measure would effectively block a bailout that Cyprus needs to keep its banks afloat and government paying wages and welfare.
Finally, just to give a taste of what would happen if things work out as hoped, the country's Central Banker, appropriately named Panicos, said Cypriot banks stand to lose more than 10% of their deposit base within a matter of days if a levy on bank deposits is imposed. "If the draft bill passes, we would see deposit outflows of 10 percent or maybe more in the first few days," central bank chief Panicos Demetriades told the Cypriot parliament's finance committee. He added that the central bank's and the European central Bank favoured scrapping the levy for all deposits below 100,000 euros, in line with the position expressed by euro zone finance ministers late on Monday.
He is absolutely correct, except for being a little dyslexic - what he meant was 100%.
Cyprus defense minister says parliament may not vote on bill today
Says:
- Parliament may begin discussion today.
- Government is working on a plan B.
Update details:
- This is in contradiction to what the Cypriot government spokesman said earlier who saw no indication that the vote is to be delayed.
Reaction details:
- The initial headline saw a decline in EUR/USD of approx. 10 pips over a 2 minute period before bouncing.
- Move may well have been contained by the fact that these comments are from the Cypriot defense minister and not the President or an economic advisor. Secondly, the headline was followed up by the comment that the government is working on a plan B.
Cyprus may delay vote on bank depositor tax, looking at 'Plan B'
It was unclear on Tuesday morning whether Cyprus would hold a postponed vote on a bank deposit tax demanded by the eurozone and International Monetary Fund as part of a bailout.
Cypriot government spokesman Christos Stylianidis told Skai TV on Tuesday morning that there was no indication at that point that the vote, initially expected on Sunday, would be held.
Minutes later, Defense Minister Fotis Fotiou told Skai that it was possible the debate would be delayed or that if it started on Tuesday, the vote might happen a day later.
Stylianidis and Fotiou confirmed that as things stand, there is not enough support in Cypriot Parliament to approve the tax.
Stylianidis said the government was examining changing the levy, with the possibility of savers with less than 100,000 euros in their accounts facing smaller charges or no charge at all.
Fotiou, meanwhile, compared the situation in Cyprus to the Turkish invasion of the island.
“Of course it’s similar,” he said, while adding that Nicosia is looking at other options.
“If this does not pass through Parliament then it is part of responsible politics for us to look at Plan B, which we are examining but can’t discuss publicly,” he said.
As of Monday night, it looked extremely doubtful whether President Nicos Anastasiades would get the 29 votes he would need for a majority in the 56-seat Parliament.
His Democratic Rally party (DISY) has 20 seats and will rely on support from its coalition partner, the Democratic Party (DIKO), which has eight MPs and then at least one of the two European Party (EVROKO) deputies or an independent lawmakers to support the tax.
The Communist Party (AKEL), the Socialists (EDEK) and the Greens said they would reject the levy.
However, DIKO indicated on Monday that it would not support the tax, which foresees deposits over 100,000 euros being taxed at 9.9 percent and those under 100,000 facing a one-off levy of 6.75 percent. It referred to the Eurogroup’s decision to approve the measure as “catastrophic.”
Things are not proceeding well for the troika grand larceny scheme....
Parliamentary vote on a knife-edge as geopolitics remain to the fore
As European finance ministers urged Cyprus to rethink a bailout haircut that wasn’t their idea in the first place, Cypriot authorities were flailing about into the early hours of today trying to change the terms. It now looks certain that they are moving to scrap the small customer levy in favour of a much higher one on larger depositors.
But Wolfgang Schäuble’s “it wont me guv, ‘onest” line had fallen apart by this morning. What The Slog alleges on Monday, the Wall Street Journal confirms on Tuesday:
‘Nicosia appears to have been taken entirely by surprise when presented with an ultimatum at Friday’s Eurogroup meeting in Brussels.’
And another high-profile Greek source adds, “Using Reuters the Germans are framing the story to appear as Cyprus’ fault. In other words they are blaming Anasta for wanting to protect Russians instead of Cypriots. The sad part of course is that there are people who will buy such crap because the Germanophile Reuters wrote about it….”
But even as Schäuble continued to defend his position, claiming “The levy on deposits under €100,000 was not an invention of the German government”, the Eurogroup begged to differ. Although last Sunday in an interview on public tv ARD, Schäuble directly blamed the European Central Bank, the European Commission and the Cypriot government for involving tax small savers (anyone but him, basically) ECB board member Joerg Asmussen rejected Schäuble’s accusations. He countered: “In the last days it was not the ECB that pushed for this special structure that was chosen, it was the result of the negotiations in Brussels.” And pushing hard for 40% in that meeting (with no transcript record of anyone batting for the little guy) was….Wolfgang Schäuble.
Then again, it seems Mr Asmussen himself is being economical with the truth: “One should not, through the wrong actions in Cyprus, put in risk what has been achieved at high political and financial risk in the eurozone in recent years,” Asmussen pronounced pompously. But the WSJ writes this morning that Asmussen was the one who, in the early hours of Saturday threatened to cut off Cyprus’ two largest banks from the ECB’s emergency funding if a deal was not achieved.
This might of course suggest to the casual reader that one can’t trust anything anyone of any rank in the European Union says. Ever. But we mustn’t be sour about it. The idea to focus on here is getting rid of these clowns at the earliest opportunity.
Banks on Cyprus were ordered to stay closed for two further days to avoid an inevitable bank run, as the government delayed for the second day running a parliamentary vote on the terms agreed between eurozone officials and the International Monetary Fund last weekend…those very same terms those very same officials are now ‘urging’ the Cyrpriots to change. George Orwell eat your heart out.
If the deal were not to change, it’s clear the vote would be a knife-edge affair.
In the Cypriot Parliament there are a total of 56 seats, divided currently between the Anastasiades party (20), the Coalition Party DIKO (8), AKEL (19), EDEK (5), EUROKO (2), Greens (1) and Independent (1).
Sources claim that around 27 out of 28 opposition MPs are expected to vote No to the depositor haircut. The total Yes votes range is between 27 and 30.
In short, the vote could very easily go either way – and the Cyprus Central Bank is prepared for both eventualities. Cypriot media are reporting that the CCB has already secured 5 billion euros to address the expected withdrawals from the banking system…always assuming of course the banks do ever open again. (Lest we forget, that expected bank run is half the bailout cost. You really couldn’t invent this nonsense if you tried).
Throughout yesterday, commentators around the world were trying to analyse and understand what looked like a profoundly crazy move from Brussels-am-Berlin. But Slog sources and established facts in the public domain build a telling picture of what this panic may really be about:
* It is thought that the natural gas reserves in Cypriot territorial waters could be as much as 60 trillion cubic feet.
* A delegation from Russian energy giant Gazprom recently visited the Cyprus presidential palace to submit a proposal for a refinancing commitment from the Russian side – as in, the complete decoupling of Cyprus from the EU and the IMF – in return for access to industrial development land in Cyprus, and permission to construct a gas processing plant in Mari.
* Although Wolfgang Schäuble talks a great deal about the Cypriot economy having been “unsustainable” because of the low taxes offered to investors, the reality is that Cyprus banks only got into trouble because of over-exposure to Greek bonds, and PSIs 1 & 2 – that is, the collateral damage was inflicted upon Cyprus by the subordination decisions of Mario Draghi at the ECB. (Once again, The Slog asks, “Where is Mario Draghi?”)
* The Cyprus bailout haircut decision will destroy the two systemic banks, Bank of Cyprus and Laiki, and that in turn will destroy the Cypriot economy. One is left wondering who gains and who loses geopolitically from this: but there’s little doubt in my mind that this was a geopolitical move.
* As a valued Greek source puts it. ‘Cyprus is a tiny economy that has survived 60 years as Spy Central for the British, US, and NATO looking east, and Russia and Israel looking west. This is a deliberate decision to upset the strategic apple cart.”
* Bizarrely, last Friday President Vladimir Putin signed a government-sponsored law banning foreign banks from opening branches in Russia. We wonder if he will make an exception for German banks.
Yesterday, normally calm and serene Cypriots mob climbed atop the German Embassy in Cyprus, tore down the German flag and burnt it. So it’s all going rather well.
Good morning. The Cyprus bailout remains in the balance today as the government struggles to find support for its controversial bank deposit levy.
After Monday's cancellation, MPs are scheduled to vote on the package this afternoon - at 4pm GMT. But it isn't clear that president Nicos Anastasiades has enough support to get the deal passed.
The government's official spokesman, Christos Stylianides, has already warned this morning that the levy could be rejected.
Speaking on state radio early this morning, Stylianides said:
It looks like it won't pass.
Should the measure be defeated, then Cyprus would be plunged into an even deeper crisis - as the bailout deal agreed over the weekend would be effectively sunk.
As we reported in the blog last night, eurogroup ministers insisted that Cypriot savers should still yield €5.8bn towards the bailout, but that the Cypriot authorities will introduce "more progressivity in the one-off levy".
That fuelled hopes last night that deposit holders under €100,000 could be spared -- but there is no word from Cyprus, yet, on what it will do.
According to Reuters, Stylianides could hold talks with the German chancellor, Angela Merkel, and with Russian president Vladimir Putintoday.
Meanwhile, Cyprus's banks remain shut until Thursday, and we're expecting fresh protests outside the presidential palace today.
additional Guardian items.....
Russia: Cyprus banking system could collapse
The political tensions between Europe and Russia have escalated this morning, after the Russian envoy to the European Union suggested that Cyprus's banking system could collapse.
In rather blunt language for a diplomatic, Vladimir Chizhov described the bank levy as "similar to forceful expropriation". Speaking by video conference to reporters in Brussels, Chizhov went on to predict social unrest and bank runs in Cyprus, and perhaps beyond.
Chizhov said:
This decision is dangerous because of possible social repercussions in Cyprus and it is dangerous in terms of triggering possible domino effects in euro zone countries
And there is another threat. When the banks open, people will rush to withdraw their deposits - that's another threat - and then the whole banking system can collapse.
With impeccable timing, the EU is sending a delegation to Moscow later this week. Cyprus may not be on the official agenda, but the EU admitted today that Russia wants to discuss it:
Reuters: draft bill reaches Cyprus parliament
According to Reuters, the Cypriot government has now submitted a new draft bill to parliament that would scrap the controversial levy on bank deposits for amounts below €20,000 euros.
However, it does not appear to include higher rates for larger deposits. Which surely means a shortfall?
Here's the details:
The draft, seen by Reuters, sets a zero percent levy on deposits of up to 20,000 euros, a 6.75 percent rate for amounts between 20,000 and 100,000 euros and maintains a 9.9 percent tax on all deposits above that level.
Jeremy Cook, World Bank's chief economist, has quickly crunched the numbers and concluded that a higher rate of 12.5% for those with more than €500,000 in the bank would cover the shortfall.
France: we favour only taxing savings about €100,000
France's finance minister has urged Cyprus to drop its plan to tax people with less than €100,000 in their bank account.
Pierre Moscovici said France was in favour of only taxing deposits over €100,000 (which would not have been protected if a bank went bust), but insisted it was up to the country's government to decide.
However, Moscovici also ruled out lending Cyprus any more money directly, as the €10bn agreed on Saturday morning was the maximum it could be expected to repay.
Above 10 billion euros we are entering into a size of debt that is not sustainable.
That's the crux of the Cyprus crisis -- the country was ordered to find around €5.8bn from its savers, or collapse. President Anastasiadis, it appears, was unwilling to hit wealthy savers (including many Russians) with more than a 9.9% losses - which meant a 6.75% levy for everyone else.
With hardly any bondholders to hit (one of the quirks of the Cypriot system), the savers were straight in the firing line.
Fitch puts Cypriot banks on rating watch negative
Rating agency Fitch has put three Cyprus banks - Bank of Cyprus, Cyprus Popular Bank and Hellenic Bank - on Rating Watch Negative while the bailout drama plays out.
In a statement, Fitch said it took the move because of Cyprus's decision to tax savers (by turning a percentage of their deposits into equity). It also suggested that it could downgrade the banks to 'restricted default' if this occurs.
Fitch said:
The Negative Watches will be resolved after a decision by the Cypriot parliament on the above extraordinary measures, which could come as early as today.
The crystallisation of such significant losses on depositors would constitute a restricted default (RD) under Fitch's rating definitions, in which case the IDRs [individual default ratings] would be downgraded to 'RD'.
Cypriot Parliamentary maths
Cyprus's president, Nicos Anastasiades's party only holds 20 seats in the Nicosia parliament, out of 56.
His coalition partner, DIKO, has another eight -- but last night it declared that the savings levy was unacceptable as it stood.
Most opposition parties have already attacked the plan, including the Greens party (which holds just one seat) this morning
( First , a note alleged to give news Monday nite - if accurate the latest approach of Cyprus is that while tweaking the tax grand larceny scheme to avoid hitting those bank accounts holding 20 , 000 euros or less , the 6.75 levy applies between 20,000 - 100,000 euros , while tax capped at 9.9 percent for accounts over 100,000 euros - President Anastasiades still wants to keep the laundry business it would appear ... )
Anastasiades faces severe test to get majority in Cyprus deposit tax vote
Cypriot Parliament is due to convene on Tuesday afternoon to debate and vote on a controversial deposit tax, with President Nicos Anastasiades struggling to get the support he needs for the levy to be approved.
As of Monday night, it looked extremely doubtful whether Anastasiades would get the 29 votes he would need for a majority in the 56-seat Parliament.
His Democratic Rally party (DISY) has 20 seats and will rely on support from its coalition partner, the Democratic Party (DIKO), which has eight MPs and then at least one of the two European Party (EVROKO) deputies or an independent lawmakers to support the tax.
The Communist Party (AKEL), the Socialists (EDEK) and the Greens said they would reject the levy.
However, DIKO indicated on Monday that it would not support the tax, which foresees deposits over 100,000 euros being taxed at 9.9 percent and those under 100,000 facing a one-off levy of 6.75 percent. It referred to the Eurogroup’s decision to approve the measure as “catastrophic.”
“They take us for guinea pigs,” said DIKO president Marios Karoyian.
His party is reported to have sent specific demands in connection to the tax to Anastasiades. It has also sought assurances that the European Central Bank would step in to support Cypriot banks if they suffer from capital flight when they open on Thursday after an extended bank holiday.
It was not clear late Monday what effect a Eurogroup decision to allow Nicosia to tweak the tax would have on potential support in Parliament.
Cypriot state broadcaster RIK reported that Anastasiades was considering a revised plan that would ensure deposits under 20,000 euros would not be taxed at all. Those between 20,000 and 100,000 would continue to face a 6.75 percent tax. The levy on deposits above 100,000 euros would remain at 9.9 percent, according to the report.
( Eurogroup painting Anastasiades as the bad guy who wants to harm small savers in Cyprus as they tout their plan to hit bank accounts over 100,000 with a 15.6 percent whammy , while sparing accounts under 100,000 with grand larceny whack ! Meanwhile , with 2/3rds of deposits from abroad , Cyprus naturally fears that money from abroad will seek sanctuary elsewhere at the first opportunity to flee if unduly taxed. )
President Nicos Anastasiades is mobbed by reporters outside parliament yesterday (Christos Theodorides)
EUROZONE FINANCE ministers last night urged Cyprus to protect small savers’ deposits while still coming up with €5.8 billion from a deposit levy so the island’s €10 billion bailout could go ahead.
The Eurogroup appeared to show flexibility on the details of how Cyprus should implement the unprecedented haircut on bank deposits, following the blowback caused by its decision last Saturday to take 6.75 per cent from insured depositors with under €100,000 in a Cyprus-based bank, and 9.9 per cent from deposits over that amount.
The Cyprus deal sent shockwaves through financial markets yesterday, with shares, the euro and the bonds of southern eurozone countries sliding.
Uncertainty reigned as a Cypriot parliamentary vote on Saturday’s deal was postponed twice- from Sunday to Monday and then to Tuesday- with the government nowhere near certain of winning a majority vote.
The ongoing confusion led the Central Bank to announce yesterday that all banks will be closed today and tomorrow, likely in fear of a depositor’s bank run.
Ahead of a plenary session in the legislature, scheduled for 6pm today, the eurozone’s finance ministers held a teleconference call for one and a half hours last night to take a second look at their initial decision.
According to Reuters, the EU finance ministers said they favoured a higher, 15.6 percent hit for richer savers so more modest accounts could be spared.
Various reports suggest it was exactly this kind of deal that the Cypriot delegation in Brussels rejected at the weekend, fearing the destruction of their banking model which lures money from rich Russians and others.
It was not clear if Nicosia will accept it now but if it does, it would still need to raise €5.8 billion from the bank levy as planned, a Greek finance ministry source said, as well as get the levy passed through parliament.
“All Eurogroup ministers said (last night) they wished there was no tax below €100,000 but you can’t force a country to not do that,” the Greek source told Reuters.
“Cyprus doesn't want to impose a large tax above €100,000 because the money will flow out. Two thirds of deposits are from abroad,” he added.
Eurogroup President Jeroen Dijsselbloem released a statement after the teleconference recalling that the weekend’s controversial decision was the product of “consensus” between the Cypriot government and the Eurogroup”.
He reiterated that the stability levy on deposits is a “one-off measure” to restore the viability of the Cypriot banking system and safeguard financial stability in Cyprus, adding that without it, deposit holders would be “significantly worse off”.
“The Eurogroup continues to be of the view that small depositors should be treated differently from large depositors and reaffirms the importance of fully guaranteeing deposits below €100,000,” he said.
Dijsselbloem said the Cypriot authorities “will introduce more progressivity in the one-off levy compared to what was agreed” last Saturday, provided that it still raises the €5.8 billion demanded to release the €10bn rescue package.
The decision taken at the weekend in Brussels to raise €5.8 billion from Cypriot-held deposits across the board was widely viewed by foreign media and analysts as a bad decision that will lead to further uncertainty and undermine what little confidence there was in the eurozone and its banking system.
The Economist described the decision as “unfair, short-sighted and self-defeating”, while Forbes said the German-led group of EU officials who engineered the Cyprus bailout did a botch job after violating the principle pillar of modern banking- deposit insurance.
“If I were a saver, certainly in Spain or maybe Italy, I think I'd be looking askance at these measures and think this could yet happen to me,” said Peter Dixon, global financial economist at Commerzbank.
In Cyprus, the majority of people and parties were first in shock and then uproar, questioning why small Cyprus should be the first country in the eurozone to force a hit on depositors, and especially insured ones.
As the full effect of the initial decision hit home, EU leaders and banking officials appeared to show some flexibility on the details of a deal, while also trying to pass the buck on who’s decision it was to force losses on insured depositors.
“What happened at the weekend was a big buckle in confidence,” Austrian Finance Minister Maria Fekter told a panel discussion on the future on Europe yesterday.
She argued that the European Central Bank (ECB) and Cyprus rejected a sliding scale one-off tax on deposits going from 3.5 to 12.5 per cent, preferring instead to cap the levy at under 10 per cent.
“It is up to the government alone to decide if it wants to change the structure,” ECB policymaker Joerg Asmussen, who was pivotal in the weekend negotiations, told reporters in Berlin. “The important thing is that the financial contribution of €5.8 billion remains.”
President Nicos Anastasiades last night chaired a meeting at the Presidential Palace including Central Bank governor Panicos Demetriades, cabinet members and finance ministry officials.
It remains to be seen what deal the government will present parliament today and whether it can be passed. As for the long-term, Cyprus will just have to wait and see what the final impact of the last few days will be on its economy and future.
Mixed reports doing the rounds yesterday suggested various scenarios where, in one case, depositors with under €20,000 or €25,000 would be spared the levy, while in another scenario all insured depositors would be taxed 3 per cent, 10 per cent would be slapped on depositers with €100,000 to €500,000 and accounts exceeding €500,000 would see a 15 per cent levy.
The last scenario to be heard came after last night’s Eurogroup meeting, and it follows the view that insured depositors be spared while the remainder get a 15.6 per cent levy.
“Essentially parliament is called to legalise a decision to rob depositors blind, against every written and unwritten law,” said House Speaker and EDEK leader Yiannakis Omirou earlier in the day, adding, “We refuse to subscribe to this”.
CB governor Demetriades told parliament yesterday: “The most important question is what would happen the following day if the bill isn’t voted.”
He added: “What would certainly happen is that our two big banks would need to be consolidated. This doesn’t mean that they would be completely destroyed. We will aim for this to happen in a completely orderly way.”
Demetriades is reportedly against taxing insured depositors to raise the funds demanded by the troika as a precondition for the bailout, noting that this undermines trust in the banking system.
Earlier yesterday, Finance Minister Michalis Sarris commented on his role in the weekend’s shock decision. Sarris reminded MPs that the government adamantly against any haircut, adding that Cyprus had proposed taxation on interests for a three-year period, yielding an amount that would be close to the funds required, but the IMF and countries such as The Netherlands, Finland and Germany insisted on a levy on all deposits.
German Finance Minister Wolfgang Schaeuble deflected blame for the hit on small savers yesterday saying this solution “was not the creation of the German government”.
Schaeuble added that the Cypriot business model of attracting capital with low taxes and favourable legal regulation had proven to be unsustainable. But it had been “imperative in the interest of defending our common currency” to offer Cyprus aid.
The Presidential Palace yesterday categorically denied that Anastasiades ever had the choice of not taxing deposits under €100,000.
In a written statement, government spokesman Christos Stylianides said Anastasiades fought to avert this “unprecedented development” which “has been imposed in a coercive manner by those who try today to justify their own decisions”.
Their position was that by not taxing insured depositors Cyprus would not secure the necessary bailout sum, he added.
and the parties positioning prior to tuesday meetings , debate and perhaps the vote.... ) .....
Junior coaltion partners DIKO says it will not accept terms as they stand
A SIMPLE majority in the 56-member House of Representatives would be required for approval of the government bill on the deposits haircut, assuming the twice-postponed vote is held today.
However the numbers simply do not add up to a majority. Three parties AKEL (19 seats), EDEK (5) and the single-seat Greens decided on Sunday that they would vote against the haircut. This leaves President Anastasiadesrelying on his party DISY (20 seats) and his government’s coalition partner DIKO (8).
Even if he ensures that all DISY members would back the bill the support of the eight members of DIKO that would give the government a fighting chance of passing it, is far from certain. At least three DIKO deputies had indicated they would not back the bill.
Yesterday, another DIKO member, chairman of the House Finance Committee, Nicholas Papadopoulos, reportedly called for the rejection of the bill, the closure of the banks for a week and the re-negotiation of the deal reached at Friday’s Eurogroup meeting.
It is unclear in which direction the European Party, which has two seats, would go. Its leader Demetris Syllouris said he was opposed to the haircut after Saturday night’s meeting at the presidential palace, but appeared to have softened his stance since then.
Finally, there is one independent deputy, who is an unashamed populist and is unlikely to back the bill.
In the best case scenario the government would have 26 deputies backing its bill. Its only hope of passing it through the legislature is that at least five of the anti-haircut camp’s deputies would not attend today’s plenum.
There was no shortage of opposing voices yesterday. EVROKO deputy, Nicos Koutsou called on the public to resist the measures and to express their feelings, in a peaceful manner, outside the House today. He also said that the President’s address to the nation on Sunday did not offer-up anything new. “It confirmed that he operates as a conveyor belt bringing extortionate terms from ‘his friends’,” Koutsou said. He said Anastasiades was the number one ‘yes man’ in the Cypriot political system.
Greens MP, George Perdikis, said Cyprus required leadership that would resist the ‘fatal procedure’ which the country was being put through.
“I have come to the conclusion that beyond any doubt, our partners in Europe are untrustworthy,” he said.
"Essentially parliament is called to legalise a decision to rob depositors blind, against every written and unwritten law," said House President Yiannakis Omirou, who also heads EDEK,. “We refuse to subscribe to this."
Junior government partners, DIKO said the party could not support the proposed haircut bill as it stands. “DIKO considers the outcome of the Eurogroup decision as catastrophic for Cyprus and the Cypriot economy,” a party statement said.
The party has given President Nicos Anastasiades certain suggestion and set certain conditions for the acceptance of any deal, it added. The executive office will meet again today at noon to look over any possible changes to the proposal in order to make a final decision before the House Plenum.
DIKO leader Marios Garoyian, said Cyprus was being used as a guinea pig. “The European Central Bank, as well as everyone else, is trying to go about their business as best they can, as we are too in trying to protect the interests of our country,” he said. “We are in a state of emergency and we are required to take all the measures that we feel are essential, important and vital to protect our country’s interests,” he added.
Main opposition party AKEL, decided on Sunday that it would vote against any proposed haircut bill after a meeting of its central committee. The party has prepared an alternative solution that it will present to the President and the parliamentary parties it said.
Speaking to the Cyprus Mail yesterday, former Labour Minister and AKEL deputy, Sotiroulla Charalambous said that the party would vote against any haircut proposal regardless of any possible changes that could be made. “Our suggestion is that a solution is found without troika’s assistance,” she said.
Speaking after the central committee meeting, the party’s general secretary, Andros Kyprianou said: “The proposal will sink the economy even further into trouble as opposed to helping it recover, creating more potential problems,” he said.
and how quickly will the ATMs run out today with the banks closed until Thursday ?
BANKS will remain closed today and tomorrow, the Central Bank announcing yesterday that “March 19 and March 20 have been declared bank holidays.”
“We could not have opened, with the bill for the deposits levy still pending,” said a senior bank executive who added that nobody knew what the levy would eventually be. The angry reaction, caused by the bail-in of small depositors had forced the government to re-consider how the haircut would be applied.
On Sunday night the Central Bank had informed commercial banks that the levy percentages had changed. For deposits up to €100,000 the levy would be 3 per cent, between €100,000 and €500,000 10 per cent and above €500,000 12.5 per cent.
At yesterday morning’s House Finance Committee meeting, the Governor of the Central Bank Panicos Demetriades suggested that there should be no levy on deposits of up to €100,000, but he could not say what percentages would have to be cut from bigger deposits to make up the €5.8 billion that had to be raised from the hair-cut.
In spite of the banks being closed, ATMs will be stocked up with cash for people wanting to make withdrawals. Banks had to re-supply the machines with euro-notes several times over the long weekend, especially after the announcement of the bail-in early on Saturday morning.
“ATMs usually run out of money on Monday evening when it is a long weekend, but last Saturday they ran out by 8.30 in the morning,” said the bank executive. There were instructions from the Central Bank to keep re-supplying the ATMs, but by Monday most branches had no more money and had to ask for extra cash from the Central Bank.
In an announcement issued yesterday, the Association of Cyprus Banks said that “in cooperation with the Central Bank of Cyprus, banks are making every effort to ensure that the increased needs of cash among the public will be continuously satisfied through the ATMs.”
Meanwhile, the banks have been trying to agree a uniform policy for dealing with customers once the banks finally open to the public. Although there has been no agreement, the maximum amount of same-day cash withdrawal is expected to be €10,000. Sums up to €200,000 would be available the next day.
No uniform policy has been agreed on how to deal with customers wanting to cash fixed-term deposits. Breaking a fixed-term deposit is at the discretion of the bank which usually imposes a hefty fine when it is cashed, but it is unlikely banks would be very obliging when such a request is made.
The biggest concern of the banks, once they open their doors to the public, is security. There are fears that they may have to deal with angry crowds entering branches and will have security staff stationed outside the big branches to control the number of people allowed in at any time. Security guards would also be patrolling branches.
Submitted by Tyler Durden on 03/19/2013 08:44 -0400
The Crisis Republic 
