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Yes, but still senior bondholders are untouched.

I think what happened was the following:

  • Merkel cannot get the bailout passed inthe German parliament
  • At the EU Council, Draghi tells the ministers that on Tuesday the ECB will pull the plug on the Cyrpiot banking system
  • Schaeuble offers Cyprus a deposit haircut or a euro exit
  • Anastassides replies: if Im going down, you're going down with me. Let's blow up EU deposit guarantees so there's a nice big panic.

Now the Troika has gone 'oh, shit' and are trying to convince Anastassides to backtrack. The Cypriot parliament vote that was to take place today has been postponed to tomorrow while the Troika descend on Cyprus to strongarm/bribe parliamentarians and Anastassides.

I distribute. You re-distribute. He gives your hard-earned money to lazy scroungers. -- JakeS
by Migeru (migeru at eurotrib dot com) on Sun Mar 17th, 2013 at 07:28:37 AM EST
[ Parent ]
That has the feel of truth about it. Blowing up deposit guarantees will wreck the eurozone


keep to the Fen Causeway
by Helen (lareinagal at yahoo dot co dot uk) on Sun Mar 17th, 2013 at 07:47:18 AM EST
[ Parent ]
Coppola Comment: Sowing the wind (16 MARCH 2013)
UPDATE: It appears that Cyprus came very close to actual default. This tweet from Yiannis Mouzakis shows that the ECB was preparing for collapse of Cyprus's two main banks:
@YiannisMouzakis

Local reports, the blackmail to #Cyprus peaked at 3.00am on Sat when Asmussen called Draghi, said ECB to prep for collapse of two Cyp banks

The timing of this is exquisite and it is hard not to conclude, as Mouzakis does, that it was done to put pressure on the Cypriot government in order to obtain a deal at any price, regardless of the consequences for the Cypriot economy and for its people. If that is true then it exposes the European Union for what it is rapidly becoming - a nascent totalitarian state.  


I distribute. You re-distribute. He gives your hard-earned money to lazy scroungers. -- JakeS
by Migeru (migeru at eurotrib dot com) on Sun Mar 17th, 2013 at 07:57:30 AM EST
[ Parent ]
Shall we have a live thread on this?

Wind power
by Jerome a Paris (etg@eurotrib.com) on Sun Mar 17th, 2013 at 08:45:34 AM EST
[ Parent ]
I could collate the sources quoted in this thread into a FP story...

I distribute. You re-distribute. He gives your hard-earned money to lazy scroungers. -- JakeS
by Migeru (migeru at eurotrib dot com) on Sun Mar 17th, 2013 at 08:49:18 AM EST
[ Parent ]
Yes please. I was going to grab your quotes. I guess the president's release, together with your guess as to what happened, would be enough or the front page itself, and the rest can go into the thread.

Wind power
by Jerome a Paris (etg@eurotrib.com) on Sun Mar 17th, 2013 at 08:57:31 AM EST
[ Parent ]
And thus the most crucial monetary decisions affecting the stability of the European sub-continent are reduced to the political needs of the current leadership of one nation - Germany. If war is too important to be left to the generals what then is monetary policy?

As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Sun Mar 17th, 2013 at 01:17:28 PM EST
[ Parent ]

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