Buchheit/Gulati: “Walking Back from Cyprus”

Unequivocal mea culpas and perhaps (shock) resignations are required to signal sincerity.

Schäuble out, Lagarde out , Rehn out , Dijsselbloem out?

Not sure where Weidman was in all of this, but I’m pretty sure that Draghi wasn’t, which may be a resigning matter in and of itself in his case.

A quick read of this suggests to me that the authors are confusing liquidity with solvency.

In terms of liquidity, the game is up, there won’t be a red (pardon the pun) cent left on deposit after this, the ECB has already stated that it is standing by as lender of last resort.

Forcing depositors to keep their deposits for longer is not a solvency panacea. Genuine losses are needed here.

I wonder is there already a secondary market in deposits in Cypriot banks? If that money is as hot as it is supposed to be, some people must already want out.

that 1.4billion ‘bond’ Lee references is now trading low 80’s go figure…

“Hitting €1.7bn of senior bank debt – which would have been an unprecedented move – was also deemed to have carried greater contagion risks.
Therefore, Cyprus has little option other than to hit depositors.”

http://www.ifre.com/hedge-funds-to-reap-rewards-on-cyprus-default-bet/21075338.article

From Le Figaro, Draghi threatens.

http://www.lefigaro.fr/conjoncture/2013/03/20/20002-20130320ARTFIG00468-l-europe-organise-le-blocus-monetaire-de-chypre.php

The European Central Bank (ECB) has warned that it ceased to supply liquidity to banks as Nicosia Cyprus does not accept the bailout.

As polished as it is, Mario Draghi knows how to use force when necessary. This is the method he has chosen to Cyprus , to force the government to accept the bailout from the EU and IMF rejected by the Cypriot parliament Tuesday.

After “took note” of the rejection of the aid plan for Nicosia, the ECB released its massive deterrent: the blockade money. She warned that it would feed more Cypriot banks liquidity, as the bailout EU-IMF would not be accepted. “The emergency liquidity from the ECB are available only to solvent banks, but banks in Cyprus are not creditworthy as it will not be quickly recapitalized,” said Jorg Asmussen, a member of the board of the ECB .

The ECB had never even brandished the threat. Suddenly, the Cypriot Minister of Finance and the Governor of the Central Bank of the island have no choice but to let the banks closed until further notice …

Avoid riots “as in Argentina”
“If they open banks, while the ECB blocks access to cash, it will be run on the bank”, warns Gilles Moec of Deutsche Bank. Some suggest a risk of riots in Argentina in 2002.

“The depositors could not withdraw more cash, lack of sufficient tickets, and those who would make transfers abroad would answer that it is impossible for the bank n” is authorized to do so by the ECB … , “says Gilles Moec, an expert on European monetary.

In the meantime, ATMs still work in Cyprus. They are powered by the reserves of the Central Bank of Cyprus. How long will this last? No one knows. This will depend on reserves “cash” of the local central bank, which depending on the country, can afford to “take a seat” according to the experts …

Even more serious companies, including airlines Cyprus will soon be unable to pay their bills kerosene, unable to make transfers abroad … If the situation persists, the blockade money can quickly turn into an economic blockade. Unheard of in the European Union!

Cypriot bank closure extended to morning of Tuesday March 26th.

This is hard to believe, could someone confirm.

From the examiner…
“Minister Coveney said the Cypriot government proposed a tax on savings, and we would not follow suit under any circumstances.

“Let me give an absolute guarantee on behalf of the Government that under no circumstances will this Government look to introduce a Cypriot-style levy on deposits for any purposes in terms of raising money,” he said.

“I’m clear as crystal from a Government point of view that we will not be targeting bank deposits for any purposes.”

I’m reassured. They just take 30% of your deposit interest out of your account automatically when it matures. And what about the raid on pension funds.

Wonder how much better an “absolute guarantee” is than a simple government guarantee.

@Mickey Hickey

“Cypriot bank closure extended to morning of Tuesday March 26th”

Confirmed….and then some? They may never reopen? Not in their current guise anyway. Good bank/bad bank anyone? Guess who might get the good bank…. I’m not joking.

@Mickey Hickey

re: Asmussen quote above
““The emergency liquidity from the ECB are available only to solvent banks, but banks in Cyprus are not creditworthy as it will not be quickly recapitalized,” said Jorg Asmussen, a member of the board of the ECB .”

I am beginning to wonder if Draghi has lost control of the hawks on the ECB board. This debacle does not have Draghi’s stamp on it.

@Mickey Hickey
“Even more serious companies, including airlines Cyprus will soon be unable to pay their bills kerosene, unable to make transfers abroad … If the situation persists, the blockade money can quickly turn into an economic blockade. Unheard of in the European Union!”

If Cyprus is blockaded, in goods or monetary terms, there will be a very severe EU wide backlash, possibly a boycott of the goods of the aggressors.

@Mickey Hickey

re: Asmussen quote above
““The emergency liquidity from the ECB are available only to solvent banks, but banks in Cyprus are not creditworthy as it will not be quickly recapitalized,” said Jorg Asmussen, a member of the board of the ECB .”

The timestamp on the Le Figaro article is before the ECB meeting at which a formal decision would be made, but it appears that the ECB are going to decide that Laiki and Bank of Cyprus are insolvent and will stop the Cyprus ELA. As a result the banks in Cyprus cannot now open until capital controls are in place or the money is found from somewhere to recap the two main banks (which may be new “good” banks).

I am beginning to wonder if Draghi has lost control of the hawks on the ECB board. This debacle does not have Draghi’s stamp on it.

@Joseph Ryan

I had the same thought about whether Asmussen was doing a solo run at the last Eurogroup meeting and had morphed, in his own mind, into some sort of pan-EZ finance minister who could make all sorts of threats to get the decisions he wanted, but on balance I think that this was a pre-arranged ECB position. Now that everything has gone public, the ECB have little choice but to follow through.

@ Bryan G

Could it possibly be the case that the office holders concerned have a legal mandate which they are duty bound to honour?

It is, after all, the decision by the Cypriot parliament which has created the situation.

@DOCM

Been busy and haven’t spotted it – do you have a link please?

“It is, after all, the decision by the Cypriot parliament which has created the situation.”

According to Eddie Hobbs on radio this evening, the Troika/EZ powers demanded 30% of Cypriot GDP within a week, or else.
The equivalent figure for Ireland, if Hobbs is correct, would be ~50BN.
The equivalent figure for Germany would be approx ~800BN.
Next Monday, cough up or else!

Some ‘partners’.

Seems like the NO side were onto something all those years back (disclaimer I voted YES)

http://omg.wthax.org/7zJsiw.jpg

On bright side (for moi) bitcoin is at $67 now being $47 just 48hrs ago (and $4 a year ago when I bought a pile being a curious geek :D)

http://www.bloomberg.com/news/2013-03-20/fleeing-the-euro-for-bitcoins-.html

“Worried your government is going to take your savings? There’s an app for that.
Actually, there’s an entire currency: Bitcoin, an online-only currency based on a decentralized network. It’s unregulated, hard to track and increasingly common. Since Sunday, downloads of three Bitcoin-related apps have surged on Spanish charts, Bloomberg Businessweek reports.”

@ Brian Lucey

+1

@Brian Lucey

I hope no one is gauche and points out it didn’t have to be so!

“Plan A” Versus “A Plan”

http://www.japlandic.com/2013/03/a-topsy-turvy-world.html

Is this the EU’s Munich moment?

@pr guy

Things have happened to decent journalists in Russia. Has a disincentivising effect.

@Law students

How many weeks ago was it that Draghi publicly told the German finance minister Cyprus was a matter for economists, not lawyers, so he should shut up?

President Putin has repeated his advice to Cyprus:

Order No. 227

Well, it decisively stopped the fascists once, let’s see how it does with the financial system fascists this time!

I seem to recollect that the little island of Malta received the George Cross in that duel; wonder what will the island of Cyprus receive in this one?

Some people just wanna play
They get a kick when it’s all messed up

http://www.youtube.com/watch?v=ZQQeNBmRp5o

The whole thing is very depressing. I wonder how long it will take to get to back to equilibrium .

Reading material from last year it seems that there is a certain amount of consensus in the economics world about the outline for a solution viz

A banking union, common bank supervisor, common recap/bank windup rules and common deposit insurance .

http://www.ft.com/intl/cms/s/0/73710400-cc1c-11e1-aac1-00144feabdc0.html

But this week blows that out of the water on the deposits side.

Petraeus Iraq quote (from before he met Ms Broadwell) : “Tell me how this ends”.

FT on Monday ultimatum

http://www.ft.com/cms/s/0/5adf82bc-9201-11e2-851f-00144feabdc0.html

Didnt we have some ultimata earlier? Heres the thing. It doesnt matter if the withdraw ELA now, or in the future. The cypriot banking system is dead. A poll this AM suggests 91% back the decision and 67% would rather leave the euro than accept a deposit haircut. http://www.ekathimerini.com/4dcgi/_w_articles_wsite1_1_21/03/2013_489062

through an unwillingness to put in place a banking union the union is now running the risk of showing that no its not inviolable. Interesting times indeed

ECB says without bailout it will stop emergency lending to Cypriot banks next week

http://www.ekathimerini.com/4dcgi/_w_articles_wsite2_1_21/03/2013_489058

This reall is crazy – taking Cyprus [0.2%ezgdp] to the edge of abyss for a measly 6 billion. Call the bluff, if bluff it is, what happens? EZ solutions appear to create more problems, and at a higher system level, than the originally perceived problem.

The Cypriots reduced to haggling with Russia for a stake in their gas fields. It is no time to be a small low population island on the EZ periphery. The chances of getting shafted are very high.

Wouldn’t it be gas if Turkey stepped in to save the day ?

@seafoid

It is no time to be a small low population island on the EZ periphery. The chances of getting shafted are very high.

However the Cyprus crisis ends, and lets hope its worse for the thugs in the Eurogroup now running the show than their Cypriot victims, there will have to be a reappraisal in Ireland, indeed in all the countries not bordering Germany, of whether EMU is too dangerous to continue, and if it is, how we might bring it down. We have effectively no control over EMU and are totally at its mercy.

Of course it is rather complicated by the boffins in the DoF having decided to put a staggering large debt in what might as well be a foreign currency around Ireland’s neck. I suppose the plan was to hope that Germany gave up on the Euro before we were pushed out.

Instead the Deutsche-bloc allies are looking pretty resolute, confident in their quest to turn Europe into an industrialists paradise and repatriate all Europe’s savings to banks rather closer to Berlin. Having successfully annexed monetary policy via the ECB and part occupied fiscal policy with the help of an array of neoliberal fifth columnists and the European Commission they think they can achieve total victory.

It will be welcome to the pastoralized hinterland then volks.

Germany is doing what it is doing because first and foremost it can. Germany is benefiting enormously from destroying economies on the periphery. Funds are flowing in from the periphery to “earn” less than the rate of inflation in Germany. Low cost labour is also flowing in from the high unemployment rates periphery. The periphery is effectively supplying Germany with cheap money and cheap labour.

No wonder the German economy is booming and the periphery is stagnating and in some areas collapsing. Time for a coordinated response from the 16 castrati without a voice to get off their incompetent asses and mount a full frontal assault on the now thuggish and larcenous Germans. What were once responsible, astute, competent and thrifty people have now descended into thuggery and larceny. Millions of Germans are appalled at this turn of events as they watch each greedy and selfish member of the EZ group look out for number one and may the devil take the hindmost. Right now the devil is coming for Cyprus. Next Spain, Luxembourg, Malta,Italy, Ireland …….

A vicious PR campaign was started almost a year ago against Cyprus. The highlights were tax evasion and avoidance, money laundering, Russian oligarchs. Cyprus is one of the better governed countries in the EU and there are no known valid reasons to cast aspersions on it. Who waged this campaign made possible by a lazy and incompetent main stream media. High on the list of suspects are German politicians aided and abetted by the Frankfurt bankers who will gain by destroying Cyprus, Malta, Luxembourg with countries like Ireland becoming collateral damage.

This state of affairs cannot continue we can curl up and die or fight back.

@EIS

The Germans are sleezebags

Easy there. Have you met any Germans?

Germany has a very fair character in many areas and it lacks a prominent racist political party (unlike the Netherlands, France and Greece). You could argue that Germany has gone too far in limiting the political space and action available to voters. The 5% voting threshold and the lack of referenda are clearly anti-democratic even if their stated aim is to prevent the rise of fringe “hate” parties.

Remember also that though Germany is effectively assaulting the less well off throughout Europe it is nothing it would not do, and has not done, to its own citizens. Witness the Hartz policies which treated the unemployed and not unemployment as the problem and attacked them. Germany is willing to increase poverty and inequality if the market requires it. Even after the global financial crisis “market discipline” is something Germany believes in.

The EU’s problem with Germany is really a problem with the political structure of the EU and the twin evils of neoliberalism and currency fetishation. There are complex historical and social explanations why this hard currency neoliberalism has become endemic to German political culture and prioritized in it. If the institutions of the EU had not become badly infected with the same ideology (Mr Buti and Mr Rehn, take bows) there might also not have been a problem.

Unfortunately the periphery of Europe can not wait for Germany to change its mind on ordoliberalism so we need to find some way to either reduce its influence in the EU (through confrontation and crisis) or distance ourselves from it.

ok
im no fan of present german policies… but lets cool the rhetoric.

@Brian Lucey

I am no fan of present german policies… but lets cool the rhetoric.

It is peculiar to me that there is not more of it (why indeed has there not been violence against the representatives of the Troika?)

In its activities in the Eurozone since the start of the global financial crisis the government of Germany coasted for a considerable time on the basically fond attitude that the rest of Europe had of Germans – they were quirkily sensible, politely strident, rigidly relaxed (Ireland benefited from the same rose tinted Euro-glasses in many ways). The phenomenon of anti-German racism is a new one outside of the UK.

Gradually the realization is setting in that Germany’s current position is not sensible but extremely reactionary (and as the numbers show, deeply counter productive) and at some point the heatedness of the rhetoric is going to be the least of the EU’s worries.

http://krugman.blogs.nytimes.com/2013/03/21/cyprus-the-sum-of-all-fubar/

Brian Lucey 1.48:
“ok
im no fan of present german policies… but lets cool the rhetoric.”

Brian Lucey writing in De Paper on Monday:
“All reports suggest, frankly, a hegemonic Germany run amok and declaring fiscal war on a small state. That should make everyone worried.”

Fiatlux : look at Pimco . MV=PY. M is going to fall like a stone…once the banks reopen then who would keep money there? someone might but would you?

BW2 : glad your reading. Wait till saturdays zamminer….you can parse away. Sure we all need a hobby in our retirement.

@ Brian Lucey

Yes, I’m a sad case, you can see that I have taken to counting contributors’ posts! BTW, presuming you are still actively at work, it is amazing that you too can so fulsomely indulge the blogging hobby.

@ KD

I disagree. Yes EIS has certainly used unparliamentary language whilst the Prof’s enunciation is positively Westminster. Nonetheless the thinly veiled reference to Germany’s N past is much more abusive. Apologies for not spelling out the N word but when I originally made this point on Monday and did use the full word, I got red carded. So there you are, the N word or allusions there to are regarded even by the referee as much more offensive than the relatively harmless “sleazebag”.

im going all historicoeconomic in the zamminer….. Plenty for BW2 to read. Meanwhile, away from his histrionics and betes noire. this is looking more and more like the end scene of resevoir dogs…

@Joseph Ryan.
It would appear that Schauble is calling all the shots. As regards treaties..I think the Golden rule applies…he who has the gold can willfully ignore them and interfere in any sovereign state. Interesting that the Maltese Minister blew the whistle on the carry on at that meeting…now where was our own minister when the Cypriot Minister was being beaten up….isn’t he the President or something of the meetings of finance ministers during our six month stint?

In the meantime.. It looks like the game is up for the biggest Cypriot bank.
http://www.ekathimerini.com/4dcgi/_w_articles_wsite2_1_21/03/2013_489212
Seems they are going to transfer the deposits up to 100,000 into a new bank and put the remainder in resolution.
The Russians won’t like that…but then maybe it’s a double bluff.

@ Prof Lucey

I look forward to it. It is interesting that the big deposit losers are Russian and British but I am sure you will have heeded Basil Fawlty’s advice and not mentioned the War.

Russia has planted a flag under the ice near the pole in order to claim the gas and oil reserves. There is that spat between China and Japan over, erm, islands, and hydrocarbon reserves. Europe a bit left out?

Nah.

http://www.reuters.com/article/2013/03/21/turkey-cyprus-gas-idUSL6N0CD7AI20130321

“Cypriot efforts to monetise as yet undeveloped offshore gas fields and position them as a vital source of energy for Europe have raised tensions with Turkey, which demands a joint approach and a share of the revenue.

“We are discussing all legal means … We could take the case to the European Union but we will use all political and legal channels,” the official said without elaborating.

Moscow would tighten its grip on European supplies if it invested in natural gas fields in the Mediterranean south of Cyprus as part of a deal to solve the island’s financial crisis.

So far, some 200 billion cubic metres of natural gas worth $80 billion at current prices have been discovered in the Aphrodite gas field in Cypriot waters, although the figures still have to be audited.

That would be enough to cover around 40 percent of the European Union’s annual gas consumption.”

Grumpy
As I see it : Germany is Nice Guy Eddie. Cyprus is Roth. France is Keitel, hoping both will off each other and he can walk….Russia is Mr Pink. Ireland was Marvin the Cop and ECB is Mr Blonde. Italy is Mr Blue and the rest of the eurozone is “no real people, only cops”

So far we know that the Spanish Economy Minister Luis de Guindos, Finnish Finance Minister Jutta Urpilainen, Luxembourg Finance Minister Luc Frieden, the Commission Brussels Rep went along with the herd against their better judgement.

Angela Merkel (not an attendee) voiced her view that “The Cyprus banking model is not sustainable.”. She means the cheek of them Cypriots thinking they can compete with our Frankfurt banking fraternity.

The ECB and IMF strongly supported the depositor haircut.

Does anyone know where Ireland stood other than Enda being Angela’s poodle.

Maybe someone with better skills than I have can dredge up the positions of the various participants. Most of them will have attempted to state their rationale publicly.

“Sorry Mickey – in a rush, but look up the Maltese Finance’s guy’s take.”

http://www.timesofmalta.com/articles/view/20130319/opinion/cyprus-a-lesson-for-life.462258#.UUs31yvAMEM.twitter

Time to reflect of past methods of getting ‘agreement’.
Small ‘independent’ countries didn’t count for much back then either.

http://en.wikipedia.org/wiki/Emil_H%C3%A1cha

“After the Treaty of Munich (Munich Agreement), Hácha was chosen as successor to Edvard Beneš on 30 November 1938 as President of the Czechoslovakia.[1] He was chosen because of his Catholicism, conservatism and lack of involvement in any government that led to the partition of the country.

In the evening of 14 March 1939, Hitler invited President Hácha to the Reich Chancellery in Berlin.[1] Hitler deliberately kept him waiting for hours, while Hitler watched a film.[4] Finally, at 1:30 a.m., on 15 March 1939, Hitler saw the President. He told Hácha that as they were speaking, the German army was about to invade Czechoslovakia.[1] All of Czechoslovakia’s defences were now under German control following the Munich Agreement in September of the previous year. The country was virtually surrounded by Germany on three fronts.

Hitler now gave the President two options: cooperate with Germany, in which case the “entry of German troops would take place in a tolerable manner” and “permit Czechoslovakia a generous life of her own, autonomy and a degree of national freedom…” or face a scenario in which “resistance would be broken by force of arms, using all means.” By four o’clock, after suffering a heart attack induced by Göring’s threat to bomb the capital, Hácha contacted Prague, effectively “signing Czechoslovakia away” to Germany.[5] French Ambassador Robert Coulondre reported that by half past four, Hácha was “in a state of total collapse, and kept going only by means of injections.”[6]”

This aint the early pangs of WW3..it’s the beginning of the leisure society. I for one cant wait. Lets stayb optimistic

@Mickey Hickey

The article by the Malta finance minister above is a stark warning to everybody.

I had a lot of regard for Germany and even tried to learn some German back in the early 1990s. (a much easier language than French imho).
They have had many excellent leaders in the past 50 years. Leaders who, until Merkel, appeared to value the concept of solidarity within Europe.

When Merkel came to power one of her first foreign trips was to Russia, a unilateral German and decidedly non European trip, designed to ensure German energy supplies. Since then she has been an unmitigated disaster for Europe and has her finance minister, who is one of the most dangerous men in Europe. A man who was prepared to dismiss Cyprus and Cypriots as ‘non systemic’, effectively untermenschen.
[Draghi publicly reprimanded him. One wonders if the present brutality being dished out to Cyprus, is in fact Schaeuble’s public response to Draghi. And I take your point that the Cyprus issue could in fact be a play for a Frankfurt financial centre]

Several democratic countries have now been bullied by Germany, through its control of the ECB and EZ institutions. On each occasion, the bullying has been preceded by the usual propaganda. On each occasion the propaganda plays to the image of Germany as the uber frugal, uber industrious hard working nation, and the rest as feckless, reckless idiots.

All European countries have problems and made bad mistakes. All, especially Ireland, have vested interests that remain intact. But these mistakes do not excuse the tactics being employed against them.

No mention is ever made of the fact that German banks loaned money, and that the recuperation of those losses is one of the root causes of the crisis. The money was lost, but Germany wants it back anyway.
No mention is ever made of the capital flows into Germany, the benefit conferred by these capital flows, or the possibility that these flows be controlled and reversed forcibly if necessary.

I have no issue with ordinary German people but the German government policy of propaganda, bullying and domination is certainly reminiscent of the Nazi era.
We must not be afraid to say that. And if it costs the rest of Europe to stop this German policy, we should pay that price today. Because, lets be very clear, we will all pay a higher price later on.
History, at the very least, should have taught us that much.

@Joseph Ryan

Now, now, tut, tut:

Godwin’s Law

“As a Usenet discussion grows longer, the probability of a comparison involving Nazis or Hitler approaches one.” There is a tradition in many groups that, once this occurs, that thread is over, and whoever mentioned the Nazis has automatically lost whatever argument was in progress. Godwin’s Law thus practically guarantees the existence of an upper bound on thread length in those groups.”

@carolus

Evidently Goodwin’s Law can be sneakily circumvented thanks to the Warmington-on-Sea platoon, whose leadership you may recall, were bankers. This is a mere quarter of the way down the page, so about 280 mostly useful comments followed.

http://www.irisheconomy.ie/index.php/2013/03/16/the-special-case-of-cyprus/#comment-395162

Gotchya.

.

http://www.bloomberg.com/news/2013-03-21/cyprus-s-three-way-game-of-chicken.html

“What’s amazing about this fiasco is that Europe’s leaders had almost a year to think about how to avoid it. Ever since Greece restructured its government debt, which made up a large share of Cypriot banks’ investments, it has been apparent that the banks would need a major recapitalization. With some preparation, Cyprus could have offered an excellent test of a euro-area banking union, in which the ECB would step in, force losses on the Cypriot banks’ creditors and quickly reopen the banks under new ownership. ”

Quite.

@grumpy

The Canadians liberated the Dutch.

There is a very impressive war memorial in Vienna. The inscription reads in part “Erected in honour of the Russian Army who liberated us from National Socialism”. Bowled me over. Very clever those Austrians. It attracts tourists from Russia and what was the East Bloc.

We all know the Irish and our cousins the Welsh and Scots never harmed a fly. All the stories about thievin, plunderin, murderous behaviour are all false. We Irish are proud of our lack of prejudices.

The antipodeans were dragged into it and would have preferred to stay home shearing sheep and drinking beer.

There are two sides to every history the one written by the victors and the one written by the losers as well as oral history which differs from both. I have heard various versions of both Irish and German history and none of it came out of text books.

@grumpy

The Canadians are like the Irish liberators and peacekeepers.

They never knowingly harmed a German by bombing.

I was up in Chicoutimi, Quebec last year at Baggotville Airport which was built to provide air protection for the Alcan Aluminium smelter that provided material to the fighter/bomber airplane manufacturers during the war.

They admit to taking Vimy Ridge but that was back in the dark ages.

A big question in Germany is who bombed Dresden, they blame the British. The bigger question is why a city filled with civilians was bombed so heavily (firestorm).

Thursdays report.
Up to date.

http://www.lefigaro.fr/conjoncture/2013/03/19/20002-20130319LIVWWW00277-en-direct-suivez.php

Last update on the crisis in Cyprus
This live is now complete. Thank you for following us. The Cyprus crisis continues Friday. Always under pressure from donors, teams refine the President Nicos Anastasiades “Plan B” that could allow Cyprus to receive EU aid of € 10 billion without taxing bank deposits. This plan must be submitted to the vote of Parliament. If there is no agreement by Monday, the ECB threatens to cut the tap liquidity to banks in Cyprus. ‘s future banking system and the whole island is on hold …
Yesterday at 22:08 Parliament’s vote postponed to Friday
The Cypriot parliament has postponed the vote on Friday bills establishing a solidarity fund and imposing a restriction of capital movements to avoid massive withdrawals in banks reopening scheduled for Tuesday.
Members said they needed more time to review this legislation, a key point of the “plan B” that the Cypriot authorities have until Monday to attend the Eurogroup to save the banks and the island of bankruptcy.
Yesterday at 21:15 Eurogroup ready to discuss a new plan
The euro area Thursday night it was ready to discuss with the Cypriot authorities an alternative proposal to tax deposits laid down in the bailout, which has caused an outcry in the country.
“The Eurogroup is ready to discuss with the Cypriot authorities a new proposal that they should submit as soon as possible,” said the chairman of the forum, Jeroen Dijsselbloem in a statement issued at the end of a telephone conference of Finance Ministers of the euro area. The eurozone is always willing to help Cyprus, on the verge of bankruptcy, “provided that the parameters previously defined are respected,” says Dijsselbloem.
Potential donors Nicosia – EU and IMF – including refuse to lend more than 10 billion euros and take that debt does not go beyond 100% of GDP in 2020. They also want the country to put in place a tax on bank deposits which would apply only to deposits above 100,000 euros. “The Eurogroup reaffirms the importance of fully guarantee bank deposits to below 100,000 euros” in the European Union, the statement said.
The protection of bank deposits below the threshold of € 100,000 has been championed by the central bankers of the euro zone after the outcry over a first draft providing for a tax on all deposits, though they had supported during the week weekend.
The original plan was that 5.8 billion from this tax new and very controversial, but it was rejected Tuesday by the Cypriot Parliament. The Europeans and the IMF must approve a new proposal Cypriot supposed confirm the contribution of 7 billion euros that Nicosia to pay in return for their support of ten billion.
Yesterday at 21:05 Standard & Poor’s deteriorating Cyprus
The U.S. rating agency Standard & Poor’s announced that it lowered the sovereign rating of Cyprus by one notch to ‘CCC + CCC cons, at a time when the country is trying to negotiate a new plan to help with creditors of the European Union and the IMF. Note, demoted one step in the “speculative”, is accompanied by a negative outlook, the agency said in a statement.
“Any plan help may be unpopular and difficult to implement in the context of a long and deep economic downturn. (…) As a result, we believe that the risk of a debt default are currently increasing, “the agency wrote in a statement. “In the absence of a credible alternative plan of recapitalization and financing of the budget, the risk of a credit event increases chaotic,” writes the agency.
Standard and Poor’s is also concerned about a possible movement of capital flight after Cypriot banks, currently closed, will reopen. “The risk remains that new leak of bank deposits worsens the economic situation makes it necessary measures to control capital and increases the need for additional support to banks,” wrote Standard & Poor’s.
Yesterday at 20:26 “We have one goal: to prevent the bankruptcy of our country”

Yesterday at 20:12 The oil markets, troubled by the euro area
Oil prices ended sharply lower Thursday in New York, undermined by gloomy news from the euro zone. The reference barrel for delivery in May, which is the first day of trading, lost $ 1.05 on the New York Mercantile Exchange (Nymex), to settle at 92.45 dollars.
“Oil prices came under strong pressure due to more information about the European economy,” noted Carl Larry, Oil Outlooks and Expert Opinions. The market has been cooled by the publication in March of accelerating contraction of private sector activity in the euro area. Investors have been particularly surprised by the index for Germany, which is displayed below expectations even though this country is generally regarded as the engine of growth in the euro zone. The market was also concerned about the latest developments in Nicosia. Paralyzed by the financial crisis, Cyprus Thursday sought to avoid at all costs the bankruptcy of its banks, but gave no immediate details on a plan that could provide billions of euros as Europe demands in exchange for his help .
All these news weighed on the euro, which fell against the dollar accordingly. But the rise in the dollar makes it less attractive purchases of dollar-denominated crude for investors provided with other currencies. Concentrated on Europe, investors have ignored encouraging indicators in the United States, including a recovery in March of manufacturing activity in the Philadelphia region (east) and a further increase for the third consecutive month, the composite index published by the Institute Conference Board.
Yesterday at 20:10 MPs head to parliament
From our special correspondent in Nicosia, Alexia Kefalas, MPs are currently leading to the parliament may vote for the “Plan B” rescue party discussed in the Council of Ministers.
Yesterday at 19:57 The bankruptcy will be avoided Popular Bank, the Central Bank promises
Cyprus will take steps to strengthen its banking sector and prevent the bankruptcy of Cyprus Popular Bank, the second largest bank, said Thursday the governor of the central bank Panicos Demetriades.
“By establishing this legal framework, resolution measures will be imposed Popular Bank so that it can continue to provide banking services to its clients on Tuesday,” he told reporters. He did not specify the content of these measures but said that bank deposits are protected up to 100,000 euros.
Yesterday at 19:14 Central Bank to reorganize the banking system
Central Bank of Cyprus has proposed a restructuring of the banking sector of the island, weighed down by its exposure to Greek debt and threatened with bankruptcy in the coming days , said Thursday the governor Panicos Demetriades.
Central Bank “recommended emergency presentation to Parliament and the immediate application of a legislative framework for the restructuring and revitalization of the Cypriot banking system,” said Mr Demetriades before entering the presidential palace, where were gathered the country’s political leaders.
“This consolidation process will avoid the risk of bank failure and protect in their entirety all insured deposits up to an amount of 100,000 euros (129,000 dollars),” he added. “It also puts in place the conditions for a resumption of the banking sector and guarantees jobs,” he added.
Yesterday at 19:06 Turkey threatens to thwart Cyprus
Turkey would challenge any decision that would take the Republic of Cyprus to accelerate the exploitation of gas fields offshore in order to overcome its financial crisis, said Thursday senior Turkish officials.
The European Union gave the Republic of Cyprus (Greek part) until Monday to raise 5.8 billion euros needed to get a bailout, failing which the financial system is threatened with bankruptcy and the country likely to leave the eurozone. Cyprus is in talks with Moscow about possible Russian investments . The Cypriot Minister of Finance Michael Sarris said that gas reserves in the sea was one of the areas in which the Russians could invest.
“These resources belong to both communities, and the future of these deposits can not be the mere will of the southern part of Cyprus. We could if necessary take steps to counter such initiatives,” told Reuters the a Turkish officials. “The exclusive use of these resources through the southern part of Cyprus is out of the question (…) and unacceptable,” he added. “We are considering all legal means. (…) We could take the matter to the European Union, but we will use all political and legal channels,” the official said without giving further details.
ALSO READ:
“Turkey launches prospection campaign off Northern Cyprus

Yesterday at 18:45 The Popular Bank limit withdrawals to 260 euros
While endless queues become distributors since this morning, the Popular Bank, Bank of Cyprus and the second one of the most threatened with bankruptcy in the coming days due to its exposure to Greek debt, announced Thursday a limitation of 260 euros per day to its ATMs.

Yesterday at 18:38 Latvia wants to be a “bis Cyprus”
Latvia , a member state of the European Union candidate for entry into the euro area and that banks already contain significant deposits Russian, not seen take over Cyprus, with the financial sector is bursting with Russian capital threatened to collapse .
Third of the population of Latvia, one of three former Baltic republics of the USSR, Russian-speaking countries and banks are since the fall of communism, a haven for some financial fortunes of the great Russian neighbor. Kristaps Zakulis, director of the national regulatory agency FKTK bank does not, however, expect an influx of Russian capital that would be caused by the Cyprus crisis. “The hypothesis of arrival in the coming days of large quantities of money from unknown sources in the Latvian financial sector has no basis,” he said in a statement Thursday. “Similarly, it is not true that Latvia could become a bis Cyprus, because the size of financial sectors of our two countries and their importance in the economy are very different,” he added.
ALSO READ:
” Latvia is ready to join the euro despite crisis
Yesterday at 18:13 The tax on bank deposits is a threat according to economists
A tax on bank deposits in Cyprus , if it is finally implemented, would threaten the financial stability of other countries in the Eurozone in trouble, according to a survey by Reuters from market specialists.

Twenty of the 22 economists and analysts specializing in bonds since Monday interviewed believe that such a tax is likely to undermine the banking system of other countries weakened by the debt crisis. In theory, the deposits of less than 100,000 euros in the euro zone are guaranteed, but analysts fear that a proposed tax on bank deposits would jeopardize this principle.

“The risk is (…) that bank customers do not trust most to guarantee private deposits in all Member States of the European Union,” said Gernot Griebling (LLBW). “If ever rumors of liquidity problems emerge on other banks, it could cause a panic with massive withdrawals.”
Yesterday at 18:02 European shares weighed down by Cyprus
European stock markets ended lower on Thursday , hurt by the risk of a collapse of the banking system of Cyprus and the announcement of a new contraction in the euro zone in March.

Paris dropped 1.43% to 3774.85 points after having evolved in a relatively large range of 66 points. London yielded 0.69%, 0.87% Frankfurt, Milan 0.5%, 0.77% Madrid. The EuroStoxx 50des large values ​​of the euro area has lost 0.95%.

The performance of the German government bond (Bund) and 10 years, a safe haven of the euro zone eased two basis points to 1.37%. The euro remained under pressure and is trading around 1.2915 dollars in late afternoon in Europe.

Yesterday at 17:54 Concerns about the second bank in the country
From our special correspondent in Nicosia, Alexia Kefalas
Employees of the Laiki bank protest outside parliament. “We lost everything! 508 people will gather in street because our bank is closed. Similarly for pension funds. Where is Greece? Us, we helped them. Where are they? We wanted the tax credit, the least we would have saved our job, “said Elena Stylianou, an employee.
Matina, crying, working for 22 years in this bank. With her three children “and many loans,” she is also concerned. “We do not believe in the transformation of our bank bad bank. It will not work. This bank was my life and that of my family. Europeans must leave us alone and we bought a Russian bank quickly “she quips.
Laiki bank accounts for 8.5 billion euros 35 to 38 billion euros that weighs the Cypriot banking system. Rumors of closure of this facility have been conveyed by the local media:
Yesterday at 17:30 Brussels and Moscow bury the hatchet
From our correspondent in Moscow, Pierre Avril
The meeting was not on the program of the visit of the President of the European Commission, which officially is exclusively devoted to EU-Russia bilateral relations. But José Manuel Barroso finally met Vladimir Putin in Moscow on Thursday evening, sign, according Kremlinologists a tacit agreement has been reached between the two partners on the management of the Cyprus crisis. “We wanted to erase the impression we did not discuss with the Russians in the development of the rescue plan ” a European source said, while welcoming the “tone has changed” between the two partners.
Accordance with the wishes expressed by the German Chancellor, Angela Merkel, Russia should intervene financially, if any, in second place in the island government assistance. “Europe has already experienced this kind of problems and the has overcome, ” recalled the morning, the President of the European executive at a conference on partnership between Russia and Europe: implication only. Earlier in the morning, the head of the Russian government, Medvedev explained to European journalists, the Cyprus crisis should be settled “by the citizens of the country, the European Union and third countries by who have their interests (Russia, Ed). ”
Of course, Medvedev also called “totally stupid”, the introduction of a tax on bank deposits, but no matter: this statement, and the output of Vladimir Putin Monday, March 18 (“measures hazardous and non-professional “), would, according to several sources, for internal use only: to show the population that the Russian state is much more enlightened European governments, and in twenty-seven, as shown almost every night State television is the “shambles”. Brussels should not unduly, offended by these remarks.
Yesterday at 17:14 The first Cypriot bank calls for an agreement
Bank of Cyprus, the largest bank in Cyprus today urged the government and political party leaders to urgently reach an agreement with the Eurogroup on a plan to help prevent the ruin of the island.

“The economy of Cyprus is on the edge (of ruin) and in a fragile state, “said the bank in a statement. “The next step could mark his salvation or destruction,” she added, while the banking sector of the island faces a risk of collapse in the coming days.

Yesterday at 17:06 Europe expects a capital outflow of 30 billion euros
Europe has made its calculations. When Cypriot banks will reopen on Tuesday, European officials expect a flight of capital of 30 billion euros in a few days.
This amount represents assets held by non-residents (individuals or corporations, Russian or British) banks in the island estimated at 30% of deposits valued at 70 billion euros, 20 billion euros.
We must add 10 billion euros Cypriot residents want a precaution, remove or transfer cash accounts abroad. This is more than 10% of capital flight evoked by the Governor of the Central Bank of Cyprus earlier this week. This is why Europe wants to impose a restriction of capital movements within the framework of “Plan B” in Cyprus.
Yesterday at 16:51 A demonstration goes wrong in Nicosia
From our special correspondent in Nicosia, Alexia Kefalas
Clashes took place in front of the parliament during an anti-capitalist in Nicosia.
Yesterday at 16:35 Eurogroup meet by phone 18 hours
The finance ministers of the euro area will hold a telephone conference dedicated to Cyprus 18 hours GMT on Thursday, announced on Twitter their leader, Jeroen Dijsselbloem.

“7:00 (Note: 18 hours GMT), conference call of the Eurogroup to take stock of the situation in Cyprus , “writes Dijsselbloem after the announcement by the Cypriot authorities that they waived tax deposits bank in favor of a solidarity fund intended to avoid the collapse of its banks.
Yesterday at 16:01 A rescue project by Monday
The Council of Ministers has just met to discuss the plan B that the country intends to propose. In the early afternoon, the Government spokesman Christos Stylianides stated that “the draft legislation is currently being prepared (…) to be presented to the Cabinet today to 18 hours (16 hours GMT). ”

The Cypriot authorities have announced an agreement to found a “Plan B” negating any tax on bank deposits and the creation of an “investment fund of solidarity.” They did, however, reveal any details about how he would fund and the amounts it could collect.

The ultimatum of the ECB has added to already high tension in the island but also in Brussels or Moscow. “The Cypriot authorities have three things to do by Tuesday: to present a credible and viable plan B to replace the rescue plan rejected by Parliament, establishing a blockade over a long period of capital invested in banks, and prepare fusion between the two major banks in difficulties, “the source said on condition of anonymity. The risk otherwise is an output of Cyprus to the euro area, he warned.

The crisis in Cyprus poses a “systemic risk” to the euro zone, outbid the head of the Eurogroup Jeroen Dijsselbloem. “We need to work on a program that will end this risk,” he said before the European Parliament.

Yesterday at 15:37 The EU recalls the hypothesis of an exit from the euro area

In the absence of agreement on a tax on bank deposits, Cyprus will close its largest banks, leaving the tile uninsured depositors, or may have to leave the euro zone, said on Thursday an official of the European Union.

“The decision is ultimately the country,” the official said, well informed about the negotiations between the eurozone, the International Monetary Fund (IMF) and Cyprus .
“We can do much to prevent damage such fundamental output of the euro, we and especially the ECB (European Central Bank), but if the country does not cooperate, he finds himself just short of cash and then n ‘have no other choice but to start printing its own currency, “he said.

In case of financial collapse Cyprus, at least 30% to 40% of all bank deposits unsecured over 100,000 euros would be lost, and perhaps more than that, said the European official.
Yesterday at 15:05 The Russian-Cypriot talks deflate
From our correspondent in Moscow, Pierre Avril
The three-day presence of the Minister of Finance in Moscow should not be used much. Michalis Sarris happened Tuesday night in the Russian capital, brandishing a list of assets to cede Cyprus, and a request for loan extension, not found before him, a purchaser or lender very understanding . “We have a limited optimism about the form of aid to Cyprus to be found,” just said it to a journalist of Echo of Moscow .
First, any additional loan is excluded: this would be to increase the debt of countries that neither Moscow nor Brussels want. Second, in an interview with European newspapers this morning, the Prime Minister Dmitry Medvedev was choosy to the perspective offered by Gazprom in Nicosia to participate in the exploitation of offshore deposits.
This intervention could bring the wrath of Turkey who still control the northern part of the Mediterranean island: a diplomatic and economic risk that Moscow is not willing to take. Although Cypriot banks were caused to fall into the hands Russian, account will not more. “Cyprus is a European country” , said a source close to Russian implied is first to EU to solve its problems.
Yesterday at 14:49 In the eyes of Americans, Cyprus is a last warning to the EU
From our correspondent in Washington, Pierre-Yves Dugua
The editorial in the Washington Post of Thursday, March 21 summarizes the general opinion of Americans after the Cyprus crisis: “How ironic if the final result of the excessive expansion of the euro zone to Cyprus is shown to result in extension the zone of influence of Russia at the expense of the European Union. Apparently the creators of the euro area have underestimated the geopolitical risk, as well as difficulites establish a common currency between nations who put their own interests before that of the union, who have no real bank Central banking regulation not common and no common fiscal policy. After three years of crisis, these errors architecture are essentially always present. It is unlikely that the Cyprus crisis triggered a collapse in Europe, but this crisis is a warning: the period during which you can still correct these defects architecture has its limits. ”

Yesterday at 14:46 Wall Street opens down
Wall Street opened lower Thursday, as European stock markets, affected by the crisis in Cyprus. The Dow Jones lost 0.44% during early trade, to 14,448.12 points and the Standard & Poor’s 500 index 0.46% to 1551.50. The poor results published Wednesday by Oracle and economic indicators just meet expectations also explain investor caution.
Yesterday at 13:54 The EU calls on Cyprus to establish a blocking capital
According to a European source quoted by AFP, Brussels seeks to convince Cyprus to establish a blocking of capital to avoid bankruptcy of its banks. “The Cypriot authorities have three things to do by Tuesday: to present a credible and viable plan B to replace the rescue plan rejected by Parliament, establishing a blockade over a long period of capital invested in banks, and prepare fusion between the two main banks in trouble, “says the source.
Yesterday at 13:14 In Moscow, Fillon criticized the management of the crisis by Europeans
Former Prime Minister François Fillon has been very critical on Thursday in Moscow, about the bailout of Cyprus rejected by Parliament. Pushing for a tax on bank deposits, Brussels returned to the principle “never to question bank deposits” according to François Fillon. “It is this decision that stopped the crisis threatening the entire global financial system. […] We must not return to this principle. If one believes that capital taxation in Cyprus is not sufficient, it is different from that of other European countries, then we must reform the tax system in Cyprus. but not a decision that can give the impression that we could in other countries, tomorrow, take deposits and to investors, “said he.
Yesterday at 12:39 eurogroup members alarmed Wednesday during a working meeting
The situation in Cyprus generates strong concerns in Brussels. According to a confidential note that the content has been published by Reuters on Thursday , members of the Eurogroup agreed on Wednesday at a meeting of work, find themselves in a very difficult situation. At this meeting, at which representatives of Cyprus decided not to join the emotional level is “high mounted” to the difficulty of finding rational solutions. “The Cypriot Parliament is too emotional. If Cyprus can not even think to attend this meeting is that we have a big problem, “analyzed the French representative. According to this note, the German representative aouvertement raised the possibility of an outflow of Cyprus in the euro area, as well as measures to prevent contagion to the rest of the area.
Yesterday at 12:30 Cyprus will create a “solidarity fund”
The leader of the Cypriot parties poilitiques agreed unanimously to create a “solidarity fund” instead of taxing bank deposits. They hope to raise 5.8 billion euros through this fund.
Yesterday at 11:59
President of the Cyprus Parliament excludes tax deposits
With our special correspondent in Nicosia, Alexia Kefalas
Following the presentation of the bailout alternative to parliamentary leaders of major political parties in Cyprus, President of Parliament, Gianakis Omirou ruled out include a bank tax: “We have not discussed with a levy on deposits, and we will not repeat. MPs have rejected, “he said. The Cypriot Parliament overturned last week a first rescue plan includes a 9.9% tax on bank deposits above 100,000 euros, and 6.75% below.
Since the Cypriot authorities are trying to find a “Plan B” that would allow them to raise the equivalent amount – 5.8 billion euros – demanded by Brussels in exchange for aid of 10 billion euros. After presenting the plan to representatives of political parties, the President of Cyprus, Nicos Anastasiades, hoped for a vote in Parliament in the afternoon. But according to the vice-president of the ruling party, Averof Neophytou, it is unlikely to be ready in time.
This morning, the President of the Eurogroup, Jeroen Dijsselbloem, considered “probably inevitable” that Plan B includes a tax credit, in a form other than that shown in the foreground. The track of a levy on deposits over € 100,000 was raised. According to a government spokesman, Plan B could also include the nationalization of pension funds of public institutions, when the banking sector could be restructured.
According to media Cyprus, Nicosia also consider restricting outputs in cash once the banks reopened, normally on Tuesday.
Yesterday at 11:11 European governance blamed by the Belgian press
“The real threat to the future of Europe is not monetary. Is its total lack of governance ” Assen Beatrice Delvaux , Brussels daily columnist for Le Soir, branding discredit the treatment of the Cyprus crisis throws the European instance. “There is that beautiful people in this neglect: Olli Rehn, Vice-President of the Commission responsible for Economic and Monetary Affairs and authorized as such for months to lecture any country that does not behave accordance with the rules; Eurogroup finance ministers representing 17 – 17! – Whose president was in its first meeting the ECB responsible for ensuring the stability and credibility of the monetary system, “says Ms. Delvaux …
Yesterday at 11:07 No sign, for the moment, a contagion
The Cyprus crisis does not seem to extend, for the moment, the peripheral countries of the euro area: Spain raised 4.51 billion on Thursday euros of bonds, against 4 billion referred to in interest rates down on each maturity (4.89% on the bonds to 10 years against 4.91% at the previous auction).
Yesterday at 10:37 Cyprus: “The tax increases the risk of contagion” (Fitch)
According to Fitch , the taxation of bank deposits in Cyprus’ increases the risk of contagion “in the euro area. However, Fitch analysts do not expect that instability extends Nicosia banking system of other countries in the euro area.
Yesterday at 10:15 The queues distributors

Photo credit: Yorgos Karahalis – Reuters
According to our special correspondent in Nicosia “queues are endless distributors since this morning.” Confirmation of this post with a Cypriot who was in line in front of the distributor Iaiki Cypriot bank.

Frankfurter Allgemeine

More focus on alternative plan “Solidarity Fund” and the affect on pensions.

http://www.faz.net/aktuell/politik/europaeische-union/zypern-dann-eben-ein-zwangsinvestitionsfonds-12123631.html

Cyprus
Then just a forced investment funds
21.03.2013 · In Cyprus threatens the collapse – now wants the Orthodox Church to help save the ailing banking sector. But above all, a handle to the pension funds (semi-) public companies to give the country a future. The Cypriot parliament on Friday to vote on a bill.
By MICHAEL MARTENS , NICOSIA
Product Images (3) Readers opinions (24)

© DPA
closed the time being: Businesses in Cyprus
Cypriot State and Government Nikos Anastasiadis has presented on Thursday, at least in broad terms the “Plan B”, which had been since the rejection of the compulsory levy on savings in local banks expected by the parliament in Nicosia with excitement and skepticism. According to a release from the Office of the President of the ruling until the end of February President and the heads of the parliamentary parties are in discussions on Thursday “in a spirit of consensus and mutual understanding” came to the unanimous decision to appoint a “Investment Solidarity Fund to start. ” This fund is expected to raise that 5.8 billion euros, the euro-zone as expected Cypriot contribution and precondition for a rescue package worth about ten billion euros.

Only until Monday the ECB bailouts
The Cypriot government on Thursday night brought a law draft for the introduction of capital controls and the creation of a solidarity fund to Parliament. This will on Friday to vote on the draft.

The ECB had previously issued an ultimatum to the country and announced that Cyprus banks grant only to Monday liquidity support should be available by then no credible plan for how Cyprus can apply its own contribution. The bill was first topic of a meeting on Thursday, the Cypriot Government. Cyprus Parliament on Tuesday show the plan of the euro area, balances on accounts with local banks with a compulsory levy of up to ten percent, without let fall by a single vote in favor.

The money will on Thursday, according to the first only fragmentary information available now are instead deposited by a handle in the pension funds of state or, in some state-owned enterprises. Were called, among other things, the Cypriot telecommunications (Cyprus Telecommunication Authority), the public service broadcaster (Cyprus Broadcasting Corporation) and the electric utility Electricity Authority of Cyprus. These and other state or some state-owned companies employ thousands of Cypriots, whose retirement pension would be affected by the operation. According to the government official reading is at the access to the retirement accounts, however, to an “investment”.

Half

© FAZ
The investment in the “Solidarity Fund” coerced employees should be compensated from the (possible) gas exploration off the coast of Cyprus, according to unofficial representation by government spokesmen (hoped) by the profits. These gains are, however, if ever, set a few years earlier, as on many crucial issues, especially to transport the gas to the customer markets, are not yet clear. The construction of a pipeline through Turkish territory, experts called economical solution is, for political reasons, not possible in the foreseeable future, since Turkey does not recognize the Cypriot government. Nicosia instead favored the construction of a Cypriot-Israeli gas-liquefaction plant, whose creation is missing the Cypriot state, but the money.

Chrysostomos II offered assistance
A major share of the planned fund will also raise the very wealthy Orthodox Church of Cyprus, the Archbishop Chrysostomos II has offered support already. The politically influential, economically similar to a group organized church are numerous companies, hotels and real estate in Cyprus, whose value is estimated to be well over two billion euros. Among other things, the church has a third of the “Hellenic Bank” and is a shareholder of the Keo-brewery that produces the most popular local beer, but also sells other alcoholic beverages. After meeting Anastasiadis said Archbishop Chrysostomos II, “All the land which the church belongs, is the state available to help the people, that the banking sector does not collapse and we can stand on our own feet.” The church can strain their entire real estate mortgage and use the money to buy bonds, “the government support,” the church leader was quoted as saying. As the church in the past, but always extremely accurate attended unto their property and its stimulating, stalked some Cypriots doubt the sincerity of such statements.

After initially unconfirmed reports, the CBC should also contribute their gold reserves to the Solidarity Fund. Thus, the Cypriot calculations, would together a contribution of 4.8 billion euros. The lack billion should be raised by a strictly limited compulsory levy on bank deposits. This would apply only supposedly balances of more than 100,000 euros and would be well below the originally designated ten percent, said a senior Cypriot officials, who stressed, however, that the basis of calculation and details of the plan are still in flux.

Prudence by Turnaround
Cyprus Central Bank chief Panikos Dimitriadis said after a meeting with President Anastasiadis, he was confident that there will be “to Monday a support program for the Cypriot economy.” The government, meanwhile, turned with a call for peace and order to the Greeks of the island: “The President and the government control prudently and responsibly through the critical times, by making Cyprus and call upon everyone to show the same spirit. Statements and actions that could jeopardize existing between the political leaders of the spirit of the agreement may be, should be avoided. “The president and the government assured the people of Cyprus that the country’s leadership has grown the importance of the moment and the country” from the will lead impasse, “it said in the statement also mutatis mutandis. The long queues at the ATMs in Nicosia, Limassol and other places in the Greek part of Cyprus showed on Thursday, however, that the population of the governmental reassurances gives little confidence

@ Mickey Hickey

The content is more likely to be read via the original link (how hard is it to ct/paste into Google Translate) by those interested than this long jumble of text without paragraph breaks.

Now we see why Cyprus is expendable, Panama offers a more secure opportunity for the German wealthy to evade taxes. The hypocrisy of it all.

Danel O’Huiginn, is that his stage name.

From the Suddeutsche Zeitung.

http://www.sueddeutsche.de/wirtschaft/deutsche-milliardaere-in-steueroase-porsche-pich-und-quandt-in-panama-1.1628885

Several prominent German entrepreneurs and private individuals, including some with assets in the billions are, according to information from the Süddeutsche Zeitung involved as directors or owners in companies in the tax haven Panama. According to a report in the Wednesday edition of the Süddeutsche Zeitung are also including representatives of some of the richest German family, for example, the families Porsche and Piëch Quandt, also the publisher Hubert Burda, the coffee dynasty Jacobs and the banker von Finck family.

The families Piëch and Porsche said that the company held by them were not reported for tax purposes in Panama. Silvia Quandt and Hubert Burda claim to know nothing of an investment in Panama. Von Finck family has not expressed, the AG Jacobs pointed to private transactions of the late Klaus J. Jacobs.

Some of the companies were set up only in recent years, others have been around for decades. A business purpose is usually not really visible – allegedly even for those affected. Thus, for companies in the logistics billionaire Klaus-Michael Kuehne, the coffee-entrepreneur Klaus J. Jacobs and the late banker Christoph von Metzler elicit no longer in his own words, or statements of speakers, which its now back deleted firms were founded.
Panama has always been renowned as a secretive tax haven. By the Süddeutsche Zeitung researched names are taken from the official database of the country . The data contained therein has the English hacker Daniel O’Huiginn made ​​on his blog accessible and searchable.

Markus Meinzer the “Tax Justice Network” has dealt with tax havens. “More than 50 percent of income in cross-border investment transactions are not taxed. Why companies liable in Panama in something disreputable. And I can think of a few legitimate reasons why someone who lives and works in Germany, Panama should maintain a shell company,” said he the Süddeutsche Zeitung . Tax evasion in countries such as Panama, according to Meinzer caused serious problems: less tax revenue, more debt, higher taxes for middle-income people.