Welcome to European Tribune. It's gone a bit quiet around here these days, but it's still going.
Display:

Anger as Cypriots wake up to savings grab

Cypriots have reacted angrily to news that a one-off levy would be charged on all bank deposits as part of a €10bn bailout deal agreed in Brussels with international lenders.

(...)

But on the streets of Nicosia, hundreds of people gathered outside branches of Cyprus's co-operative banks, which normally open on Saturdays, after emptying ATM machines of cash at the start of a three-day holiday weekend.

"They've cheated us, they said they'd never allow a haircut on deposits," said Andreas Efthymiou, a taxi driver, referring to a government pledge to seek alternative ways of rescuing the island's banks.

Christos Pappas, a financial services worker, said: "I tried to transfer cash online as soon as I heard the news, but the account had already been blocked."

(...)

There were fears of a run on deposits by Russian, Greek and British account-holders who are estimated to control almost half the €68bn of deposits in the Cypriot system when the system reopens.



Wind power
by Jerome a Paris (etg@eurotrib.com) on Sun Mar 17th, 2013 at 09:52:36 AM EST
And:


UK to compensate troops hit by Cyprus bank tax

British military personnel and government officials in Cyprus would be compensated for the loss of their savings in the Cypriot bailout, chancellor George Osborne said on Sunday.

Mr Osborne said the situation in Cyprus was "extraordinary" and a warning to countries - including Britain - of the need to sort out the mess in the public finances and the banking system.

The chancellor woke on Sunday to see front-page headlines warning that up to 60,000 British savers could be hit in the grab on Cypriot bank accounts - one of the conditions of the £10bn EU bailout.

Britons are thought to have about £1.7bn of deposits in Cyprus; account holders will lose 9.9 per cent on all deposits over €100,000, with a separate 6.75 per cent levy on deposits below that level.

Mr Osborne said Britain was not part of Cyprus bailout and that Cypriot banks in the UK would not be included in the "bailout tax".

This could quickly have some pretty big geopolitical implications if countries like the Uk and Turkey (and Russia) are drawn in...

Wind power

by Jerome a Paris (etg@eurotrib.com) on Sun Mar 17th, 2013 at 12:09:33 PM EST
[ Parent ]
Surely the UK government would wish to recover the money it will have to pay out from the Eurozone countries that made this deal?

And surely some of the Russian depositors will complain to their government? Indeed, some of the depositors are likely influential figures in the Russian government.

by Metatone (metatone [a|t] gmail (dot) com) on Sun Mar 17th, 2013 at 12:13:32 PM EST
[ Parent ]
Britain used terrorism legislation against Iceland, why not against Cyprus?

Peak oil is not an energy crisis. It is a liquid fuel crisis.
by Starvid on Sun Mar 17th, 2013 at 12:22:04 PM EST
[ Parent ]
They should use it against Schäuble.

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 12:45:15 PM EST
[ Parent ]
The problem is that from the reports so far, it seems like Stasi 2.0's proposal - screw the non-senior, unsecured, non-guaranteed creditors - was actually a very sensible sort of proposal. Which was shot down by the Cypriot government, because they didn't want to lose their money laundering business.

Now, that reading makes me a little bit suspicious that there's something we're not being told. Because noway-nohow is Stasi 2.0 the most sensible guy in the room. You can lay odds on that almost no matter who else is in the room.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Sun Mar 17th, 2013 at 12:56:39 PM EST
[ Parent ]
In times such as these the next to worst definitely WILL NOT DO. Only the very worst option is acceptable.

"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 02:37:03 PM EST
[ Parent ]
Reuters: Germany would have protected insured deposits: Schaeuble (March 17, 2013)
The decision, announced on Saturday morning, stunned Cypriots and caused a run on cash points. Electronic transfers were stopped.

"It was the position of the German government and the International Monetary Fund that we must get a considerable part of the funds that are necessary for restructuring the banks from the banks owners and creditors - that means the investors," German Finance Minister Wolfgang Schaeuble told public broadcaster ARD in an interview.

"But we would obviously have respected the deposit guarantee for accounts up to 100,000," he said. "But those who did not want a bail-in were the Cypriot government, also the European Commission and the ECB, they decided on this solution and they now must explain this to the Cypriot people."



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 06:41:18 PM EST
[ Parent ]
Because noway-nohow is Stasi 2.0 the most sensible guy in the room. You can lay odds on that almost no matter who else is in the room.

FLIGHT OF THE CONCHORDS - THE MOST BEAUTIFUL GIRL IN THE ROOM LYRICS

Looking round the room,
I can tell that you
Are the most beautiful girl in the...room.
In the whole wide room
Oooh.

And when you're on the street
Depending on the street
I bet you are definitely in the top three
Good looking girls on the street
Depending on the street



It is rightly acknowledged that people of faith have no monopoly of virtue - Queen Elizabeth II

by eurogreen on Mon Mar 18th, 2013 at 05:01:44 AM EST
[ Parent ]
will the fact of their sizeable deposits in cyprus will be looked on favourably by putin's tax authorities?

they might want to let it go quietly.

cheaper in the long run...


'The history of public debt is full of irony. It rarely follows our ideas of order and justice.' Thomas Piketty

by melo (melometa4(at)gmail.com) on Sun Mar 17th, 2013 at 09:53:27 PM EST
[ Parent ]

A stupid idea whose time had come

A "one-off" often isn't. Calling something after "stability" isn't very stable. Saying that something is not a precedent usually makes it one.

(...)

The move by the Eurogroup will also hit resident and nonresident depositors alike. We see no sign of a floor to protect the savings of the average Limassol widow or Larnaca house-buyer. Carsten Schneider, a German politician of the SPD, hooted this month about burning "Russian black money". Rather less about the little people. What a socialist.

Still, note that it is what it is: a tax, not a haircut or a sign of banks blowing up. That's the whole point.

OK, you'd best start off by reading Pawelmorski, really. Meanwhile our headline comes from Karl Whelan. As for myself, I'm actually quite shocked that they've gone ahead and levied the depositors below the €100k level. And I thought I was jaded about a) the malleability of domestic law for eurozone states to carry out things like this b) the sheer scale of the problem, and the lack of easy options, for financing Cyprus' bank rescue.

The spin that this is about spanking money-launderers is rubbish. The 9.9 per cent levy will be the cost of doing business for the average CIS corporate shell, as Pawelmorski notes. More to the point, someone clearly balked at increasing the rate above 10 per cent for big-ticket depositors -- because why else distribute pain to small holders to make up for it. Someone has an eye on Cyprus somehow maintaining a future as an offshore banking centre.

Lots more analysis in this one, worth a read.

Wind power

by Jerome a Paris (etg@eurotrib.com) on Sun Mar 17th, 2013 at 12:15:49 PM EST
[ Parent ]
Excellent article with lots of good data, thanks.

Peak oil is not an energy crisis. It is a liquid fuel crisis.
by Starvid on Sun Mar 17th, 2013 at 12:46:03 PM EST
[ Parent ]
" a) the malleability of domestic law for eurozone states to carry out things like this"

All of this hasn't been tested in the courts yet.

by IM on Sun Mar 17th, 2013 at 02:41:28 PM EST
[ Parent ]


Friends come and go. Enemies accumulate.
by JakeS (JangoSierra 'at' gmail 'dot' com) on Sun Mar 17th, 2013 at 02:53:32 PM EST
[ Parent ]
More a Justice delayed is justice denied problem.
by IM on Sun Mar 17th, 2013 at 03:44:49 PM EST
[ Parent ]
You have more confidence than I do in the judicial system's ability to provide redress.

Practically, how are the < € 100k depositors going to get their money back if a court rules that the decision is void? In what currency are they going to get their money back, given that the Euro is odds-on to not exist by the time the court case is over?

This will be swept under the carpet, and any suits will accomplish nothing more than allow the gangsters to leverage the mistreatment of widows and orphans into a larger sum of hush-money.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Sun Mar 17th, 2013 at 03:54:41 PM EST
[ Parent ]

Display:

Top Diaries

Occasional Series