The view from 20,000 feet - Nigel Farage and Daniel Hannan - they have been consistently delivering a message against the Elite Eurocentric maniacs in Brussels - their words today are on point...... And being Euro-skeptical doesn't make one wrong !
http://www.zerohedge.com/news/2013-03-19/nigel-farage-message-europeans-get-your-money-out-while-you-can
In Nigel Farage's first TV appearance since the Cypriot wealth tax was announced, the Englishman pulls no punches. In all his years and all his experience of the desperation of the European Union's leadership "never did [he] think they would resort to stealing money from people's savings accounts." The simple fact is that they know they cannot let any country leave, no matter how small, for "once one country goes, the whole deck of cards will come tumbling down." There is now "clear irreconcilable differences" between the North and the South of Europe and now that they have done this in one country, "they are quite capable of doing it in Italy, Spain and anywhere." The message that sends to people is "get your money out while you can." As far as his British constituents, he strongly recommends George Osborne (UK Chancellor) urge ex-pats to remove all their money and do monthly transfers from home. "Do Not Invest In The Euro-Zone," he concludes,"you have to be mad to do so - as it is now run by people who do not respect democracy, the rule of law, or the basic principles upon which Western civilization is based."
"They are propping up a Eurozone that, in the end, will collapse in disastrous failure and they are prepared to do anything to do so."
5 minutes of reality from a European MP - must watch...
and......
http://www.zerohedge.com/news/2013-03-19/daniel-hannan-urges-cyprus-default-devalue-and-decouple-itself-back-growth
Daniel Hannan Urges Cyprus To "Default, Devalue, And Decouple" Itself Back To Growth
"Either Cyprus is going to have to find the money to fund the bailout, or it's going to have to leave the Euro - to default, devalue, and decouple," is the cold hard truth that UK MEP Daniel Hannan explains in this brief clip. Neither of these paths, he goes on to say, is an easy one, but he believes "there is no doubt the second of them is the less painful - allowing Cyprus to price itself back into the market and start exporting its way back to growth again."
There are no good outcomes for a country as indebted as Cyprus is, "but if I were a Cypriot member of Parliament, I would vote now to go back to an independent currency as the least painful of the various difficult options." Hannan then makes a fantastic point, "in the rest of Europe, we have measured the cost of monetary union in unemployment, deflation, poverty, and emigration; in Cyprus that wasn't enough, they have had to gouge the savers directly," and so the Cypriots who claim to want to stay in the Euro can now quantify the cost of that shackle, as he reminds us that , "you don't have to be a Russian oligarch to have EUR 100,000 in the bank," as he concludes, "the really interesting question is - who's next?"
Now that the precedent has been set (that governments can come after what is in your savings account) what country is safe?
The news pertaining to Cyprus has been tidal wavish - in proportion and significance.... let's hit the high points so far ..... First the set up for the vote , the vote itself and the immediate actions / statements thereafter....
FURY erupted yesterday as it emerged that rich Russians withdrew £2billion BEFORE a tax raid on bank savings in Cyprus was announced.
The revelation came as Eurozone ministers proposed a plan to protect investors with under 100,000 euros (£85,700).
But British troops on the Mediterranean island were left fearing they may still lose out as the UK Government watered down a guarantee to safeguard their cash.
An earlier scheme to grab 6.75 per cent of smaller savings would see an estimated 60,000 British ex-pats — with £1.7billion in Cypriot banks — potentially losing thousands.
The controversial one-off tax was announced on Saturday as part of a 10billion euro bailout.
But Russian oligarchs and big investors emptied accounts in the days beforehand, prompting claims they were tipped off by bank insiders. A source told The Sun: “It leaked out. Bankers warned their best clients. Government officials warned their friends and relatives.
“Billions disappeared from accounts in days, most from accounts held by Russians.”
Russians are by far the biggest overseas investors in Cyprus, with a stake estimated at 20billion euros. There are accusations criminals use the island for money-laundering. Russian president Vladimir Putin yesterday called the tax “unfair and dangerous”.
A vote on the levy was postponed as hundreds of protesters gathered at the parliament building in Nicosia.
There was anger too in the House of Commons as it emerged that the 3,250 British troops and civilian staff in Cyprus will not all be fully protected. The MoD admitted they will only be covered for “reasonable losses” and each case will be decided on its merits “rather than automatic, blanket coverage”. Shadow armed forces minister Kevan Jones said: “It is absolutely vital that no member of our Armed Forces is out of pocket."
The crisis fuelled fears of a run on banks in other troubled Eurozone economies such as Spain and Ireland.
Cyprus Finance Minister Resigns, President Refuses To Accept Resignation
Update: President Anastasiades rejects FinMin Sarris' resignation. Unclear what happens next.
Things just took a turn for the much worse following this news from Market News:
- CYPRUS FINANCE MINISTER SUBMITS RESIGNATION - SOURCES
- MARKET NEWS CITES SOURCES ON CYPRUS FINANCE MINISTER
Unclear if German FinMin Schauble will promptly step in to fill this latest sovereign vacancy.
Desperation time for the NY Fed to preserve the market green and give the impression that all is under control, when the rats are now actively leaving the Titanic.
http://www.zerohedge.com/news/2013-03-19/germany-enters-grace-bull-liquidating-cyprus-china-shop
Germany Enters With The Grace Of A Bull In An Liquidating Cyprus China Shop
When you have a few good bureaucratic central planners preserving a broke monetary regime, what can possibly go wrong? Perhaps headlines such as these:
- Senior German Official - No Idea When Or If Cypriot Parliament Will Vote On Proposed Bailout Programme
- Senior German Official - Situation In Cyprus Is Bad, Reasons For This Lie In Cyprus
- Senior German Official - With No Programme, Liquidity To Cypriot Banks Is In Danger And They Cannot Open
And then Schrodinger Schauble himself:
- SCHAEUBLE SAID TO TELL LAWMAKERS FEELS SORRY FOR CYPRIOT PEOPLE
- SCHAEUBLE SAID TO SAY CYPRUS LONG HAD WRONG BUSINESS MODEL
Wait, being a participant in a monetary cul-de-sac, whose eventual end leads to a very painful and often times lethal, hyperinflationary outcome, is a wrong business model? Who could have known. Naturally, with well-wishers like these, who needs bond vigilantes?
http://www.zerohedge.com/news/2013-03-19/cyprus-now-set-vote-against-bailout-ruling-party-abstain-guaranteeing-failure-ratify
Cyprus Now Set To Vote Against Bailout, Ruling Party To Abstain Guaranteeing Failure To Ratify "Bail-In"
It appears that Cyprus is now ready to escalate, following news now coming fast and furious, that the Parliament will go ahead and vote after all, but not in a good way as even the Cypriot ruling party, formerly the only party willing to vote Yes on the Bail-In, would abstain according to Dow Jones, which means there is no support at all in the Cypriot parliament for the deposit haircut proposal.
We can only pray that Bob Pisani explains what happens next because neither we, nor anyone else, has any idea what comes now.
http://www.zerohedge.com/news/2013-03-19/cyprus-parliament-rejects-european-bailout-proposal-36-voting-against-19-abstain
Cyprus Parliament Rejects European Bailout Proposal: Calls Germany's Bluff
Just as we predicted yesterday, the Cyprus bailout vote has not passed parliament in a move that was merely there to force Germany's bluff.
- CYPRUS BANK LEVY BILL DEFEATED WITH 36 VOTES AGAINST
- CYPRUS BANK LEVY BILL DEFEATED WITH 19 ABSTENTIONS
- CYPRUS PARLIAMENT VOTED IN SHOW OF HANDS IN NICOSIA
- ANASTASIADES FAILS TO SECURE VOTES FOR DEPOSIT LOSS BILL
What happens now, nobody knows. Prepare for a litany of very angry headlines out of the inner sanctum of Europe's despotic chambers. Hopefully Pisani can explain it all.
http://www.zerohedge.com/news/2013-03-19/ecb-responds-cyprus-says-will-provide-liquidity-cyprus-within-existing-rules
ECB Responds To Cyprus, Says "Will Provide Liquidity To Cyprus Within Existing Rules"
We were waiting for the ECB response, and seconds ago we got it, when the ECB uttered the magic words, saying it would provide"liquidity within existing rules." What this means is unclear, but the algos loved it and sent the EURUSD up over 50 pips higher in milliseconds. What the algos apparently don't get is that this does not account for the additional liquidity needed that would only be released if Cyprus passed the bailout vote. The last thing the ECB wants is to appear weak, and fold letting every other broke deadbeat country to demand the same equitable treatment and diluting Germany's political might. For now however, the is a move to be faded.
This is not news as the ELA was always there... and the market realized that as soon as ES hit VWAP... fading now...
http://www.zerohedge.com/news/2013-03-19/european-funding-pressures-spike-most-14-months
European Funding Pressures Spike Most In 14 Months
One of the most important indicators of stress in the financial markets of Europe during the heady days of the crisis was the EUR-USD basis swap. Simply put it is an indication of the trouble that European banks are having funding themselves. Thank to the LTRO and a wash from the ECB, it has been largely off the radar for most media types. However, we note that today the 1Y EUR-USD basis swap smashed lower (more stressed) by the most since December 2011 and is at its most stressed since November. It seems trouble, no matter how much Draghi promises, is not too far under the surface...
The Annotated Schaeuble Cyprus Post-Mortem
Confused by the litany of threats, palliatives, urgings, promises and outright lies just uttered by the German's finmin wheelchair maestro? Fear not for we are here to explain it all:
- SCHAEUBLE SAYS IT'S A "SERIOUS SITUATION" - Which as Juncker told us, means "you have to lie."
- SCHAEUBLE SAYS GERMANY REGRETS CYPRUS DECISION - Cyprus regrets the German regret
- SCHAEUBLE SAYS CYPRUS WILL GET NO MONEY IF THEY DONT ACCEPT OUR OFFERS - Unless Russia and China submit their own better "offers"
- SCHAEUBLE SAYS CREDITORS HAVE TO BE INVOLVED WHEN THERE IS AN INSOLVENCY - They usually are, and usually end up with nothing or just more than nothing
- SCHAEUBLE SAYS NO ONE EXCEPT CYPRUS IS TO BLAME FOR ITS CURRENT SITUATION - Likewise for its creditors
- SCHAEUBLE SAYS CYPRUS GOVT THINKS WITH ITS DECISION IT CAN ATTRACT LARGE INVESTORS TO CYPRUS IN FUTURE - Russia is happy that Germany thinks it is large
- SCHAEUBLE SAYS CYPRUS'S "BUSINESS MODEL" DOESN'T WORK ANY MORE, RATINGS AGENCY HAVE DOWNGRADED TO JUNK LEVEL - Italy and Spain's business models are therefore about to break next
- SCHAEUBLE SAYS 2 LARGE CYPRUS BANKS ARE ESSENTIALLY INSOLVENT WITHOUT HELP - All large banks are insolvent without help
- SCHAEUBLE SAYS HE THINKS CYPRUS MUST ACT QUICKLY, THERE ISN'T ENOUGH TIME TO WAIT UNTIL JUNE - And certainly not until September when the German elections are
- SCHAEUBLE SAYS EURO ZONE IS MUCH MORE STABLE THAN PREVIOUSLY - sell first bullet
Okay , but what really comes next ?
Next: Capital Controls
As is painfully clear to even the most naive observer, the biggest threat for Europe from this point on, now that Cyprus is officially "unfixed" is what happens when... if the Cyprus banks reopen - will the deluge of bank withdrawals drain 10% of the savings as the country's central banker warned earlier today, 20%, 50% or all of it? It is certain that any and all foreign "oligarch" accounts will be promptly pulled never to be heard of again, and after being treated like third grade European citizens, we doubt the locals will care much for having their cash in a banking system that Europe has shown is equal to all the other "united" banking systems, which however also happen to be just that much more equal. And once foreign TV crews show lines of people scrambling to pull money in Cyprus to the local viewers in Greece, Italy and Spain, will those countries also get comparable ideas? That is precisely the Pandora's box that Europe has now opened, and which it is scrambling to close. How? With the dreaded "contingency plans", among which are such last ditch efforts as capital controls, including "imposing limits on daily withdrawals from bank accounts; capping the amount of money that can be electronically taken out of the country and making these transactions slower to clear; and introducing border checks to cap the amount of cash leaving in the country," most recently utilized in the banana-est of republics such as Argentina.
The contingency measures, described by three European officials, may not need to be implemented if the deposit outflow looks containable. But the plan includes imposing limits on daily withdrawals from bank accounts; capping the amount of money that can be electronically taken out of the country and making these transactions slower to clear; and introducing border checks to cap the amount of cash leaving in the country.One official also said the IMF had been tasked with developing a plan to merge the country's two biggest banks—Laiki Bank and Bank of Cyprus—putting their healthy assets into a smaller entity and the nonperforming assets into a "bad bank," which wouldn't do any new business.A spokeswoman for the IMF had no immediate comment. European officials have repeated that the goal is to shrink the island's banking sector over time.After the Saturday morning meeting where finance ministers presented the bank-deposit tax plan, Jörg Asmussen, the German member of the ECB's executive board, said the Cypriot central bank and treasury have "prepared a contingency action plan, they are monitoring deposit flows, even on an intra-daily basis and will take the necessary actions if appropriate."The officials said neighboring countries had been instructed to be on the ready to fly euro bank notes into Cyprus should the need arise, but one official said this hadn't yet happened.
In a sign that even worse is to come, is the use of the most dreaded comparison in modernity: Cyprus is now Greece:
He said the ministry was "proactively approaching personnel to ask if they want their March and future months' salaries paid into U.K. bank accounts, rather than Cypriot accounts."The officials said such planning shouldn't be a surprise."This is exactly what is to be expected and exactly what was in place for Greece last summer," one official said, referring to the critical Greek elections in June 2012, during which depositors were removing large sums of cash out of Greek banks, spooked by the prospect of a euro exit.Spokesmen for the European Commission and the ECB declined to comment on the contingency plans. ECB officials have said it is a matter for the Cyprus government. A spokeswoman for the Central Bank of Cyprus didn't respond to calls for comment.
All that said, please don't worry: Cyprus is small and thus meaningless, the benign despots of the Europas say it is a "very special case", Europe is solvent, its banks are overflowing with cash and Spiderman towels, all people in Europe are equal but those who share bank vaults with Russian billionaires in places like Cyprus, or Switzerland, are less equal than others, and general there is nothing to be afraid of: because if bank runs haven't started by now, they certainly never will. Ever. Promise.
Remember - Europe is fixed: every European politician has already said so. Twice.
http://www.guardian.co.uk/business/2013/mar/19/eurozone-crisis-cyprus-bailout-government-vote
The possibility of the printing machines being dusted off for the (re-)introduction of the Cypriot pound has been mooted by Marios Mavrides, a Cypriot government MP who was talking to BBC 2's Newsnight in the last twenty minutes.
He said that the government are exploring various options to come up with a solution that would mitigate against a bank run when the banks open again.
Here's one of his last quotes:
If we cannot come up the €5.8bn in a few days then I think we will go to the Cyprus pound. That will be the end of Cyprus in the Eurozone.
A contingency plan to introduce capital controls in Cyprus is being discussed by authorities on the island and European officials, according to the Wall St Journal:
The plan includes imposing limits on daily withdrawals from bank accounts; capping the amount of money that can be electronically taken out of the country and making these transactions slower to clear; and introducing border checks to cap the amount of cash leaving in the country.
You can read a comprehensive piece on today's dramatic developments in Cyprus now by Angelique Chrisafis, who is in Nicosia, and Jill Treanor, the Guardian's City Editor, here.
A snatch:
The Cypriot parliament has thrown out a controversial plan to skim €5.8bn from savers' bank accounts, in a move that risks plunging the eurozone into a fresh crisis and heightens expectations that the cash-strapped nation will seek a funding lifeline from Russia.Cyprus has just 24 hours to find a solution to its funding gap before its banks are due to reopen following the dramatic no vote on Tuesday night, which failed to support a hastily renegotiated change to the original deal.
Just to recap:
The 56-member Cypriot parliament rejected the bank tax by 36 votes with 19 abstentions (one MP was absent) even after the proposal had been tweaked during the day to remove any levy on savings below €20,000.Accounts holding €20,000 to €100,000 still faced a 6.75% levy, and any account with more than €100,000 a tax of 9.9%, despite calls by Cyprus's eurozone partners not to tax accounts below €100,000 – the level at which a European Union-wide guarantee kicks in if an EU bank goes bust.
http://www.zerohedge.com/news/2013-03-19/what-does-no-vote-mean-cyprus-and-eurozone
What Does A 'No' Vote Mean For Cyprus And The Eurozone?
All at sea – what does the 'No' vote mean for Cyprus and the eurozone?
19 Mar 2013
The Cypriot parliament tonight voted against a bill to introduce a tax on bank deposits, in return for a €10bn bailout offered to the country by Germany and other eurozone governments. Not a single Cypriot MP voted for the deal. The structure of the tax in the bill is shown in the table below. The vote leaves Cyprus’ place in the eurozone hanging in the balance and threatens the escalation of the crisis to a new level, though the most likely outcome is that the Cypriot parliament votes a second time, on a revised deal.
Results of the vote
The governing party (DISY) abstained (with one member absent), while the junior coalition partner (DIKO) voted against – this signifies the huge political divisions at work in Cyprus. Even if a bailout deal is eventually approved the government’s position continues to look untenable.
What does the vote against the deposit levy mean?
As we have noted before, this has the potential to be a very serious twist in the eurozone crisis. Previously, Germany and the eurozone have stressed that Cyprus has no alternatives to the deposit levy. Now, all eurozone partners are forced back into difficult negotiations.
What timeline are Cyprus and the eurozone working on?
Cyprus will run out of cash on 3 June, when it has to repay a €1.4bn international bond. However, the decision will need to be taken long before that. Cypriot banks cannot stay closed for long but they cannot be reopened until a decision is taken, otherwise there will almost certainly be a deposit run. While people can reportedly withdraw up to €700 per day from ATMs, businesses, large and small, cannot function without banks being open. We would expect some decision would need to be taken by early next week before the lack of liquidity and lack of economic activity begins to severely harm the Cypriot economy.
What are the possible outcomes?
Both sides have some serious decisions to make. Below we outline the potential scenarios (as highlighted here):
1. Cyprus votes again and approves a revised tax: The governing party pushed for the vote to be delayed and hence abstained. This may be seen as delegitimising the result, not least because they hold 36% of the seats in the Cypriot parliament. The deal could see a few small tweaks along with some additional cash (either from the eurozone or Russia – see below), which would then be put to another vote in parliament – after all, being asked to vote twice is a common practice in the EU. But such a decision and vote must come quickly. In addition to running out of government cash, banks would have to remain closed during the interim period, meaning businesses and the wider economy could not practically function. The vote would therefore have to take place by the start of next week to avoid another escalation of the crisis. In our view, this remains the most likely option (possibly in combination with part of option 2).
2. The eurozone blinks: With the possibility of a country exiting the eurozone becoming very real and the “irreversibility” of the single currency coming under direct threat the eurozone may present Cyprus with a more palatable deal. After all the cash in question – €5.8bn – is only 0.06% of eurozone GDP. The real issue will be how to provide this cash while keeping Cypriot debt sustainable.
Options include:
- providing the full €17bn loan but with very long maturity and low rates;
- linking the repayment of the loan to future gas revenues;
- using the ESM or another vehicle to recapitalise banks directly;
- restructuring domestic bonds to extend maturity;
- accepting losses on some of the official loans.
None of these is perfect but if push came to shove, one or several could be moulded to make the deal look viable – at least on paper.
The main issue here remains political. It would be very tricky to push any increased bailout / relaxed conditions through the German, Finnish and Dutch parliaments, who don’t want to be seen to prop up a bloated Cypriot financial sector dominated by Russian interests. After all that is partly why we got here in the first place. Such a deal would be also reliant on the ECB agreeing to continue providing liquidity to Cypriot banks.
3. Cyprus looks to ‘other plans’ (i.e. Russia): Cypriot President Nicos Anastasiades suggested that Cyprus is considering “other plans” in case the parliament voted down the deposit levy and no new bailout deal was forthcoming. As of now, it is not clear exactly what these plans are, however, it is a decent bet that many, if not all, involve Russia in some way.
Cypriot Finance Minister Michalis Sarris will be in Moscow tomorrow to discuss the situation with his Russian counterpart. As we have argued before, Russia has significant self interest in helping Cyprus out – it could reduce the losses for the reported €20bn in Russian deposits held in Cyprus, it could gain favourable terms for future contracts on gas exploration in Cyprus (and therefore the future revenues) and it could also improve its geopolitical foothold in the region (as we have highlighted before, there is speculation that Russia has previously sought to move its naval base from Tartus, Syria to Cyprus).
Russia may therefore step up and provide additional financing, potentially to cover the circa €2bn which may have come from Russian depositors under the tax. Reports have also suggested that Sarris may propose a 20% tax on Russian deposits in Cyprus in exchange for a stake in a future Cypriot national gas company and board positions at Cypriot banks.
However, the EU will not want to see one of its members become so closely intertwined with Russia, so could actually strengthen Cyprus bargaining chip.
4. Cyprus exits the eurozone: No compromise can be found under any of the scenarios above (at least not within the necessary timeline – see above). With the largest Cypriot banks going without a recapitalisation, the ECB could be forced to follow through on its threat to withdraw liquidity from Cypriot banks – not just to reduce its risk exposure but also to ensure its threat of action remains credible to the rest of the eurozone and financial markets. If so, the ECB Governing Council would also probably promptly vote (a 2/3 majority is needed) to turn off the Emergency Liquidity Assistance to Cyprus leaving the banks illiquid and insolvent.
This combined with the previous threat of a deposit tax would likely lead to a deposit run on the banks and their likely collapse. In the face of all this, without an ECB or eurozone backstop, Cyprus would find it impossible to bail out its banks or support the guarantee of deposits – it would be forced to exit the eurozone and print its own currency.
The logistics are messy, but as we suggestedwith respect to Greece, some use of Article 50 in the EU Treaty to exit the EU would be the most likely option.
The new Cypriot currency would have little international trust, particularly in financial markets – not least because it would have just defaulted on a significant amount of its debt, particularly foreign-held debt. This would be worsened by the Cypriot Central Bank having to print massive amounts of liquidity to keep the banks afloat and backstop deposits. It would likely also have to monetise the government deficit, which is due to be 4.5% of GDP this year, or Cyprus would have to enforce massive austerity. In any case, this scenario has all the hallmarks of an inflation spiral and collapsing GDP.
This could be combined with option 3 to some extent. Russia could offer Cyprus a significant bailout, particularly of the banking sector. Alternatively some currency link could be envisaged. In either case this would help increase trust in the new currency and the Cypriot economy.
Would the ECB really pull the plug on liquidity to Cypriot banks?
The key turning point here will be whether the ECB cuts off Cypriot banks. It is to some extent the vital difference between option 2 and 4, while keeping liquidity on could help facilitate option 1. To pull the plug on ELA the ECB needs a 2/3 majority (15 out of 23 votes) at the ECB Governing Council. Although the Bundesbank and maybe the Dutch and Finnish central banks might vote to turn off the ELA a 2/3 majority is not certain. In fact since Mario Draghi took over the ECB it has not been particularly hawkish. Bloomberg reports that the ECB said after the vote: “The ECB reaffirms its commitment to provide liquidity as needed within the existing rules”. The crisis has shown so far that the rules of the ECB are incredibly malleable, so what exactly that statement means is unclear, but the vote could certainly go either way.
Or is Plan B viable - aka Russia ? Would the West , Israel and the Troika allow Plan B ? Maybe Cyprus should have taken the " bird in the hand " Gazprom offer before the vote fell as it did ?
http://www.zerohedge.com/news/2013-03-19/europes-final-gambit-20-30-haircut-oligarchs-force-russian-bailout
Europe's Final Gambit: 20%-30% Haircut For Oligarchs To Force A Russian Bailout
It now seems sure that the ongoing discussion in Cyprus' government will see a "no" vote as the WSJ is reporting a rather stunning gamble by the Cypriots (and by Cypriots we mean European leaders) to force the Russians to bear the brunt of the cost of the bailout. The non-resigned Cypriot FinMin is heading to Russia to propose a deal that includes imposing a 20% to 30% levy on Russian-held deposits in Cypriot banks, which could cost them billions of euros. In exchange, Russia will be given equity in Cyprus's future national gas company and some additional strategic benefits in the sector, while Russian investors would be given control of the board of directors at Cyprus's banks. The apparent quid pro quoin this deal does nothing to hide the fact that private property was stolen and while pointing fingers just at the Russians may play well for PR purposes, it is described as "a long shot" as the Kremlin notes, "it's practically impossible to talk without knowing details."
...The official said that Michalis Sarris, who is being accompanied by a delegation of businessmen, is going to propose a deal that includes imposing a 20% to 30% levy on Russian-held deposits in Cypriot banks, which could cost them billions of euros. In exchange, Russia will be given equity in Cyprus's future national gas companyand some additional strategic benefits in the sector, while Russian investors would be givencontrol of the board of directors at Cyprus's banks....However, the deal looks like a long shot. Ahead of the visit, Kremlin spokesman Dmitry Peskov said: "It's practically impossible to talk without knowing the details.""The situation is very difficult--unprecedented--and we don't understand what's happening," he said. Mr. Putin hasn't spoken to his Cypriot counterpart, he added."We don't know about the visit [on Wednesday] because we have information that the [Cypriot] finance minister has offered his resignation. Since we don't know if Cyprus has a finance minister, we can't comment on proposals that he might make," he said....Mr. Anastasiades hinted that the government is already working on a plan B. "We have our own plans," he said.
While we wait to see what Wednesday brings - what want be coming are Cyprus banks opening their doors on Wednesday , Thursday - maybe not until next Tuesday ! And wha manner of capital controls are coming ?
http://globaleconomicanalysis.blogspot.com/2013/03/not-me-capital-controls-placed-banks.html
Tuesday, March 19, 2013 5:56 PM
"Not Me!"; Capital Controls Placed, Banks Closed Until Tuesday; What's the Best That Can Happen?
Banks Closed Until Tuesday
I will gladly pay you Tuesday for a hamburger today seems to be the message from this tweet from DJ FX Trader "Cyprus Banks Could Stay Closed Until Tuesday March 26".
Capital Controls
Bloomberg confirms in a story EU Said to Discuss Cyprus Capital Controls, Longer Bank Holiday
I will gladly pay you Tuesday for a hamburger today seems to be the message from this tweet from DJ FX Trader "Cyprus Banks Could Stay Closed Until Tuesday March 26".
Capital Controls
Bloomberg confirms in a story EU Said to Discuss Cyprus Capital Controls, Longer Bank Holiday
European policy makers are in Cyprus discussing further capital controls and the extension of a bank holiday through to the end of the week, said a European official familiar with the talks. No decisions have been made yet, said the person, who spoke on condition of anonymity because the discussions are confidential."Not Me!"
In the meantime, the Cyprus Bailout Blame Game is well underway. No one wants to be the object of "The Big Point".
- Not me says German finance minister Wolfgang Schäuble.
- Not me says Jörg Asmussen, the ECB executive board member who handled the central bank’s negotiations Friday night. Jörg pointed the finger at "negotiations in Brussels"
- Not me says Pierre Moscovici, the French finance minister who claimed to be against the idea "from the beginning".
- Olli Rehn, the EU's economic chief may become the object of the "big point". Rehn put on the table a plan for a "relatively benign" levy on smaller savers: 3 per cent for all deposits under €100,000.
- One unnamed attendant says Ramon Fernandez, the French treasury chief is to blame. "The rest did not care".
- Another unnamed person pointed a finger Jereon Dijsselbloem, the Dutch finance minister who chaired the meeting.
- When Rehn and Anastasiades met in the early morning hours in a small group with Schäuble; Moscovici; Asmussen; Dijsselbloem; and Christine Lagarde, the IMF managing director, Schäuble was unwilling to play ball. He wanted to move forward with a full bail-in, and had the backing of Finland and Slovakia. A counter-proposal was put on the table by Dijsselbloem that would have seen the rate on smaller deposits hit 7.5 per cent, while those over €100,000 would face a 12.5 per cent cut.
- Rehn had hoped that after setting the top rate at 9.9 per cent, there would be some wiggle room to get the rate on smaller depositors down to a more moderate level by finding cash from tools used in other bailouts, like more garden-variety taxes. But the IMF and Germany wouldn’t budge.
Who's to Blame?
Every damn one of them actually. The eurozone was fatally flawed from the beginning. The ECB's interest rate policy of "One Size Fits Germany" fueled the crisis.
There should not have been any deposit insurance, and the ECB should not have insisted Greece would never default (and it was Cypriot banks that were left holding the bag when Greece did default).
Best That Can Happen
The best thing for all involved would be for this to blow up in the EU's face, for Cyprus to exit the eurozone, and for Russia to quickly pick up the pieces so that everyone can see a eurozone exit is not the end of the world, for anyone.
and the Germans will kindly help those in need - of moving their monies for a nice fat fee .....
http://www.zerohedge.com/news/2013-03-19/german-bankers-generously-offer-cypriots-helping-hand-if-they-transfer-deposits
German Bankers Generously Offer Cypriots Helping Hand If They Transfer Deposits
For a mere 0.95% handling fee, the friendly German bankers are offering Cypriot depositors the opportunity to "take fast action and secure their deposits" with a rate between 3.0 and 4.5%. As Sigma Live reports, the German Advisory Bureau is approaching Cypriot firms, denouncing the incident and asking them to take responsible actions. While it would be a stretch perhaps to wonder if the plan all along was to strengthen German banks, it is of little doubt that depositors will be quick to move any and every bill of Euros in their bank accounts as soon as their government allows.
And plane loads of cash being flown in by the UK to help troops when the banks stay frozen........... but what about UK Government workers and British citizens living in Cyprus ?
http://www.zerohedge.com/news/2013-03-19/uk-sends-planeload-cash-its-cyprus-troops-contingency-measure
UK Sends Planeload Of Cash To Its Cyprus Troops As A "Contingency Measure"
We are presenting this Reuters story without any comment. None is necessary.
Britain said on Tuesday it had sent one million euros ($1.30 million) in cash to Cyprus aboard a military plane for its troops on the island in case cash machines and debit cards stop working."An RAF flight left for Cyprus this afternoon with €1M on board as a contingency measure to provide military personnel and their families with emergency loans in the event that cash machines and debit cards stop working completely," the Ministry of Defence said in a statement.
And some more from Sky:
Soldiers stationed on the island and their families would be able to borrow the money if cash machines and debit cards stop working completely, the Ministry of Defence said."The MoD is proactively approaching personnel to ask if they want their March, and future months' salaries paid into UK bank accounts, rather than Cypriot accounts," it said in a statement."We're determined to do everything we can to minimise the impact of the Cyprus banking crisis on our people."Around 2,500 to 3,000 British military personnel are currently stationed in Cyprus.Chancellor George Osborne has already pledged that military personnel and civil servants would be protected from the levy, telling Cabinet they would be "compensated in full" for any losses.Cyprus' finance minister Michael Sarris, meanwhile, has reportedly offered his resignation and the ruling party is said to considering abstaining from the vote.Some local media have reported that no party will take part.Reporting from outside parliament, Sky's Ashish Joshi said: "The situation here is deteriorating quite rapidly.
View from the Greek and Cypriot street......
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