Showing posts with label EU bailout. Show all posts
Showing posts with label EU bailout. Show all posts
April 21, 2013
April 01, 2013
March 30, 2013
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
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
March 28, 2013
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
March 27, 2013
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
March 26, 2013
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
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
Savings could be raided across the Eurozone »
March 24, 2013
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
March 23, 2013
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
March 20, 2013
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
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
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
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
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
March 19, 2013
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
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