Did they throw their pension fund at the problem like we did?
You can take money from people with no savings by taxing them to give the people who had savings their money back.
Or you can have the better off people with savings and bondholders/investors take a haircut.
Or you can mix both methods.
Moral hazard abounds either way. Personally I think it is grotesque to make someone with no savings pay money into someone elses deposit account via taxes or any other method. Had we taken this route back in 2008 it would have shaken things up and we would have had heads on plates and reforms. Our current path was the one of least resistance and worse it is a circular path.
The banks are closed officially until at least thursday and perhaps until next week with only residents being allowed to move or withdraw cash in March.
Russian gentlement with shades and leather jackets have made their displeasure known to Cypriot MPs. The longer the MPs leave this vote ( due tomorrow earliest) the more difficult the Russian gentlement with shades and leather jackets will make it for them and if they do not vote one way or another this week then they won’t vote at all.
Expect this one to run. They should have gotten it with over with today. Russian gentlement with shades and leather jackets are flying in as we speak under instructions from their Muscovite masters.
Capital controls thereafter. “Smell that? You smell that? That’s toast, son. Nothing else in the world smells like it. I love the
smell of toast in the morning. You know, this one time, we cooked these beans, for twelve hours… when it was over I went up there… we didn’t find one of ‘em, not one stinkin’ sausage. But, you know, that smell… that bangers and beans on toast smell… the whole eurozone… it smelled like… panic.”"
As Erik Nielsen of UniCredit argues, depositors in Cyprus have benefited from higher rates of interest than elsewhere in the eurozone:
“A Cypriot (or foreigner) who placed €100,000 in deposit in Cyprus in 2008 would by now have earned just around €15,000 more than if he had placed that money in Italy or Spain (and some €23,000 more than if he had placed it in Germany). Why does the Cypriot parliament (and many commentators) seem to suggest that a 15 per cent tax on such deposits (which would cover the bill also for the sub-€100,000 deposits) would be unreasonable now the banks are in trouble, but that German, Italian and other eurozone taxpayers should rather foot the bill? To me, the Cypriot position is simply unsellable in the rest of the eurozone.”
Putin is at least comfortable with how to use his credentials, not unlike like but different at the same time to how Geithner really helped our Ireland. The people of Ireland should send him a postcard.
Guess we’re all Magdalenes nows… gonna need a bigger fund!