Bank of Cyprus High-end Clients to Get One Third of Deposits in 'Worthless' Shares
RUSSIA TODAY: Large depositors in the Bank of Cyprus will get back 37.5 percent of their money in shares instead of cash, the Bank of Cyprus has confirmed. The move is the part of the painful Cyprus rescue package.

Under the new conditions, Bank of Cyprus clients with accounts with over 100,000 euros in deposits will be offered shares instead of cash in the bank for 37.5 percent of their deposits. Those under the 100,000 mark will reportedly not be required to participate in the scheme.

Authorities had previously predicted a loss to big depositors of 30 to 40 percent. Anger is mounting in the country as Cypriots protest the dissolving of the second-largest bank – Cyprus Popular Bank, also known as Laiki – and what they are calling a theft of their assets.

Under the terms of the deal, the assets of Laiki bank will be transferred to Bank of Cyprus.

At Bank of Cyprus, about 22.5 percent of deposits over 100,000 euros will earn no interest. The rest of the account will generate interest, but will not be repaid until the bank shows a strong performance. » | Saturday, March 30, 2013

Vatican Inc.
People & Power examines the secretive world of the Vatican's bank

Venezuela's Chocolate Dreams Melting Away
Global sales of chocolate have been booming in recent years - but not everyone is getting a bite of the pie.

Bank of Cyprus Savers with More Than 100,000 Euros Now face 60% Losses as Officials Scramble to Prevent Collapse
MAIL ONLINE: Bank insider and government technocrat anonymously reveal latest plan / Deposits over 100,000 euros will lose 37.5% of their value / Savers then stand to lose a further 22.5% depending on an assessment / Cypriot banks refusing to release UK pension payments to expat Britons / President of Cyprus says there is 'no intention' of leaving the eurozone

Savers with over 100,000 euros deposited in the Bank of Cyprus could now be hit for losses of up to 60 per cent, according to a central bank official and a senior finance ministry technocrat.

The officials, who spoke on condition of anonymity because they're not authorized to publicly discuss details of the issue, said deposits over 100,000 euros at the country's largest lender will lose 37.5 percent of their value after being converted into bank shares.

They said that savers could then lose up to 22.5 per cent more, depending on an assessment by officials who will determine the exact figure aimed at restoring the troubled bank back to health. » | Daniel Miller | Saturday, March 30, 2013

Nepal's First Billionaire Explains His Success
A man who turned noodles into a multi-million dollar business has become the first Nepalese to make it into the Forbes magazine rich list.

Bail-In Blues: Luxembourg Warns of Investor Flight from Europe
SPIEGEL ONLINE INTERNATIONAL: In Luxembourg, leaders are warning that applying the Cypriot bailout model -- a levy on bank deposits -- to other crisis-plagued countries could lead to a flight of investors from Europe. But the EU is considering the option anyway.


The debate over this week's "bail in" of bank account holders in Cyprus as part of the country's debt crisis bailout is continuing to simmer in Europe. In Luxembourg, Finance Minister Luc Frieden has warned that the example set in Cyprus by taxing people holding €100,000 ($129,000) or more in their accounts could drive investors out of Europe.

"This will lead to a situation in which investors invest their money outside the euro zone," he told SPIEGEL. "In this difficult situation, we need to avoid anything that will lead to instability and destroy the trust of savers."

Earlier this week, Euro Group President Jeroen Dijsselbloem sparked an enormous controversy after stating that the solution found in Cyprus could be applied throughout the euro zone in the future. » | dsl/SPIEGEL | Friday, March 29, 2013

Medienecho zur Zypern-Krise: "Germanophobie ist unfair"
SPIEGEL ONLINE: In der Zypern-Krise treibt Europas Presse vor allem die Frage nach der deutschen Führungsrolle in der EU um: Während die britische "Financial Times" Verständnis für den deutschen Steuerzahler zeigt, ruft die französische "Libération" zur "Gegenattacke des latinischen Imperiums" auf.


"Zum ersten Mal nach seiner Gründung hat Deutschland den Großteil seiner Freunde zumindest verloren, wenn sie nicht schon zu Feinden geworden sind", diagnostiziert Jean Quartemer im Europa-Blog der französischen Tageszeitung "Libération" die europäische Nachbarschaftskrise. Hinter der deutschen Führungsrolle vermutet er geheime Sehnsüchte nach der D-Mark:

Berlins Problem ist, dass es seine neue Macht nicht zu nutzen wusste. Die Euro-Krise ist allem voran eine Vertrauenskrise und so ist Deutschland gegen seinen Willen in den Vordergrund gerückt, eben durch den festen Glauben der Märkte, dass allein schon die deutsche Unterschrift wertvoll sei. Hinter dem Euro haben die Investoren nie aufgehört nach der D-Mark zu suchen... Kein anderes Land, auch nicht Frankreich, das eine lange Tradition monetärer Instabilität und schlechter Staatsfinanzen hat, konnte eine Führungsrolle wie Deutschland vertreten. Auch die Europäische Kommission ist aufgrund fehlender finanzieller Mittel und mangelnder politischer Glaubwürdigkeit auf Deutschland angewiesen, insbesondere seit der Präsidentschaft von José Manuel Barroso, den Merkel aber nicht ausstehen kann. Libération. Blog: Coulisses de Bruxelles. Paris, 25. März

In der "Financial Times" hält Gideon Rachman Berlin für das Zentrum Europas und erklärt, warum diese Konstellation auch aus historischer Sicht unvermeidlich sei:

Diese Germanophobie ist unfair. Hinter dem ganzen Geschrei und Streit werden die deutschen Steuerzahler wieder einmal das größte Stück des nächsten europäischen Rettungsprogramms zahlen. Es scheint ein wenig harsch, die Deutschen mehrere Milliarden Euro aufbringen zu lassen, um sie dann als Neonazis zu beschimpfen.

» | Nicolas Oxen | Donnerstag, 28. März 2013

Qatari Investment Fund Pays £400m for Park Lane Hotel
THE GUARDIAN: InterContinental is latest London asset for emirate investing oil and gas cash in European real estate


The gas and oil wealth of Qatar has been used to snap up another UK asset after the emirate bought the InterContinental London Park Lane hotel in a £400m deal.

Constellation Hotels, part of the Qatar Holding investment vehicle that has invested in Sainsbury's and Barclays, has paid £301.5m for InterContinental Hotel Group's 57-year lease on the 447-bedroom property close to Hyde Park, the company announced on Thursday.

In a separate £100m deal it also acquired the freehold from the Crown Estate, the property company that controls the assets of the Queen. » | Simon Goodley | Thursday, March 28, 2013

Cyprus Banks Reopen Amid Simmering Tension
THE DAILY TELEGRAPH – EXTRACT: Cypriots formed orderly queues outside the country’s banks after they reopened for the first time in nearly two weeks on Thursday, confounding fears that there would be scenes of unrest and violence.

…

Angela Merkel, the German Chancellor, was the target of particular resentment.

“Merkel says every single Cypriot is guilty of dirty banking. But it is the Germans who should be ashamed for the greatest evil in the history of Europe – the Holocaust,” said a furious Cleri Machlouzarides, a chartered architect, outside a branch of Laiki Bank.

“Tell the bloody Nazis to go home. Germany should go and find someone their own size to pick on instead of trying to strangle us. Europeans should know it’s not going to stop here. “Luxembourg is next, then Spain, Portugal, Ireland.” … » | Nick Squires, in Nicosia | Thursday, March 28, 2013

Can Banks Take Your Savings Now?
YAHOO! FINACE – EXTRACT: As Cypriot savers see their savings used to bail out banks, we look at how safe your money is in a British bank.

…

What about UK deposits? [Are they safe?] Sterling may be one of the world's weakest major currencies right now, but thankfully, we don't share it with anybody, including the Germans.

In the UK, we have our own deposit protection scheme, the Financial Services Compensation Scheme. This guarantees the first £85,000 of your money (£170,000 for couples), should your bank, building society or credit union collapse.

Anybody who remembers desperate savers lining up outside the branches of bankrupt Northern Rock in September 2007 won't want to have a penny above that threshold.

Savers with larger sums must reduce their risk by spreading it between different banks. But watch out, that £85,000 limit only applies per banking licence.

Some institutions share a single licence, because they are owned by the same parent company. For example, The AA, Birmingham Midshires, Halifax and Saga all come under the Bank of Scotland licence. If you had, say, £50,000 with the AA and £50,000 with Halifax, you would only get £85,000 of protection. Read all | [Source: Yahoo! Finance] | Wednesday, March 27, 2013

Liechtensteins Erbprinz will Untertanen zum Sparen zwingen
Neue Töne aus dem «Ländle»: Der Liechtensteiner Erbprinz hat das Parlament in seiner Thronrede zum Sparen ermahnt. Die neue Legislaturperiode sei «entscheidend für die Zukunft des Landes».

Nikosia: Zyprer demonstrieren gegen Beschlüsse
In Zypern gehen die Proteste gegen die Beschlüsse der Regierung weiter.

Cyprus to Bring in Weekly Cash Curbs
BBC: Cyprus finance ministers are planning to impose a weekly limit on cash withdrawals, the BBC has learned.

The country's draft capital controls include export limits on euros and a ban on cashing cheques, says Newsnight economics editor Paul Mason.

In addition, fixed-term deposits will have to be held until maturity.

Cyprus's finance minister earlier confirmed that depositors with more than 100,000 euros could see 40% of their funds converted into bank shares.

But Michalis Sarris also said that Cypriot depositors with less than 100,000 euros in their accounts "will not be hit". » | Tuesday, March 26, 2013

Zypern-Methode: Moody's rechnet mit Euro-Rettern ab

SPIEGEL ONLINE: Die Rating-Agentur Moody's geht nach der Zypern-Rettung hart mit den Verantwortlichen der Euro-Zone ins Gericht. Deren Krisenmanagement sei stümperhaft gewesen, ihre Selbstsicherheit fehl am Platze. Das Antasten der Bankeinlagen könne sich als gefährlicher Präzedenzfall herausstellen.

London - Die Regierungen der Euro-Zone laufen nach Ansicht von Moody's Gefahr, sich bei der Bewältigung der Schuldenkrise zu überschätzen. Ihr Vorgehen bei der Zypern-Rettung sei stümperhaft gewesen, insgesamt wirke sich die dabei gewählte Strategie negativ auf die Kreditwürdigkeit der Mitglieder des Währungsraums aus. Dass die Sparer einen Beitrag zur Sanierung der Banken leisten müssen, könnte als gefährlicher Präzedenzfall aufgefasst werden, sagte Moody's-Experte Bart Oosterveld in einem Interview der Nachrichtenagentur Reuters.

Offenbar seien die Politiker auch nach ihrem ungeschickten Vorgehen im Fall Zyperns davon überzeugt, ein Übergreifen der Krise auf weitere Euro-Länder verhindern zu können. "Diese Zuversicht könnte fehl am Platze sein", warnte Oosterveld. So könnten auch die Anleger in anderen Schuldenstaaten der Euro-Zone aus Angst um ihre Ersparnisse ihre Konten plündern, weil sie - wie auch zahlreiche Analysten - davon ausgehen, dass das Beispiel bei künftigen Krisen Schule machen könne. » | fdi/Reuters/dpa | Mittwoch, 27. März 2013

One of the Nastiest and Most Immoral Political Acts in Modern Times
MAIL ONLINE: People who rob old ladies in the street, or hold up security vans, are branded as thieves. Yet when Germany presides over a heist of billions of pounds from private savers’ Cyprus bank accounts, to ‘save the euro’ for the hundredth time, this is claimed as high statesmanship.

It is nothing of the sort. The deal to secure a €10 billion German bailout of the bankrupt Mediterranean island is one of the nastiest and most immoral political acts of modern times.

It has struck fear into the hearts of hundreds of millions of European citizens, because it establishes a dire precedent.

If democratically elected governments are willing to impose outright confiscation of up to 40 per cent of balances over €100,000 upon depositors in Cyprus, then why not another such hit tomorrow — in Spain, Italy or, most plausibly, Greece?

This is the most brutal display since 2008 of how far the euro-committed nations are willing to go to save the tottering single currency. It shows that the zone’s crisis will run and run, to the grievous disadvantage of almost everyone except the Germans. » | Max Hastings | Tuesday, March 26, 2013

The Cost of Saving Cyprus
A bailout was approved to keep the island nation in the eurozone, but is it too high a price to pay?

Bank Of Cyprus To Cut Up To 40% Off Deposits Over €100,000
RT.COM: Depositors in the Bank of Cyprus, the biggest bank on the island, will reportedly lose from 30 to 40 per cent on their holdings above 100,000 euro as result of a bailout agreement which Cyprus and the troika of international backers signed on Monday.

Irish Radio is quoting the chairman of the Cypriot parliamentary finance committee, Nicholas Papadopoulos, who said that the levy of 30 per cent will be imposed on the deep-pocketed savers.

"I haven't heard a formal announcement about the haircut, but this is the figure I heard," he said.

Bloomberg reports an even bigger figure as it refers to two EU officials, who claimed that the losses would be no more than 40 per cent on uninsured depositors at the Bank of Cyprus. » | Monday, March 25, 2013

EU Officials Announcing New Cyprus Bailout Deal

Angela Merkel Says She's Pleased with Cyprus Bailout Deal

Savings could be raided across the Eurozone »

Cyprus Fallout: Moscow Accuses Euro Zone of Theft -- and Worse

SPIEGEL ONLINE INTERNATIONAL: Russia has sharply criticized the bailout deal for Cyprus, with Prime Minister Dmitry Medvedev accusing the EU of theft. Russian state television even likened the forced levy imposed on wealthy investors -- many of them Russian -- to the expropriation of Jews by Nazi Germany.

The verdict of Russian state television on Europe's effort to save Cyprus was damning. The last week "will enter the history books of the EU as a destructive one," said Dmitry Kiselev, the presenter of the popular news program Vesti Nedili on the Rossiya channel.

Kiselev heaped criticism on the forced levy to be imposed on bank deposits in Cyprus. He said the last time a Western European government proceeded so recklessly was when Adolf Hitler expropriated the Jews.

Nazi propaganda at the time described the money held by Jewish people as "dirty," said Kiselev. That was precisely how Europe was talking about Russian assets deposited in Cyprus, he added.

"The new world order is being founded against Russia, at Russia's costs and on the rubble of Russia," said a Rossiya correspondent from the Mediterranean island nation.

The Kremlin feels it has been sidelined in the tug-of-war over the Cypriot bailout, European Commission President José Manuel Barroso visited Moscow for talks last Friday, but just a few days later, Europe's new attempt to avert a financial meltdown in Cyprus has elicited fierce criticism from Moscow. » | Benjamin Bidder in Moscow | Monday, March 25, 2013

Cyprus Facing Ruin Regardless of Deal, Islanders Warn
THE SUNDAY TELEGRAPH: Cyprus may be on the verge of hammering out a deal to address its chronic debt crisis but many Cypriots fear that the island’s economy is destined for ruin regardless.


Nicos Anastasiades, the Cypriot president, and Michalis Sarris, his finance minister, are on their way to Brussels for emergency talks over a deal under which deposits of more than 100,000 euros in the Bank of Cyprus will be hit by a 20 per cent levy.

Deposits of more than 100,000 euros in other banks will be targeted by a four per cent forced levy.

Cyprus’s leaders are expected to submit to the drastic plan - which critics call daylight robbery - in return for a 10 billion euro bail-out loan to save the country from bankruptcy. While the deal may stave off immediate disaster, many Cypriots said the measures will shatter confidence in the island’s hugely profitable banking and financial services industry and lead to a massive exodus of investors, among them Russian tycoons and British retirees.

Islanders also fear that as the bank levies bite, businesses and big investors will have to start laying off staff, heralding high levels of unemployment.

Around 70 per cent of Cypriots are employed in the financial services and banking sector, a number that dwarfs the 20 per cent working in tourism.

“People are worried not just because they could lose their savings but because they could lose their jobs too,” said Ioanna Constantinou, 24, who works in the financial services industry in Nicosia, the Cypriot capital. » | Nick Squires, Nicosia | Sunday, March 24, 2013

Australia: Where the Good Life Comes at a Price

BBC: Australia has managed to come out of the global financial crisis without a recession. But as a result of its booming economy, the cost of living is extremely high.

It was the limes that finally tipped me over the edge.

In the sleepy Australian seaside village where my parents live, not that far away from several citrus orchards, I was in a supermarket staring at a sign:

Limes: $2.25.

Two Australian dollars, twenty-five cents.

That's £1.50 (US$2.30). Not for a bag. Not for a pair. Each. One lime cost £1.50. Infuriated, I stormed out of the shop, limeless.

"The country has lost it," I fumed to my mum and dad over dinner that night. "How can anyone afford to eat in this country?"

"Darling," my father replied. "Look around. People here are rolling in money. We live in an unbelievably wealthy nation."

And he is right. In the 12 years since I last called Australia home, it has changed. It was always the lucky country, blessed with fertile land, abundant sunshine and plentiful natural resources.

Now, we are more than lucky. We are rich. Bloody rich. So rich that no-one blinks an eye at paying as much for a lime as some of our neighbours in Asia earn in a day. » | Madeleine Morris, BBC News, Australia | Sunday, February 24, 2013

Cyprus Eyes 25 Percent Levy on Big Savers
THE DAILY TELEGRAPH: Cyprus was threatening to seize up to a quarter of the value of wealthy savers' bank accounts as part of a desperate bid to stave off financial meltdown.

As talks continued to prevent Europe's finance chiefs from pulling the plug on the country's stricken banks, the Cypriot government said it was considering a levy of 25 per cent on deposits of more than €100,000 held in accounts at the Bank of Cyprus, one of the island's most troubled lenders.

The fate of similar high-value deposits in other Cypriot banks has yet to be decided.

The move was among a package of measures designed to persuade eurozone officials to agree to a €10 billion bail-out deal over the weekend. The European Central Bank has said unless an agreement is reached, it will remove financial support for country's banks when they re-open this week, leaving them facing imminent collapse.

Late on Friday night, the Cypriot parliament also backed a revenue-raising levy of less than one per cent on bank deposits below €100,000 - a rate seen as fairer than the 6.75 per cent levy rejected by legislators last Tuesday.

However, the 25 per cent rate on high-value accounts at the Bank of Cyprus is likely to cause further ructions on the island, which has seen widespread protests in the last week. It is expected to particularly hit Russian investors, who make up the bulk of the Cypriot financial sector's high-value clients. » | Colin Freeman, in Nicosia, Graham Ruddick and agencies | Saturday, March 23, 2013

Eurozone's Mistakes Could Destroy Cyprus, Warns Former President
THE GUARDIAN: Widely respected ex-leader George Vassiliou says whole European system may suffer if corrective measures not taken


When George Vassiliou is worried that is a worrying thing. Widely seen as Cyprus's most effective president in modern times, the 82-year-old is now viewed, even by his enemies, as the voice of common sense.

Today, Vassiliou is so anxious about the state of the country he governed between 1988 and 1993 that he is worried saying anything at all will only make matters worse.

It's not just the partitioned island's membership of the European Union, which Vasilliou deftly negotiated back in 2004, that is now at stake, or the imminent threat of national bankruptcy. It's what happens next if Cyprus is to have a scintilla of a hope of restoring confidence in the financial services sector that, alongside tourism, underpins the tiny nation's economy.

"Cyprus is not just an island in the sun. We have developed a unique service sector which was based on confidence in the banking system," he told the Guardian.

"If that confidence is lost then you have nothing left. Everything that has been created will be destroyed, with formidable repercussions." » | Helena Smith in Nicosia | Friday, March 22, 2013

UK Faces Fitch Downgrade Over Debt Levels
THE DAILY TELEGRAPH: Britain's credit rating faces another downgrade in the next month after Fitch warned it is reviewing the country's "AAA" status in the wake of the Budget.

The agency warned that there is a "heightened probability of a downgrade" as it conducts a review of the rating by the end of April.

Fitch said its decision to put the UK on a "negative watch" was because Britain's debt will now be bigger than Chancellor George Osborne first forecast and is taking longer to bring under control. » | Andrew Trotman, and agencies | Friday, March 22, 2013

Troubled Cyprus Prompts Medvedev to Create Russia's Own Offshore Zone

RT.COM: While some Russian businesses are feeling the pinch in Cyprus, Prime Minister Medvedev has voiced the idea of offshore zones in Russia at a regular meeting of the government, where a state project to develop Russia's Far East was discussed.

"If there is so much fuss going on, may be we should think of creating a kind of zone of our own in the Far East. We have bunch of good places there -- Sakhalin, the Kuril islands," Medvedev said, referring to the ongoing economic turmoil in Cyprus.

Speaking about the project, Medvedev called the budget for it as "unprecedentedly big" -- more than $323 billion. The money will be mostly spent on transport infrastructure in the two remote regions.

Offshore catch of the day

In offshore zones non-residential companies are treated to a number of privileged rules and undergo light registration, licensing and taxation. The Bahamas and British Virgin islands are among such zones and local officials pay little interest in the activities of international companies. Dmitry Medvedev hopes, some of the money, parked there, would "move" to a Russian offshore region, if created.

Russia has a number of so-called offshore zones, or special economic areas with favorable tax legislation. The exclave region of Kaliningrad is one of them. Chukotka region and Republic of Kalmykia were also among the privileged areas which have had reduced taxation until 2004. » | Thursday, March 21, 2013

Emergency Legislation Looms as Moscow Refuses Aid to Cyprus
RT.COM: Cyprus was left face to face with its grave financial crisis and is due to adopt new emergency legislation to secure the EU bailout after Russia said it would not help.

Nicosia introduced emergency legislation in the parliament late on Thursday to secure a bailout deal with international creditors as the island state faces an ultimatum from the ECB to agree on the bailout by next week.

The parliament is to debate on the emergency legislation on Friday, as MPs say they needed time to consider the new legislation.

The bills presented include plans to recapitalize its banking sector, eight times the size of Cyprus’ €17 billion economy, and lay losses on big depositors. The finance minister and Cyprus Central Bank are granted emergency powers to introduce any restrictive measures on banking activities to stop money flooding out of the Cypriot banks when they reopen next week after 10 days’ holiday.

Cyprus Central Bank governor Panicos Demetriades told reporters Thursday that “the banking system needs restructuring otherwise it will go bankrupt and it needs to be done immediately.” » | Friday, March 21, 2013

VIDEO: Protests outside government building »

Russen verweigern Zypern weitere Finanzhilfen
HANDELSBLATT: Russland lehnt weitere finanzielle Hilfen für den Krisenstaat vorerst ab. Es gäbe kein Interesse an den Vorschlägen des zyprischen Finanzministers, so die Russen. Ein endgültiges Nein ist dies aber wohl nicht.

Moskau Russland verwehrt dem krisengeschüttelten EU-Mitglied Zypern vorerst neue Finanzhilfen. Es gebe kein Interesse an den Vorschlägen des zyprischen Finanzministers Michalis Sarris, sagte dessen russischer Amtskollege Anton Siluanow am Freitag der Agentur Interfax zufolge.

Regierungschef Dmitri Medwedew deutete nach einem Treffen mit EU-Kommissionspräsident José Manuel Barroso aber an, dass ein künftiges Engagement Moskaus nicht auszuschließen sei. Kommentatoren gehen davon aus, dass Russland durch eine Verschärfung der Krise auf Zypern hofft, am Ende doch noch billiger an Vermögenswerte des Inselstaates zu kommen. » | dpa | Freitag, 22. März 2013

End of an Era: Cypriot Financial Sector Faces Collapse
SPIEGEL ONLINE INTERNATIONAL: The disastrous financial situation in Cyprus is largely a result of the country's crumbling banks. For years, the island nation profited from its bloated financial sector, but now it will likely have to liquidate its two largest banks. In Nicosia, government leaders fear that could decimate the economy.

If Cyprus doesn't receive billions in foreign aid within a few weeks, the country will default by June at the very latest. But insolvency could come even sooner for the country's two largest banks. The Bank of Cyprus and Laiki Bank are only able to survive at the moment through emergency aid from the European Central Bank, which on Thursday threatened to cut off all liquidity on Monday if terms of a European Union bailout deal aren't finalized with the government in Nicosia.

The banks are actually the very core of Cyprus' problems at the moment. They are bloated, pumped full of Greek sovereign bonds and more or less already bankrupt. Without these banks, Cyprus wouldn't need to seek aid from the permanent euro bailout fund, the European Stability Mechanism (ESM). The banks' difficulties have destroyed Cyprus' reputation on the international financial markets and investors are no longer willing to lend to the country. » | Stefan Kaiser | Thursday, March 21, 2013

Europa bereitet sich auf den Zypern-Kollaps vor
DIE ZEIT: Es sieht immer mehr danach aus, als würde Zypern in die Staatspleite schlittern. Für die Euro-Zone wären die Folgen wohl beherrschbar – auf der Insel hingegen würde binnen Tagen das Chaos ausbrechen.

Der fünfte Tag der großen Krise der kleinen Mittelmeerinsel war ein seltsamer. Auf der einen Seite hieß es für die Regierungsvertreter in Europas Hauptstädten: warten. Warten auf den neuen "Plan B" aus Zypern, nachdem das erste Rettungspaket für die klamme Mittelmeerinsel so krachend gescheitert war. Ob die EZB und die Troika diese Pläne akzeptieren, war am Abend nicht klar.

Auf der anderen Seite herrschte hektische Betriebsamkeit. Denn mittlerweile hat sich die Lage rund um Zypern so zugespitzt, dass sich die Euro-Zone auf das Schlimmste vorbereitet: eine Pleite und einen Euro-Austritt des Landes. » | Von Martin Greive | Donnerstag, 21. März 2013

Whatever the Outcome in Cyprus, Crisis Raises Fear of Eurozone Flight
THE AUSTRALIAN: ATTEMPTS by the EU and the European Central Bank to resolve the debt crisis have repeatedly become the problem rather than a solution.

Cyprus needs up to about €18 billion ($22.5bn) to recapitalise its banks and for general operations including debt servicing. While small in nominal terms and well within the EU's resources, the amount is large relative to the country's gross domestic product of €18bn. The package proposed by the EU but rejected by Cyprus' parliament incorporates: privatisation of state assets, increases in corporate taxes (from 10 per cent to 12.5 per cent), withholding taxes on capital income (to 28 per cent ) and restructuring of existing bank or sovereign debt.

Most controversially, ordinary depositors will face a "tax" on bank deposits, amounting to a permanent writedown in the nominal value of their deposits. The levy will be 6.75 per cent on deposits of less than €100,000 and 9.9 per cent for those above that.

Labelled "a stupid idea whose time has come" by commentator Karl Whelan, the unprecedented writedown of bank deposits is expected to raise about €5.8bn.

The write-off reduces debt as well as the size of the required bailout package to €10bn to comply with the International Monetary Fund requirement of a sustainable debt level.

As in the case of last year's Greek debt restructuring, the ECB and other official lenders are unwilling to take losses on their exposure, requiring the depositors to take a haircut as Cypriot banks have limited amounts of subordinated or senior unsecured debt that could be written down.

Restructuring the sovereign debt of Cyprus is risky because under governing English law any attempt to restructure these while insulating official creditors from losses would invite litigation. » | Satyajit Das | The Australian | Friday, March 22, 2013

FINANCIAL TIMES: Cyprus targets big depositors in bank plan » | Michael Steen, Kerin Hope, Andreas Hadjipapas, Peter Spiegel and Charles Clover | Thursday, March 22, 2013

THE NEW YORK TIMES: Mood Darkens in Cyprus as Deadline Is Set for Bailout: NICOSIA — Under a European Central Bank threat to shut off crucial financing for banks in Cyprus without a rapid accord, members of Parliament gathered to vote Thursday on yet another revamped formula for securing an international bailout. » | Liz Alderman | Thursday, March 21, 2013

DIE PRESSE: Brüssel stellt Finanzdamm für Zypern auf: Die EU empfiehlt der Insel die Aufhebung des freien Geldverkehrs. Die Europäische Zentralbank will Nikosia nur noch bis Montag finanzieren. » | Michael Laczynski | Donnerstag, 21. März 2013

Cyprus Bailout Crisis: Panic Replaces Anger As Bankruptcy Looms
THE GUARDIAN: Locals speak of situation worsening 'by the hour' in descent far more rapid than Greece's

'It's worse than a war. At least in a war you know who your enemies are," said Thanassis Iracleous, standing behind a till as he discussed the escalating crisis in Cyprus. "On Friday they were our friends," railed the pharmacist, whispering the word "German" in the same breath. "The very next morning they were suddenly our enemies."

As wars go, the bespectacled Greek Cypriot is having a good one. Relatively speaking. On Thursday, six days into the island nation's worst economic debacle in decades, Iracleous was still accepting credit cards and customers were still walking through the doors of the chemist he runs in the heart of Nicosia. But it is not clear how long he will be able to keep this up.

That is more than can be said for most retailers in Cyprus, the latest frontline in the eurozone's ever bloody conflict of sovereignty and debt. With the country's solvency hanging by a thread in the wake of the Cypriot parliament's overwhelming rejection of the tough terms attached to financial rescue from the EU and IMF, panic has gradually replaced anger and the shock born of the brutal realisation that bankruptcy is no longer an abstract concept. » | Helena Smith in Nicosia | Thursday, March 21, 2013

Cyprus in Financial Crisis

Cyprus Looks to Russia for Aid

Cyrus: The Russian Connection

Public Can't Be Bluffed
HERALD SUN: THE Cyprus fiasco teaches a terrific - but often forgotten - lesson to every social planner of the Left.

That fiasco is the astonishing decision to steal up to 10 per cent from every bank deposit in Cyprus to help fund a bailout of that country's banks.

This overnight theft was a condition demanded by the new masters of Europe, the European Union and International Monetary Fund, to raise $8 billion towards its $12.5 billion bailout of Cyprus.

But Cypriots reacted with such fury that not one Cypriot MP dared back the plan and even the Cypriot President, who reluctantly struck the deal last week, dropped it "because (the people) think it is unjust".

The banks remained closed for days to stop a bank run by people who rightly realised their accounts were now overseen by thieves and the panic threatened to spread to other debt-crushed European countries.

Even in Australia, our markets plunged $30 billion for fear of what might happen next. As former Cyprus central bank governor Athanasios Orphanides rightly said: "To confiscate deposits is essentially sending a message that no one with deposits ... in a weak country, like Spain, should feel safe ..."

So here are the lessons for the Left. » | Andrew Bolt | Herald Sun | Wednesday, March 20, 2013

Cyprus and the Eurozone's Survival
BBC: One reason why the Cypriot bailout debacle matters - perhaps the main reason - is that it shows how far the eurozone is from the kind of solidarity which many believe essential to the currency union's long-term survival.

A simple solution to Cyprus's financial woes was on offer to eurozone governments. That would have been a 10bn euro direct injection of equity capital into Cyprus's weak banks by the European Stability Mechanism (ESM).

This would, in effect, have turned Cyprus's two biggest banks, Bank of Cyprus and Laiki, into the property of the entire eurozone; and it would have prevented the 10bn euros becoming an unsustainable liability of the financially overstretched Cypriot state.

This solution, of the ESM bypassing the balance sheets of national governments and directly recapitalising banks, was already rejected by finance ministers when a number of Spanish banks were close to collapse last year.

What was agreed for Spain is that up to 100bn euros would be lent to the Spanish state, for the purposes of strengthening its banks - with this 100bn euros, as it is drawn down, swelling the national debt.

But if eurozone finance ministers did not want to become direct shareholders in Cypriot banks, via the ESM, why didn't they replicate what they had done for Spain and simply lend what Cyprus's banks need to the government in Nicosia? » | Robert Peston | Wednesday, March 20, 2013

Cyprus Banks Shut until Tuesday amid Scramble for Plan B
BBC: Cypriot officials have said the country's banks, which were closed to prevent mass withdrawals, will remain shut until at least Tuesday.

On Wednesday afternoon the cabinet began an emergency meeting to discuss alternatives to an EU-IMF bailout deal rejected by parliament on Tuesday.

Germany says banks in Cyprus may never reopen if a bailout is not agreed.

Meanwhile, Cyprus' finance minister is in Moscow to seek help from Russia, which has large investments in Cyprus.

Finance Minister Michalis Sarris said after talks with Russian Finance Minister Anton Siluanov: "There were no offers, nothing concrete," but he added, "we're happy with a good beginning."

Talks are expected to continue in Moscow on Thursday.

Reports say the government is considering imposing capital controls to prevent funds leaving Cyprus when banks are reopened.

Monday 25 March is a scheduled bank holiday, and Thursday and Friday have also been declared bank holidays. The stock exchange also remains closed. » | Wednesday, March 20, 2013

Cyprus Turns to Moscow: Scenarios for a Russian Role in the Bailout

SPIEGEL ONLINE INTERNATIONAL: Cyprus on Tuesday rejected the terms of a bailout package offered by Brussels and is now turning to Moscow for help. Russian President Vladimir Putin may charge a very high price in exchange for aid for the nearly bankrupt euro-zone country.

The inhabitants of Limassol, Cyprus, sometimes like to call their city "Little Moscow" because of the number of Russian businesspeople residing there. Southern Cyprus is home to the holding companies of numerous Russian oligarchs. Now, because the parliament in Nicosia rejected the terms of the European Union's bailout package for the country, Cyprus' government is looking for assistance in Russia, a country from which countless billions have flowed into the Mediterranean island nation over the years.

Cypriot President Nicos Anastasiades spoke with Russian President Vladimir Putin on the phone on Tuesday evening. And Finance Minister Michalis Sarris arrived on Tuesday night in Moscow and began meetings on Wednesday. Sarris is negotiating with the Kremlin over possible Russian support, though the talks have produced little so far. The leaders of a state that is a member of both the EU and the euro zone is now turning to Russia for help. It would be hard to imagine a more uncomfortable situation for the Kremlin. » | Benjamin Bidder in Moscow | Wednesday, March 20, 2013

Cyprus Bailout: 'If the Russians Leave, the Island Will Be Destroyed'
THE INDEPENDENT: For many businesses, the wealthy expat community is the lifeblood of their local economy

As the drama unfolded in the parliament building in Nicosia, thousands of protesters assembled in nearby Lena Stylianou Square to express their disgust at the situation Cyprus now finds itself in. Chanting “Troika get out!”, the demonstrators were kept several hundred metres from parliament by riot barriers and lines of police, while on the other side of the line dozens of news crews and journalists were reporting on what was taking place inside.

Amid the crowds Marina, a 44-year-old housewife, said she wanted Cyprus to avoid retracing Greece’s footsteps: “We want a referendum, the government must fall and allow us to decide on what we want.” Her friends agreed. “Look at what happened to our neighbour [Greece], we don’t want to become like them.”

Kostakis, a 60-year-old public servant, also roundly rejected European help. “We prefer to help our country by lending our money straight to the state. They can return it in a few years with interest – it beats becoming a colony of the Troika.” » | Nathalie Savaricas | Nicosia | Tuesday, March 19, 2013

Chancellor George Osborne Joins Twitter on Budget day and Is Immediately Hit with a Wave of Abuse
THE INDEPENDENT: The new @George_Osborne account launched earlier today

Not content to simply suffer the scrutiny, ranting anger and mischief-making of the House of Commons, George Osborne has used Budget day to join Twitter - and has been immediately hit with a wave of insults.

Like an army of backbench hecklers, Twitter users subjected the Chancellor's new @George_Osborne account to a torrent of abuse, despite the fact he has currently posted only one tweet: “Today I'll present a Budget that tackles the economy's problems head on helping those who want to work hard & get on.” » | John Hall | Wednesday, March 20, 2013

Angst vor Pleite: Kirche will Zypern retten
SPIEGEL ONLINE: Die Krise auf Zypern vereint Staat und Kirche: Der Erzbischof des Landes bietet der Regierung das gesamte Vermögen zur Rettung an. Einem Bericht zufolge könnten die Banken bis kommenden Dienstag geschlossen bleiben.

Nikosia - Kirchengeld für die Rettung der zyprischen Banken? Das stellt das geistliche Oberhaupt der Insel zumindest in Aussicht. Die Kirche bietet dem Staat ihr gesamtes Geld an. "Die Kirche und die Klöster werden für die Rettung des Landes alles zur Verfügung stellen", sagte der zyprische Erzbischof Chrysostomos nach einem Treffen mit Staatspräsident Nikos Anastasiades am Mittwoch. Wie groß das Vermögen der Kirche ist, war zunächst nicht bekannt. » | yes/dpa | Mittwoch, 20. März 2013

Cyprus Turns to Russia after Parliament Rejects Levy on Bank Savings
THE DAILY TELEGRAPH: Cyprus turned to Russia for help on Tuesday night after the country's parliament overwhelmingly rejected a tax on the deposits of bank savers.


With protesters celebrating in the streets, the rejection of a draconian levy left a planned £8.5 billion eurozone bail-out to save the Mediterranean island in chaos.

The country's finance minister defied explicit warnings from Angela Merkel, the German chancellor, and left Cyprus for urgent talks in Russia.

Michael Sarris flew to Moscow to plead for aid, despite Mrs Merkel warning Cyprus not to enter into negotiations with Russia, raising the spectre of eurozone disintegration.

"The chancellor once again emphasised that the negotiations are to be conducted only with the troika (the European Union, European Central Bank and the International Monetary Fund)," said her spokesman.

Not a single Cypriot MP voted in favour of a eurozone rescue package that had been made conditional by Germany on the Cypriot government finding £5 billion to pay off its debts by raiding bank deposits, including the savings of up to 60,000 Britons.

Under the original eurozone deal at the weekend, Cyprus agreed to impose a levy of 6.75 per cent on bank accounts up to €100,000 (£85,000) and 9.9 per cent for larger deposits.

Despite a compromise proposal not to tax any bank deposit less than €20,000 (£17,000), the country's 36 MPs rejected a deposit tax that has rattled financial markets and threatened the island's future as an offshore banking haven for Russian investors, with 19 MPs abstaining from the vote.

"There can only be one answer: no to blackmail," Yiannakis Omirou, the speaker of the Cypriot parliament said. » | Bruno Waterfield, Brussels, Richard Spencer in Nicosia and Robert Tait in Limassol | Tuesday, March 19, 2013

Wütende Proteste in Zypern: Parlament stimmt gegen verhasste Zwangsabgabe
19.03.2013 - Das Parlament in Zypern hat die Zwangsabgabe für Bankkunden abgelehnt, auf den Straßen wird diese Entscheidung von wütenden Demonstranten gefeiert.

SPIEGEL ONLINE: Parlamentsabstimmung: Zyperns Bürger bejubeln "Nein" zur verhassten Zwangsabgabe – Jubel in Nikosia - und antideutsche Töne: Das Parlament in Zypern hat die Zwangsabgabe für Bankkunden abgelehnt, auf den Straßen wird die Entscheidung gefeiert. Wie aber will das Land jetzt den geforderten Eigenanteil am EU-Rettungspaket aufbringen? » | Aus Nikosia berichtet Nicolai Kwasniewski | Dienstag, 19. März 2013

LE MONDE: Chypre : le Parlement rejette le plan de sauvetage – Le Parlement chypriote a rejeté mardi le plan de sauvetage européen pour l'île après le tollé provoqué par la taxe sans précédent sur les dépôts bancaires qui y est prévue. Trente-six députés ont voté contre, 19 se sont abstenus – tous du parti Disy, du président conservateur Nicos Anastasiades. Le plan n'a obtenu aucun vote positif. » | Le Monde.fr avec AFP | mardi 19 mars 2013

Cyprus Bailout Plan Rejected: What Happens Now?
March 19 (Bloomberg) -- Cyprus's parliament rejected an unprecedented levy on bank deposits, dealing a blow to European plans to force savers to shoulder part of the country's bailout in a standoff that risks renewed tumult in the euro area. Sara Eisen reports on Bloomberg Television's "Bottom Line." (Source: Bloomberg)

What Does Cyprus's Financial Crisis Mean for the Eurozone?
As the government in Cyprus struggles to pass a controversial bailout plan through parliament, the Guardian's economics editor Larry Elliott discusses how the crisis might affect the small Mediterranean country, and Europe as a whole. He asks whether the financial crisis may become a Lehman Brothers moment for the eurozone

Darling: Cyprus Savings Raid Could Trigger Bank Runs Across Europe
THE DAILY TELEGRAPH: Bank runs and financial panic could spread across Europe after Cyprus proposed raiding people's savings for a new bail-out, Alistair Darling has said.

The former Chancellor said Cyprus is doing "everything you should not do" after the tiny country decided to seize around 6.75 per cent from smaller deposits and almost 10 per cent from larger ones.

The country is currently deciding whether to make richer savers pay a bigger proportion of the bill but Mr Darling said the whole idea of taking money from ordinary savers is dangerous.

He said EU should not be letting Cyprus "blow apart" the principle of protecting deposits under €100,000, as people will start pulling their cash out of banks if they fear this elsewhere.

"It seems to me to make it more likely that if you’re a saver in Spain or Italy, if you have a sniff of the EU or the IMF coming your way you’ll take your money out and you’ll get a run on the bank," he told BBC Radio Four's Today programme.

"So what they’re doing is everything you should not do when you’re trying to solve a problem like this." » | Rowena Mason, Political Correspondent | Tuesday, March 19, 2013

Russians Prepare to Withdraw from Cyprus

Zypern: So gefährlich ist die Zwangsabgabe
SPIEGEL ONLINE: In der Euro-Krise ist die Angst wieder da: Die internationalen Gläubiger haben Zypern eine Zwangssteuer auf Sparguthaben verordnet. Investoren und Politiker fürchten Auswirkungen auf Banken in ganz Europa.

Hamburg - Ein Schock geht durch Europas Finanzsystem - ausgelöst vonZypern, einem kleinen Staat am Rande der Währungsunion. Erstmals in der Geschichte der Euro- und Finanzkrise sollen nicht mehr nur die europäischen Steuerzahler, Aktionäre oder private Gläubiger für die Probleme eines Landes und seiner Banken zahlen, sondern die Bankkunden. Sie sollen über eine einmalige Steuer an den Kosten der Rettung beteiligt werden. Das gab es so noch nie.

Entsprechend heftig sind die Reaktionen an den Finanzmärkten: In ganz Europa brachen am Montag die Kurse von Bankaktien ein. Zu den größten Verlierern gehörten Institute von Krisenländern wie die spanische Bankia, die zweitweise um mehr als acht Prozent abstürzte. Aber auch die Aktie der Deutschen Bank verlor zwischenzeitlich fast vier Prozent. Investoren flüchteten in vermeintlich sicherere Anlagen wie deutsche Staatsanleihen oder Gold .

Auch Experten sind schockiert. Der amerikanische Nobelpreisträger Paul Krugman spricht von einer "gefährlichen Lösung" und warnt vor "Ansteckungsgefahren". Die Sparer in Ländern wie Griechenland und Italien würden geradezu aufgefordert, ihr Geld von den Banken abzuziehen. Der deutsche Wirtschaftsweise Peter Bofinger schlägt im Interview mit SPIEGEL ONLINE Alarm: "Europas Bürger müssen nun um ihr Geld fürchten." » | Von Stefan Kaiser | Montag, 18. März 2013

Fears Emerge Over Impact of Cyprus Bailout
THE WALL STREET JOURNAL: The Cypriot decision to tax bank depositors EUR5.8 billion as part of a bailout deal with the euro zone has broken a "taboo" and risks a "complete loss of confidence in the financial system."

Over the weekend, it emerged that Cyprus would issue a tax on all Cypriot bank deposits, including savers who thought they were protected by a guarantee of savings below EUR100,000.

Previous sovereign bailouts in the euro zone have required investor participation, but this only involved bondholders. Holders of some Greek government bonds suffered haircuts in its restructuring last year, while Ireland's bailout in 2010 was contingent on holders of debt from nationalised Irish bank bonds suffering big losses.

Senior market participants said that the Cyprus bailout could prove to be dangerous.

Jon Mawby, senior portfolio manager at GLG Partners, said: "In the medium term this could be one of the key policy errors of the entire crisis, affecting the reaction functions of populations across Europe."

Chris Iggo, chief investment officer in global fixed income at Axa Investment Managers, said: "The potential for a complete loss of confidence in the financial system is huge."

He said the levy on deposits had broken "another taboo," pointing to the fact that depositors have never before been required to participate in the funding of a bailout package.

"It's thrown up in the air the natural ranking of creditors and you just don't know where that's going to land." » | Matthew Attwood | Financial News | Monday, March 18, 2013

BOSTON.COM: Cypriot Deposits Grab Shocks Savers Across Europe: NICOSIA, Cyprus — A plan to seize up to 10 percent of people’s savings in the small Mediterranean island nation of Cyprus sent shockwaves across Europe on Monday as households realized the money they have in the bank may not be safe. » | Menelaos Hadjicostis | Associated Press | Monday, March 18, 2013

Expats in Cyprus Furious at 'Legalised Theft' of Their Savings
Britons living in Cyprus are outraged by the Cypriot government's plans to impose a levy on bank deposits, with many desperately trying to withdraw their savings before tax is enforced.

Rettungspaket für Zypern: Merkel beruhigt die deutschen Sparer
FRANKFURTER ALLGEMEINER ZEITUNG: Zyperns Bankkunden müssen sich an der Rettung des Finanzsektors beteiligen, hat die Eurogruppe beschlossen. Für Kanzlerin Merkel ist das ein „Sonderfall“. Die Einlagengarantie für deutsche Sparer gelte weiterhin. In Zypern hat das Parlament unterdessen die Abstimmung über die Beteiligung der Konto-Inhaber abermals verschoben.

Nach der Zwangsabgabe auf zyprischer Bankeinlagen hat Bundeskanzlerin Angela Merkel die Einlagen-Garantie für deutsche Sparer erneuert. „Es ist das Merkmal einer Garantie, dass sie gilt. Und den Worten der Bundeskanzlerin und des damaligen Finanzministers ist nichts hinzuzufügen“, sagte Regierungssprecher Steffen Seibert am Montag in Berlin. Zypern sei ein Sonderfall. Unruhe unter Einlegern und Sparern in anderen Euro-Ländern sei daher nicht gerechtfertigt. » | Montag, 18. März 2013

Inside Story: The Cyprus Effect
How will the bank levy impact the country's economy and other eurozone members?

Cyprus President Defends Tax Bailout Decision
Cypriot President Nicos Anastasiades has addressed his country in an attempt to explain why he accepted the controversial bailout plan which includes taxing people's savings.

The Raid on Cypriots' Accounts Could Cause a Monetary Tsunami... Will Italy or Spain Be Next?
MAIL ONLINE: Until now it was felt that however bad the crisis in the euro area became, governments would move heaven and earth to protect ordinary bank depositors.

Over the weekend that Rubicon was crossed, as policymakers imposed an immediate tax on all deposits held in Cyprus, as part of a rescue package for the island’s failing economy.

This brutal decision by euroland finance ministers and the International Monetary Fund threatened a run on the whole financial system as depositors rushed to try to get their money out.

And the reverberations could reach beyond further Cyprus to hard-pressed euroland countries including Italy and Spain. Read on and comment » | Alex Brummer | Monday, March 18, 2013

Cyprus Rescue Breaks All the Rules
BBC: Reform of how to mend broken banks, which has been negotiated globally and in Europe since the Crash of 2007-8, has been based on two central principles.

First, that the savings of ordinary people should be protected, up to a high threshold - or 100,000 euros in the European Union for example.

And that financial institutions which lend to banks by buying their bonds should incur losses when banks are bailed out: bondholders should, to use the jargon, be bailed in, as part of resolution plans.

The logic behind these tenets is simple: financial institutions ought to be sophisticated enough and informed enough to assess the risks of lending to a bank, and therefore deserve to be punished when their judgement is awry; most of the rest of us can't possibly know if our high street banks are making reckless gambles. » | Robert Peston, Business Editor, BBC | Monday, March 18, 2013

Cyprus Bailout: An Expat's View
BBC: Cyprus' parliament is due to hold an emergency session to discuss a big bailout, which has angered the public.

It is by no means certain that the deal, reluctantly endorsed by the president, will get enough support to pass in parliament.

Under the bailout's terms, people in Cyprus with less than 100,000 euros in their accounts would have to pay a one-time tax of 6.75%.

Those with sums over that threshold would pay 9.9% in tax.

It could affect more than 25,000 British expats living on the island.

Sue Hall runs a wedding business in Cyprus. She spoke to BBC Breakfast from Paphos about how the situation was affecting her. Watch BBC video » | Monday, March 18, 2013