Cyprus would seek EU bailout money 'if necessary

[onlyone]

Cypriot deposit attractionhttps://www.ekathimerini.com/4 … 013_488426

Link does not work

[looney]

www.ekathimerini.com/4dcgi/w_articles … 013_488426

[the_very_man]

Some interesting thoughts on inflation past the gold bit…
ftalphaville.ft.com/2013/03/15/1 … -for-gold/

I’m not sure Kaminska is a good source on any of this, it’d be like quoting Krugman.
From what I can make out she has a political ideology that she tries to push (broadly leftist, socially inclined) and thinks only within this sphere, grabbing any sort of theory that backs up her position. That said, I probably do the same.

Thus Economics or ‘Economic theory’ as she so judiciously puts it, is largely faith based or at least politically malleable.
This MMT lark, with its ‘nominal GDP targeting’ as far as I can make out, is economic argot for ‘inflation’.
There has been a quite remarkable hijacking of language over the past few years; ‘government spending’ became ‘investment in public services’, ‘debt’ became ‘credit’, ‘killing innocent civilians’ became ‘collateral damage’ etc…etc…etc…
In the same vein ‘Austerity’ has now come to mean reduced increase in spending/borrowing rather than the vernacular meaning of ‘restriction’, implying contracting or reduction.
It no wonder people are confused by it all.

I dont have a political ideology concerning the current situation, which is why those who manifestly do have one are particularly irritating. (Kaminska, Krugman, Austrians, neo-libs)
I’m more with the Buddhists on this one; sometimes its best to do nothing.
Unfortunately, in the west (particularily on the left, I might add) we always seem to have to be seen to do something. Do anything.
Put a structure in place. Prop it up. Set up an enquiry. Announce an investigation. Write a new law.
It gets wearisome after a while.

I agree with your other point though, the Euro isnt going to disappear.

[dolanbaker]

bbc.co.uk/news/world-europe-21832187
Cyprus can amend the terms of a bailout deal that has sparked huge public anger and led to heavy cash withdrawals, German and European bank officials say.

President Nicos Anastasiades has been meeting MPs to discuss the terms, with a crucial debate and vote in parliament postponed until Tuesday.

Cyprus banks are closed and will remain closed until Thursday amid the crisis.

It looks like the ECB/EU will get their way on this as they originally made demands that were probably an “advance position”, one that they can drop back from when the protests are too hostile back to one that they really wanted in the first place.

By reducing the levy on small savers while increasing it on larger savers, they’ll achieve that while giving the Cypriot government a small “victory” to appease the population.

[dolanbaker]

bbc.co.uk/news/world-europe-21832187
Finance ministers from the eurozone have asked Cyprus to reduce the burden on small investors from a proposed levy on savings, linked to a bailout.

Plans for a one-off tax of 6.75% on savings up to 100,000 euros (£86,000; $130,000) have outraged Cypriots.

Banks in Cyprus are to remain closed until Thursday, as efforts to revise an international bailout package continue.

A parliamentary vote on the package has been repeatedly postponed, but is now expected on Tuesday.

The 10bn-euro bailout agreed with the EU and IMF demands that all bank customers pay a one-off levy.

Talk about changing the tune, this has really put a bat up someone’s nightdress!

[Carrot_and_stick]

Q: What happens in countries who need another bailout but there are no bondholders left (AKA Ireland, Greece and Portugal)?.

[Carrot_and_stick]

bbc.co.uk/news/world-europe-21832187
Cyprus can amend the terms of a bailout deal that has sparked huge public anger and led to heavy cash withdrawals, German and European bank officials say.

President Nicos Anastasiades has been meeting MPs to discuss the terms, with a crucial debate and vote in parliament postponed until Tuesday.

Cyprus banks are closed and will remain closed until Thursday amid the crisis.

It looks like the ECB/EU will get their way on this as they originally made demands that were probably an “advance position”, one that they can drop back from when the protests are too hostile back to one that they really wanted in the first place.

By reducing the levy on small savers while increasing it on larger savers, they’ll achieve that while giving the Cypriot government a small “victory” to appease the population.

The original proposals by the IMF/ECB was for only robbing large deposit holders. IF there is any victory it a PR spin victory.

[BoyRacer]

The Cyprus Deal Works Out Great For Putin And A Few Key Allies -> johnhelmer.net/?p=8751

Putin may be calculating that in pursuit of his “de-offshorization” policy, first announced to the two houses of the Russian parliament last December, it is easier said at home but done abroad. Putin had said then: “We need a comprehensive system of measures to reverse the offshorization of our economy. I am instructing the Government to make corresponding integrated proposals on this matter.”

If Deripaska and Abramov have not benefited from inside and advance knowledge, and are dutifully paying out their 10% to the betterment of , er, Cyprus, that would be a surprise.

source

Putin Blasts Cyprus Levy on Bank Deposits as ‘Unfair’ -> en.ria.ru/business/20130318/1800 … nfair.html

MOSCOW, March 18 (RIA Novosti) – Russian President Vladimir Putin believes the Cypriot government’s plans to impose a one-off levy on all bank deposits as part of a bailout deal to get much-needed loans from international creditors would be “unfair, unprofessional and dangerous,” Kremlin spokesman Dmitry Peskov said Monday.
Putin held a meeting Monday with administration staff and economic aides to discuss economic developments in the eurozone, Peskov said.

there is more

Russia’s Cyprus problem - -> blogs.ft.com/beyond-brics/2013/0 … s-problem/

The Russian lenders that have exposure to Cypriot-based borrowers include Gazprombank, Nomos, Sberbank, Alfa and most notably state-owned VTB, whose Cypriot subsidiary had a total of $13.8bn in assets and $374m in equity of $374 million at the end of 2011, Moody’s notes.

It is hard to overstate just how much exposure both Russian lenders and Russian companies have to the Cypriot banking sector. Here are some mind-boggling statistics from Moody’s:

• **Russian banks’ cross-board loans to Cypriot-based Russian companies totaled $30-40bn at the end of 2012 – that is equal to 15-20 per cent of Russian banks’ capital base in Russia, and 5-6 per cent of their gross corporate loans.
  **
• Russian corporate deposits in Cyprus totaled an estimated $19bn at the end of August – an amount that is equal to 7 per cent of all the corporate deposits in Russia, excluding current accounts.

While Russian companies aren’t directly affected by the downturn in Cyprus since much of the money is simply flowing in from Russia and right back out, problems could arise if, as mentioned, Cyprus puts a moratorium on external payments which could “block loan repayments to Russia, leading to some asset quality pressure”, Moody’s says.

there is more

It would appear some factions in the Russian kleptocracy had insider knowledge and others did not.

[BoyRacer]

https://www.youtube.com/watch?v=NmFo-LKHGY0

[BoyRacer]

Some thoughts on German politics and the saver’s tax in Cyprus -> creditwritedowns.com/2013/03 … yprus.html

As I wrote last July about bailout fatigue in the German electorate:

“If you are an average (West) German worker, you have witnessed the following in quick succession over a twenty-year period:

• A solidarity tax, payoff to Russia, and promise to join single currency as the price for re-unification
• A loss of the Deutsche Mark, the symbol of Germany’s post-war economic discipline and success
• A loss of the German economic miracle of the 1950-1980s and a soft depression due to a confluence of events including reunification, a property bubble, aging society, and poor demographics
• A breach of the Maastricht debt and deficit hurdles due to the soft depression
• A stagnation of wages and a loss of economic security and some of social safety net benefits with Hartz reforms because of soft depression
• A bailout of reckless German lenders pushing government debt to GDP well over 75% and now 81%
• Successive bailouts of other euro area members who have not gone through the same trauma and reform

“The average German worker feels like a cash cow being sucked dry by a quick succession of reforms and bailouts that take money out of her pocket. First it was for reunification, then for European integration, then to right the economy, then to bail out German banks, and finally to bail out the European periphery. Fatigue has set in.”

And let’s not forget, that while Germany has the lowest unemployment rates in a generation, under the surface deep problems have developed; for example, since the Hartz IV social program reform was established, 1 million people have been permanently relegated to it (link in German). This shows a fraying of the German social safety net as an example of the price German citizens have paid for the belt-tightening policies.

there is more

[snaps]

New proposal from the Cyprus finance ministry…

bbc.co.uk/news/world-europe-21842966

“bank depositors with savings of 20,000 euros (£17,000) or less would be exempt from a levy.”

[JohnnyTheFox]

New proposal from the Cyprus finance ministry…

bbc.co.uk/news/world-europe-21842966

“bank depositors with savings of 20,000 euros (£17,000) or less would be exempt from a levy.”

It doesn’t add up. The are proposing to do this but leave the other percentages unchanged. The gap has to be filled somehow.

[slasher]

saw this choice quote

“I withdrew €400 yesterday and the same today,” said Angeliki, a high schoolteacher who declined to give her full name. “I’m not so worried about a bank collapse but I’m furious that I’m going to lose some of my savings.”

ft.com/cms/s/0/33b7d382-8f2d … z2NtZJy6LA

[Open_Window]

From what I heard on snoozetalk reports are ATM’s stopped working because they had been cleared out but are being topped up and then cleared out again. It’s clear their is one singular calm priority in the minds of the Cypriots for now.

[Mossy_Heneberry]

Some thoughts on German politics and the saver’s tax in Cyprus -> creditwritedowns.com/2013/03 … yprus.html

As I wrote last July about bailout fatigue in the German electorate

:

“If you are an average (West) German worker, you have witnessed the following in quick succession over a twenty-year period:

• A solidarity tax, payoff to Russia, and promise to join single currency as the price for re-unification
• A loss of the Deutsche Mark, the symbol of Germany’s post-war economic discipline and success
• A loss of the German economic miracle of the 1950-1980s and a soft depression due to a confluence of events including reunification, a property bubble, aging society, and poor demographics
• A breach of the Maastricht debt and deficit hurdles due to the soft depression
• A stagnation of wages and a loss of economic security and some of social safety net benefits with Hartz reforms because of soft depression
• A bailout of reckless German lenders pushing government debt to GDP well over 75% and now 81%
• Successive bailouts of other euro area members who have not gone through the same trauma and reform

“The average German worker feels like a cash cow being sucked dry by a quick succession of reforms and bailouts that take money out of her pocket. First it was for reunification, then for European integration, then to right the economy, then to bail out German banks, and finally to bail out the European periphery. Fatigue has set in.”

And let’s not forget, that while Germany has the lowest unemployment rates in a generation, under the surface deep problems have developed; for example, since the Hartz IV social program reform was established, 1 million people have been permanently relegated to it (link in German). This shows a fraying of the German social safety net as an example of the price German citizens have paid for the belt-tightening policies.

there is more

Wasn’t it the French that wanted the euro currency in exchange for allowing German reunification to go ahead?

[jmc]

Some thoughts on German politics and the saver’s tax in Cyprus -> creditwritedowns.com/2013/03 … yprus.html

As I wrote last July about bailout fatigue in the German electorate

:

“If you are an average (West) German worker, you have witnessed the following in quick succession over a twenty-year period:

• A solidarity tax, payoff to Russia, and promise to join single currency as the price for re-unification
• A loss of the Deutsche Mark, the symbol of Germany’s post-war economic discipline and success
• A loss of the German economic miracle of the 1950-1980s and a soft depression due to a confluence of events including reunification, a property bubble, aging society, and poor demographics
• A breach of the Maastricht debt and deficit hurdles due to the soft depression
• A stagnation of wages and a loss of economic security and some of social safety net benefits with Hartz reforms because of soft depression
• A bailout of reckless German lenders pushing government debt to GDP well over 75% and now 81%
• Successive bailouts of other euro area members who have not gone through the same trauma and reform

“The average German worker feels like a cash cow being sucked dry by a quick succession of reforms and bailouts that take money out of her pocket. First it was for reunification, then for European integration, then to right the economy, then to bail out German banks, and finally to bail out the European periphery. Fatigue has set in.”

And let’s not forget, that while Germany has the lowest unemployment rates in a generation, under the surface deep problems have developed; for example, since the Hartz IV social program reform was established, 1 million people have been permanently relegated to it (link in German). This shows a fraying of the German social safety net as an example of the price German citizens have paid for the belt-tightening policies.

there is more

Wasn’t it the French that wanted the euro currency in exchange for allowing German reunification to go ahead?

Correct. Its a purely political currency with no foundation in financial reality. If Kohl had not bulldozed through German unification against everyone elses wishes there would have been no political need for the euro.

Of course it is all moot by this point. The euro as set up by treaty in 1992 and introduced in 2002 ceased to exist last year. Every single legal foundation principal has been breached by this stage. Four of its members are in de facto administration due to insolvency. Only five members could be considered to be conforming to the original financial rules and conditions of the euro when it was set up.

So when compared to the previous history of partial monetary unions the euro is in an advanced stage of dissolution. This stage can drag on for many years and its final termination will be due to a political crisis. There are no financial steps I’ve heard of so far, either micro or macro, that could return the euro to its original legal state of 2002. The problem with political train wrecks like these is that they can drag on for a very long time. Decades.

[JohnnyTheFox]

[Vaert]

[Mossy_Heneberry]

Correct. Its a purely political currency with no foundation in financial reality. If Kohl had not bulldozed through German unification against everyone elses wishes there would have been no political need for the euro.

Of course it is all moot by this point. The euro as set up by treaty in 1992 and introduced in 2002 ceased to exist last year. Every single legal foundation principal has been breached by this stage. Four of its members are in de facto administration due to insolvency. Only five members could be considered to be conforming to the original financial rules and conditions of the euro when it was set up.

So when compared to the previous history of partial monetary unions the euro is in an advanced stage of dissolution. This stage can drag on for many years and** its final termination will be due to a political crisis.** There are no financial steps I’ve heard of so far, either micro or macro, that could return the euro to its original legal state of 2002. The problem with political train wrecks like these is that they can drag on for a very long time. Decades.

As this is one of the factors that can lead to hyperinflation.

[JohnnyTheFox]

Apparently the Cypriot Finance Minister is in Moscow but has been dismissed while there at the Russians’ behest. They want to send a message to the EU that they forced an unacceptable deal on him and he has been dumped for accepting it. They are looking to go back to the drawing board. At the same time the Cypriot parliament is debating the deal but if they put it to a vote even the ruling party will abstain so there will be zero votes in favour.