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Cyprus bail-in thread (2)

by Jerome a Paris Tue Mar 19th, 2013 at 04:55:46 AM EST

Writing in El Pais, economist Jose Carlos Diez calls the Cyprus bail-in "an economic aberration" which "confirms there's no intelligent life in Europe". Paraphrasing Einstein, Diez says "two things are infinite: the cost of corralito and human stupidity”. The expression Corralito comes from Argentin[]a, where the government imposed Draconian measures in 2001 to stop a bank run. He also makes the point that the only country that put bondholders ahead of depositors in the 1980s was Romania, and Ceausescu ended up before a firing squad.
Via Eurointelligence (by email). Use as a new Cyprus bail-in thread.


Previous thread.

Display:
Does it seem to anyone else that the problem with ET's predictive capacity is that it's not pessimistic enough? Which is rather scary, given the thoughts of war that bang around here ...
by Colman (colman at eurotrib.com) on Tue Mar 19th, 2013 at 06:36:51 AM EST
That's why you have me here. :)

They tried to assimilate me. They failed.
by THE Twank (yatta blah blah @ blah.com) on Tue Mar 19th, 2013 at 08:57:02 AM EST
[ Parent ]
I'm not sure that anyone saw this one coming, but I have to wonder if Cyprus might be the first democratic government to be kicked to the curb.  This tax on accounts seems to have really touched a nerve, and my impression is the the Cypriot military is substantially larger (both in numerical and political terms) than their counterparts throughout the EU.  The corallito shows little hope of actually passing parliament.  Could this bring the government?  What happens then?  Unlike in Greece proper, the threat of being seen as weak is far more perilous with the Turks on the northern third of the island.

And I'll give my consent to any government that does not deny a man a living wage-Billy Bragg
by ManfromMiddletown (manfrommiddletown at lycos dot com) on Tue Mar 19th, 2013 at 10:42:19 AM EST
[ Parent ]
I'd say that we'd never allow the Turks capitalise on that, but frankly I'm beginning to think that there's no fuck-up our dear leaders can't manage.
by Colman (colman at eurotrib.com) on Tue Mar 19th, 2013 at 12:06:56 PM EST
[ Parent ]
Atrios: Must Be Deliberate
We are ruled by the stupidest fucking people on the planet.


guaranteed to evoke a violent reaction from police is to challenge their right to "define the situation." --- David Graeber citing Marc Cooper
by Migeru (migeru at eurotrib dot com) on Tue Mar 19th, 2013 at 01:13:18 PM EST
[ Parent ]
Will Cyprus Become Creditanstalt 2.0?  nc

But the officialdom isn't even taking minimal steps to limit the risk of contagion by making convincing-sounding, if empty, assurances. In fact, bizarrely, they are doing the reverse. For instance, the New York Times reported (hat tip Scott):

   Jeroen Dijsselbloem, the president of the group of euro area ministers, declined early Saturday to rule out taxes on depositors in countries beyond Cyprus.

Ed Harrison explains why the Germans and the Eurozone officialdom are going down such a dangerous path. Germany has kept squeezing the living standards of ordinary citizens and thinks everyone need to take that medicine, even though it is the wrong remedy in the wake of a big financial crisis:

   In short, the ideological view that predominates in German policy circles is that a lack of fiscal rectitude and a lax bank regulatory environment was the problem from the start and that fixing these things by further reducing wiggle room for mischief will reduce profligacy and prevent crisis. The data contradict this view considerably. The euro has been destabilising for a number of reasons I can't go into here but Spain is the perfect example of a country that never should have joined the euro zone. Low government debt and surpluses in Spain and Ireland stood in stark contrast to the soft depression and difficult finances in Germany. Moreover, the interest rate policy of the ECB, geared as it was to the slow growth core, produced negative real interest rates and credit bubbles in Spain and Ireland during the last decade. German banks piled in to those countries as prospects domestically stagnated. None of this matters politically though. There is no sense in telling political masters in Germany this because they see Germany's recent history as one of severe belt-tightening and an economic success that they believe is a direct result of that tightening. Extrapolating the German model Europe-wide is the goal...

(Additional links at title link.)

As to the title question the answer seems to be: If not it will not be for want of effort. But treating the entire EMU banking crisis as a German morality play might offer others, not blinded by the same morality, a means of profiting out of the situation that, at the same time, mitigates overall damage. The pathetic aspect of this is that LBOs in the €30 billion range are large but not all that unusual.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Tue Mar 19th, 2013 at 01:47:15 PM EST
[ Parent ]
Almost like they are trying to spark bank runs.

She believed in nothing; only her skepticism kept her from being an atheist. -- Jean-Paul Sartre
by ATinNM on Tue Mar 19th, 2013 at 02:01:54 PM EST
[ Parent ]
They're trying to use the threat of bank runs to coerce client states into self-destructive policies, but the Cypriots are willing to take down the entire edifice with them.

Samson bringing down the temple might be a good analogy except that Samson is associated with great power and Cyprus never had it.

A big part of the Cypriots' motivation is an exaggerated sense of national pride and a feeling of victimization as a result of the Turkish occupation and having been a British colony, both within living memory.

guaranteed to evoke a violent reaction from police is to challenge their right to "define the situation." --- David Graeber citing Marc Cooper

by Migeru (migeru at eurotrib dot com) on Tue Mar 19th, 2013 at 02:10:36 PM EST
[ Parent ]
At least we kept the Turks out

keep to the Fen Causeway
by Helen (lareinagal at yahoo dot co dot uk) on Tue Mar 19th, 2013 at 02:13:23 PM EST
[ Parent ]
Looks like it's time for Russia to broker a peace between Turkey, Greece and Cyprus.

guaranteed to evoke a violent reaction from police is to challenge their right to "define the situation." --- David Graeber citing Marc Cooper
by Migeru (migeru at eurotrib dot com) on Tue Mar 19th, 2013 at 02:14:46 PM EST
[ Parent ]
After that miracle they can move on to the Middle East.

They tried to assimilate me. They failed.
by THE Twank (yatta blah blah @ blah.com) on Tue Mar 19th, 2013 at 02:18:59 PM EST
[ Parent ]
Geopolitically there remain advantages to Russia for using Iran and Syria to disrupt US-Israeli consolidation of power in the Mid East. The costs are far outweighing any advantages they might obtain from Greek/Cyprus/Turkey tensions. Cyprus is home to many expat Russians, not just Russian Mafia, and is probably much more valuable as a source of hydrocarbons AND as a point of entry into the Euorzone, should it survive. Russia has a very different morality play concerning Germany and Putin is bright enough to play the German instigated moral blindness to Russia's advantage, though he may not succeed.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Tue Mar 19th, 2013 at 02:46:08 PM EST
[ Parent ]
He. "Samson bringing down the temple" was always one of my favorite metaphors and for a long time I assumed that he had died in the collapse, but he went on to judge over Israel, according to OT scripture. That amoker a judge! At least you would not expect too many 'letter of the law' decisions.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Tue Mar 19th, 2013 at 02:49:31 PM EST
[ Parent ]
Judges 16:27-31:
27 Now the temple was crowded with men and women; all the rulers of the Philistines were there, and on the roof were about three thousand men and women watching Samson perform. 28 Then Samson prayed to the Lord, "Sovereign Lord, remember me. Please, God, strengthen me just once more, and let me with one blow get revenge on the Philistines for my two eyes." 29 Then Samson reached toward the two central pillars on which the temple stood. Bracing himself against them, his right hand on the one and his left hand on the other, 30 Samson said, "Let me die with the Philistines!" Then he pushed with all his might, and down came the temple on the rulers and all the people in it. Thus he killed many more when he died than while he lived.

31 Then his brothers and his father's whole family went down to get him. They brought him back and buried him between Zorah and Eshtaol in the tomb of Manoah his father. He had led[d] Israel twenty years.

He died.
by gk (gk (gk quattro due due sette @gmail.com)) on Tue Mar 19th, 2013 at 02:55:51 PM EST
[ Parent ]
I should have checked Judges, it seems. My original memory was correct. Led astray by a secondary source.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Tue Mar 19th, 2013 at 03:01:31 PM EST
[ Parent ]
So the two of you are going to accept the heavily-redacted "just so" story as the literal truth because it's in the ... bible?

Long live secondary sources, I say.

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

by eurogreen on Wed Mar 20th, 2013 at 04:54:11 AM EST
[ Parent ]
Well, it IS a bible story. What has belief got to do with it?

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Wed Mar 20th, 2013 at 11:12:58 AM EST
[ Parent ]
No, what I mean is, what is your secondary source, and why do you consider it less reliable than the Bible?

(Assuming that the source has some basis in proto-historical Middle Eastern texts)

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

by eurogreen on Wed Mar 20th, 2013 at 12:08:23 PM EST
[ Parent ]
Same reason my memory of my high school textbook's coverage of the Illiad is less reliable on the subject of the stories of the Illiad than the original Greek.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Wed Mar 20th, 2013 at 12:16:12 PM EST
[ Parent ]
And good for them.  What earthly reason does Cyprus have for giving two damns about Deutsche Bank, et. al.?  Especially in the light of the real world results they can see happening in Greece.

She believed in nothing; only her skepticism kept her from being an atheist. -- Jean-Paul Sartre
by ATinNM on Tue Mar 19th, 2013 at 02:57:52 PM EST
[ Parent ]
Except that neither Turkey nor the UK are part of the Eurozone which is coordinating the latest assault...

Index of Frank's Diaries
by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Tue Mar 19th, 2013 at 03:53:43 PM EST
[ Parent ]
But the comparisons are being made: "this is as bad as 1974" and "we will not be a colony again".

So Germany joins the ranks of the villains in Cypriot mythology.

guaranteed to evoke a violent reaction from police is to challenge their right to "define the situation." --- David Graeber citing Marc Cooper

by Migeru (migeru at eurotrib dot com) on Tue Mar 19th, 2013 at 04:28:48 PM EST
[ Parent ]
Here's a thought.

All this funneling of wealth to the very few started with Raygun/Thatcher in late '70s/early 80's and it's been successful to date. Along comes the Grillini in Italy and they're the first crack in the dam. Everybody here is up on dam theory so the elites want to seal the crack before it gets bigger and everyone knows what that leads to. So what better than to spark an Italian bank run to derail democracy in Italy.

Just a thought.

They tried to assimilate me. They failed.

by THE Twank (yatta blah blah @ blah.com) on Tue Mar 19th, 2013 at 02:29:14 PM EST
[ Parent ]
What are they referring to? This?
It declared bankruptcy on May 11, 1931. This event resulted in a global financial crisis and ultimately the bank failures of the Great Depression.
Or that?
In early March 1938 Nazis threw the bank's Jewish president, Franz Rothenberg, from a moving vehicle (an incident he survived) and later demanded compensation from the imprisoned Baron Louis Rothschild for losses suffered by the Austrian state when the bank collapsed.


guaranteed to evoke a violent reaction from police is to challenge their right to "define the situation." --- David Graeber citing Marc Cooper
by Migeru (migeru at eurotrib dot com) on Tue Mar 19th, 2013 at 02:03:01 PM EST
[ Parent ]
Yes.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Tue Mar 19th, 2013 at 02:50:21 PM EST
[ Parent ]
Apparently ending its career in the Hypo bank scandal. Fitting.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Tue Mar 19th, 2013 at 02:53:27 PM EST
[ Parent ]
The Turkish economy is booming..... maybe it would be doing the Greek Cypriots a favor....  GDP growth in Turkey has been averaging about 8-9% over the past few years.

And I'll give my consent to any government that does not deny a man a living wage-Billy Bragg
by ManfromMiddletown (manfrommiddletown at lycos dot com) on Tue Mar 19th, 2013 at 03:27:24 PM EST
[ Parent ]
He also makes the point that the only country that put bondholders ahead of depositors in the 1980s was Romania, and Ceausescu ended up before a firing squad.
---------------
Yap...that's what happens when you make your people hungry...but they will never learn...

Science without religion is lame, religion without science is blind...Albert Einstein
by vbo on Tue Mar 19th, 2013 at 07:33:47 AM EST
I can't help but think that the "secret history" of foreign debt crises in 1980s Communist Eastern Europe should be some sort of warning here.  In many ways these regimes were brought down by a backlash against austerity.... It wasn't just Romania.  All the eastern bloc countries were heavily indebted to the IMF or World Bank by the 1980s.  And they had to adopt structural adjustment programs accordingly.  This all happened before the end of communism.

And I'll give my consent to any government that does not deny a man a living wage-Billy Bragg
by ManfromMiddletown (manfrommiddletown at lycos dot com) on Tue Mar 19th, 2013 at 03:34:51 PM EST
[ Parent ]
Do you know where one can read up on this?

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Tue Mar 19th, 2013 at 03:49:13 PM EST
[ Parent ]
Good question.  I'd like to know the answer too.  The couple of books I've seen and leafed through were laughable.  

She believed in nothing; only her skepticism kept her from being an atheist. -- Jean-Paul Sartre
by ATinNM on Tue Mar 19th, 2013 at 04:07:03 PM EST
[ Parent ]
Read upon on Solidarnosc in Poland.  The late 1970s strike actions centered on the differences in food provided the nomenklatura versus workers.  Sausage, or the lack of it, was a big issue.  To placate strikers, the government imported large amounts from Germany.  This was the start of a trend. There is a late 1980s article "Overview of East Europe's Debt: the evolution of creditworthiness in the 1980s."  Table 1 is missing, which was the real hidden treasure, but you can get the gist.  

And I'll give my consent to any government that does not deny a man a living wage-Billy Bragg
by ManfromMiddletown (manfrommiddletown at lycos dot com) on Tue Mar 19th, 2013 at 04:07:10 PM EST
[ Parent ]
I can tell you from my personal experience about Romania.I had some relatives there that I visited at the time of "austerity" that Ceausescu imposed on his people supposedly to pay Romania's debt ( that he may paid actually but at the huge price). Romanians were literally HUNGRY.They did not SEE meat for about decade or so.Generations of children did not it meat when they needed it to grow (I remember those skinny children of my relatives to this day). One could see their butcher's shops literally empty with just some pickles in it. Once we saw huge ques in front of the butchery  and then people coming out with just pork skin and a bit of fat on it, literally holding it in their hands not even folded in paper.They were lucky to have even that.As in Romania there was not private property (land) except a little bit around weekend houses for those wealthy enough to have them there was no way that people would have their own domestic animals to feed themselves. Those with weekend houses just had few chickens and they were lucky ones.All this in a country that was famous for it's agricultural products ( food). Prior to this austerity I remember going to Romania and having to eat and buy great food in restaurants and butcheries...
 I remember when Romanian custom officer told us " Why you are going to visit your relatives? They can't feed themselves let alone to feed you as guests". We told him that we are bringing food for them with us. I am not going to even talk about "infrastructure" in Romania in ruins...and horrific corruption everywhere.
Romanians were really angry but they couldn't do much against dictator. When we asked why they do not go in to rebellion  they told us about people that disappeared over night for talking against government...At the same time Ceausescu and his ilk enjoyed beautiful life...I was not surprised at all when they killed him and his wife...not at all...all tho I did not think it was a good idea at the time...
I haven't been there for decades and from what I hear Romania is a bit better now but probably in huge debt , unemployment is huge and there are still lot of poor people...there is a new class of rich scumbags ( like everywhere else)...
I wonder if there is a way out at all from this shit...around the globe...  

Science without religion is lame, religion without science is blind...Albert Einstein
by vbo on Tue Mar 19th, 2013 at 06:42:46 PM EST
[ Parent ]
This is interesting: Walking Back from Cyprus (working paper)
How might it have been different? Here is a sketch of an alternative approach had Friday's priority between insured depositors and bondholders been inverted:

  1. All insured depositors to be protected. Indeed, the public announcement of the bailout package would liberally sprinkle adjectives such as "sacred" and "inviolable" in front of the words "insured deposits" wherever they appear.

  2. Holders of deposits in excess of the insured €100,000 minimum would receive, at par, interest-bearing bank certificates of deposit for those excess amounts. Depositors would be given the option of taking CDs of, say, five or ten years' duration, with differing interest rates designed to encourage a longer stretch out. Also, to encourage a takeup of the longer dated CDs, the Government could offer a limited recourse guarantee on the ten-year CDs benefiting from a pledge of a portion of the Cypriot gas revenues that should come on line when those CDs mature. The CDs would be freely tradable and liquid in the hands of the holders.

  3. The maturity dates of all sovereign bonds would be extended by a fixed number of years, let's say five years. By our reckoning, this would reduce the total amount of the required official sector bailout funding during a three-year program period by about €6.6 billion.

The benefits? Terming out excess deposits will effectively lock in that funding to the banks for many years. The alternative (debiting 9.9 percent now and watching the balance of 90.1 percent get out of Dodge when the banks reopen) may easily require the bailout package to be reworked in a month's time.

Rescheduling the maturity dates of outstanding sovereign bonds -- with no haircut to principal or interest rate -- would avoid the need to have those maturities repaid out of official sector bailout funds. A principal extension of this kind is the most clement of the three tools in a sovereign debt restructurer's tool box, the other two are surgeon's saws labeled,  respectively, "principal" and "interest".



guaranteed to evoke a violent reaction from police is to challenge their right to "define the situation." --- David Graeber citing Marc Cooper
by Migeru (migeru at eurotrib dot com) on Tue Mar 19th, 2013 at 07:40:18 AM EST
It's fascinating how the people in charge seem determined to avoid any and all reasonable solutions.

Peak oil is not an energy crisis. It is a liquid fuel crisis.
by Starvid on Tue Mar 19th, 2013 at 08:00:14 AM EST
[ Parent ]
The anti-Russian money is chiefly the concern, and that's why they proscribed what they did.
by Upstate NY on Tue Mar 19th, 2013 at 09:55:59 AM EST
[ Parent ]
Best comment on this I've seen so far in the press.

"It's worse than an error, it's a mistake"

keep to the Fen Causeway

by Helen (lareinagal at yahoo dot co dot uk) on Tue Mar 19th, 2013 at 11:14:51 AM EST
[ Parent ]
Isn't the comparison with Argentina, unfair for Argentina? I mean they limited withdrawals, but I'm not sure they confiscated deposits. Did they?

The road of excess leads to the palace of wisdom - William Blake
by talos (mihalis at gmail dot com) on Tue Mar 19th, 2013 at 08:06:02 AM EST
Not entirely unfair.  The key difference here is that Argentina has an independent currency.

The corralito imposed withdrawal restrictions, however this was combined with the conversion of USD denominated accounts into Argentina pesos. Which meant that the purchasing power of the cash in those accounts collapsed as the country has come under speculative attack.

Prior to the corralito wealthy Argentines had made a business of taking on short term local debt (in pesos) backed up by local firms that they owned.  They would convert the cash to USD held in New York banks.  In the meantime the value of the peso was collapsing, which meant that the pesos that these jokers had converted to US dollars now more than covered the debt in Argentina, leaving them a tidy profit.  All the while loading local firms up with debt, and exacerbating the debt crisis by raising the peso cost of USD denominated debt.

This all can't happen in Cyprus, because the local currency is the euro. So in retrospect, what's happening in Cyprus is probably less damaging to the value of accounts than what happened in Argentina. Not to say that it's fair. As I understand it one of the reasons that the Germans wanted this policy was to avoid what they saw as a bailout of the Russians who've sit up shop in Cyprus.  

And I'll give my consent to any government that does not deny a man a living wage-Billy Bragg

by ManfromMiddletown (manfrommiddletown at lycos dot com) on Tue Mar 19th, 2013 at 08:32:26 AM EST
[ Parent ]
An update from Yves:

Update 8:30 AM: As I was drafting this post, Reuters released a story quoting President Anastasiades saying Parliament was likely to reject the revised bill. This is not what either Mr. Market or the Eurocrats anticipate. They assumed Anastasiades' Hank Paulson armageddon speech plus rational self interest (as in recognizing that blowing up the entire banking system would cost the citizenry more) would lead to sullen acceptance of the inevitable, just the way the Greeks (and to a lesser extent, the Portuguese and Spanish) have accepted being put on the rack. Apparently a fast seizure of funds is harder for the public to accept than a sustained grind-down into penury. From Reuters (hat tip Richard Smith):

    "The feeling I'm having is that the house is going to reject the bill," President Nicos Anastasiades told reporters. Asked why, he added: "Because they feel and they think that it is unjust and it's against the interests of Cyprus at large."

    Asked what he would do next, he said: "We have our own plans."

Unless Gazprom is about to ride in to the rescue, this is trying to make the best of an empty hand.

Update #2 It appears that there will not be enough votes for the revised bailout, either (in fact no-one's going to vote for it). Let's see what the trailed `Plan B' is, if the Eurogroup bailout isn't it. The Cyprus Finance Minister, Sarris, has resigned. There are rumours that the President has not accepted his resignation. Euro sharply weaker.



"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Tue Mar 19th, 2013 at 01:12:27 PM EST
Suggested stage direction: Exit Troika stage right pursued by a large Russian bear. (I can hope.)

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Tue Mar 19th, 2013 at 01:14:58 PM EST
[ Parent ]
On the mediterranean coast of Bohemia Russia?
by gk (gk (gk quattro due due sette @gmail.com)) on Tue Mar 19th, 2013 at 01:32:36 PM EST
[ Parent ]
New Europe: Barroso will visit Russia (March 19, 2013)
President Barroso commented, "i look forward to the College visit to Moscow and to the discussions with Prime Minister Medvedev and President Putin. Our intense and multifaceted relationship is well illustrated in our meeting agenda. Headway on the New Agreement, as well as cooperation in the fields of trade, energy and mobility should be among the most prominent topics. Russia is a strategic partner with whom we want to build more strategic trust. Next to the bilateral agreements we conclude, I hope this to be the main outcome of our meetings."

...

The visit of Barroso to Moscow, comes after the controversial Cypriot bailout which may include a plan to levy a tax on depositors in Cyprus. On 18 March, the spokesman of the Russian president said that Putin described the particular decision if taken, as "unjust, unprofessional and dangerous."

Meanwhile, Russia is also interested in potential natural gas resources discovered offshore Cyprus. According to Kostis Geropoulos, Gazprom has reportedly offered Cyprus a plan in which Russian gas monopoly will undertake the restructuring of the country's banks in exchange for exploration rights for natural gas in Cyprus'' exclusive economic zone.

Exeunt.


guaranteed to evoke a violent reaction from police is to challenge their right to "define the situation." --- David Graeber citing Marc Cooper
by Migeru (migeru at eurotrib dot com) on Tue Mar 19th, 2013 at 01:33:28 PM EST
[ Parent ]
German Chancellor Angela Merkel stressed in a phone call with the president of Cyprus that his country hold talks only with international creditors on its bailout deal and not third parties like Russia, a government spokeswoman said on Tuesday.

http://www.thelocal.de/politics/20130319-48617.html#.UUix0Tdytcy
by Katrin on Tue Mar 19th, 2013 at 02:47:14 PM EST
[ Parent ]
Swabian housewives know the advantage of buying their cabbage from the lowest price dealer to bolster their household economy.

It makes sense and TINA.

</snark>


She believed in nothing; only her skepticism kept her from being an atheist. -- Jean-Paul Sartre

by ATinNM on Tue Mar 19th, 2013 at 02:54:03 PM EST
[ Parent ]
Swabian housewives tend to be unkind to thieves who want to take deposits away. Has Merkel thought of that?
by Katrin on Tue Mar 19th, 2013 at 04:03:16 PM EST
[ Parent ]
Ha!  Good one.

She believed in nothing; only her skepticism kept her from being an atheist. -- Jean-Paul Sartre
by ATinNM on Tue Mar 19th, 2013 at 04:28:37 PM EST
[ Parent ]
Concluding a deal with Gasprom after receiving such a phone call from Merkel would be a big FU to her.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Tue Mar 19th, 2013 at 02:56:14 PM EST
[ Parent ]


guaranteed to evoke a violent reaction from police is to challenge their right to "define the situation." --- David Graeber citing Marc Cooper
by Migeru (migeru at eurotrib dot com) on Tue Mar 19th, 2013 at 04:41:49 PM EST
[ Parent ]
Or else, what?

guaranteed to evoke a violent reaction from police is to challenge their right to "define the situation." --- David Graeber citing Marc Cooper
by Migeru (migeru at eurotrib dot com) on Tue Mar 19th, 2013 at 04:39:34 PM EST
[ Parent ]
I'm going to LMAO if Russia ends up with a naval port on Cyprus.  For two hundred years it been a geo-political goal of Anglo-American foreign policy to keep Russia out of the Mediterranean.  


She believed in nothing; only her skepticism kept her from being an atheist. -- Jean-Paul Sartre
by ATinNM on Tue Mar 19th, 2013 at 03:04:08 PM EST
[ Parent ]
Don't forget the Russian base at Tartus in Syria.  I doubt that there is an existing harbor facility in Cyprus that could be developed into a Russian naval base anything more impressive that Tartus.

And I'll give my consent to any government that does not deny a man a living wage-Billy Bragg
by ManfromMiddletown (manfrommiddletown at lycos dot com) on Tue Mar 19th, 2013 at 03:55:23 PM EST
[ Parent ]
It's a bit unclear how much longer the Russians will have it
by Katrin on Tue Mar 19th, 2013 at 03:57:59 PM EST
[ Parent ]
That's why I believe a transatlantic lightning will hit Merkel. I know, hope springs eternal and so, but still... She has gone too far.
by Katrin on Tue Mar 19th, 2013 at 03:55:34 PM EST
[ Parent ]
A couple of years ago Obama said the eurozone needed a stimulus package and Merkel told him to go play with it.  I don't know how much leverage the US has when going up against the EU 1%.

She believed in nothing; only her skepticism kept her from being an atheist. -- Jean-Paul Sartre
by ATinNM on Tue Mar 19th, 2013 at 04:56:14 PM EST
[ Parent ]
In the Seventies the USSR had bases in Egypt, Syria and Algeria.
by de Gondi (publiobestia aaaatttthotmaildaughtusual) on Tue Mar 19th, 2013 at 05:55:31 PM EST
[ Parent ]
"Exeunt"  Pardon my Latin.  :-)

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Tue Mar 19th, 2013 at 07:42:24 PM EST
[ Parent ]
NY Times: Cyprus Set to Reject Bailout, Citing Tax on Bank Deposits (March 19, 2013)
Should the measure fail in Parliament, Mr. Anastasiades and his E.U. partners would have to return to the negotiating table. Analysts have also raised the possibility of bank runs and a halt in liquidity to Cypriot banks from the European Central Bank if the measure did not pass.

...

Cypriot banks were closed Monday for a bank holiday that has been extended through Wednesday.

The governor of the Cypriot central bank, Panicos Demetriades, warned lawmakers on Tuesday that as much as 10 percent of the €65 billion in deposits placed in Cypriot banks would flee the country as soon as banks' doors open Thursday morning, should Parliament approve the deposit tax.



guaranteed to evoke a violent reaction from police is to challenge their right to "define the situation." --- David Graeber citing Marc Cooper
by Migeru (migeru at eurotrib dot com) on Tue Mar 19th, 2013 at 01:15:33 PM EST
[ Parent ]
A rumour here (sorry, no cite) is that Russia will bail Cyprus on condition that it hand over a list of Russian depositors

keep to the Fen Causeway
by Helen (lareinagal at yahoo dot co dot uk) on Tue Mar 19th, 2013 at 01:42:51 PM EST
[ Parent ]
Putin's gotta be sure it's his gangsters and not the wrong sort hiding money.

Not that he's any worse than the idiots who rule all of us.  At least he's evil in a predictable way.

Be nice to America. Or we'll bring democracy to your country.

by Drew J Jones (pedobear@pennstatefootball.com) on Wed Mar 20th, 2013 at 09:23:13 PM EST
[ Parent ]
Twitter / OwenCallan: *CYPRUS BANK LEVY BILL DEFEATED ...

*CYPRUS BANK LEVY BILL DEFEATED WITH 36 VOTES AGAINST



Any idiot can face a crisis - it's day to day living that wears you out.
by ceebs (ceebs (at) eurotrib (dot) com) on Tue Mar 19th, 2013 at 02:21:09 PM EST
So, what now? They extend the bank holiday to Monday?

guaranteed to evoke a violent reaction from police is to challenge their right to "define the situation." --- David Graeber citing Marc Cooper
by Migeru (migeru at eurotrib dot com) on Tue Mar 19th, 2013 at 02:21:52 PM EST
[ Parent ]
Easter Monday?
by IM on Tue Mar 19th, 2013 at 02:24:01 PM EST
[ Parent ]
Orthodox calendar?

guaranteed to evoke a violent reaction from police is to challenge their right to "define the situation." --- David Graeber citing Marc Cooper
by Migeru (migeru at eurotrib dot com) on Tue Mar 19th, 2013 at 02:25:08 PM EST
[ Parent ]
Of course! Respecting the cultural traditions of Cyprus and so on.
by IM on Tue Mar 19th, 2013 at 02:27:16 PM EST
[ Parent ]
confirmation

Twitter / SkyNewsBreak: Cypriot Parliament rejects ...

Cypriot Parliament rejects plan to tax savers' bank accounts as part of bailout


Any idiot can face a crisis - it's day to day living that wears you out.
by ceebs (ceebs (at) eurotrib (dot) com) on Tue Mar 19th, 2013 at 02:30:02 PM EST
[ Parent ]
A small and select group of Serious North Western european bankers and german politicians will gather in a room and ask each other what they can do now their bluff has been called

keep to the Fen Causeway
by Helen (lareinagal at yahoo dot co dot uk) on Tue Mar 19th, 2013 at 02:30:22 PM EST
[ Parent ]
I love your folks use of euphemisms.

"Bank Holiday" ... sounds like all the buildings are being draped in party clothes with cheery hats and all. Why not call it what it is ... the banks refusing access to the cash of average citizens prior to stealing it outright.

"Haircut" ... doesn't that sound benign. Take a little off the top, trim the hairs growing out of my ears, and shave my balls while you're at it. Haven't had that done since I got a vasectomy in '76.

They tried to assimilate me. They failed.

by THE Twank (yatta blah blah @ blah.com) on Tue Mar 19th, 2013 at 02:37:01 PM EST
[ Parent ]
19 abstentions and no votes for.

That's how it's done.

guaranteed to evoke a violent reaction from police is to challenge their right to "define the situation." --- David Graeber citing Marc Cooper

by Migeru (migeru at eurotrib dot com) on Tue Mar 19th, 2013 at 02:36:32 PM EST
[ Parent ]
What is the legality of closing the banks without a (retroactive) approval from Parliament? Can someone now sue somebody?
by gk (gk (gk quattro due due sette @gmail.com)) on Tue Mar 19th, 2013 at 02:41:18 PM EST
[ Parent ]
Reuters reports that UK sent a plane-load of cash to
Cyprus for its troops in case cash-machines, debit cards
stop working (link)

One year to go !
by pi (etrib@opsec.eu) on Tue Mar 19th, 2013 at 03:10:31 PM EST
reported to be a Million in Cash

Any idiot can face a crisis - it's day to day living that wears you out.
by ceebs (ceebs (at) eurotrib (dot) com) on Tue Mar 19th, 2013 at 03:20:26 PM EST
[ Parent ]
Cyprus is small enough not to be really significant in economic terms for the Eurozone as a whole. (Let's treat the strategic significance of Cyprus giving gas exploration rights to Gazprom or a Mediterranean Naval port to Russia in return for a bail-out as a separate issue for now).

So the German bankers decide this is a good opportunity to demonstrate to all and sundry the consequences of not playing ball with your creditors. The ECB refuses liquidity. The banks have to limit/halt withdrawals (say to 20k Max)  because they cannot sustain the outflow of funds that would otherwise occur. The banks are declared insolvent and a liquidator is appointed. Bondholders/depositors are given shares in the banks in lieu of their investments over 20K and the banks re-open under new "ownership/management").

Russian "investors" lose their shirts. Some bigger businesses become illiquid and may have difficulty trading. Small businesses and individuals are generally ok with 20K working capital but don't trust the banks to put any more money in. A Mattress/cash economy emerges.  Works fine for small local businesses but business trading with other Eurozone countries cannot get credit and may have difficulty settling accounts with other Eurozone suppliers/customers. Cyprus may have to issue its own currency again but has difficulty getting it accepted by its trading partners. The larger economy grinds to a halt. The tourist industry almost collapses. Cyprus is effectively quarantined and "thirdworldised".

German bankers look on with some satisfaction because this will teach the Greeks, Italians, Spaniards et al just what will happen if they don't play by the rules. They are happy enough the Russians got burned, but may cut a deal with Putin to stop the aforementioned Gazprom or Naval Port scenarios. Nato threatens a blockade if Russia does try to set up a port in Cyprus. Europe is once again on the brink of war.

All of this may seem ridiculous when you consider how small Cyprus is in the larger scheme of things. And then you remember that WW1 started because of the murder of an obscure Archduke in Sarajevo.

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Tue Mar 19th, 2013 at 04:32:06 PM EST
Schäuble just appeared in an interview on ZDF.

@EUfiene

German Finance Minister Schäuble on #ZDF TV: "The business model of #Cyprus is no longer sustainable. Someone has to tell the Cypriots."


guaranteed to evoke a violent reaction from police is to challenge their right to "define the situation." --- David Graeber citing Marc Cooper
by Migeru (migeru at eurotrib dot com) on Tue Mar 19th, 2013 at 05:08:27 PM EST
[ Parent ]
I guess that this means that they will simply have to go out of business.  Contemplate that statement, and the idiocy of taking the nation as business metaphor to the extreme becomes rather apparent. Given their history, you would think that the Germans would be aware the danger this presents.

And I'll give my consent to any government that does not deny a man a living wage-Billy Bragg
by ManfromMiddletown (manfrommiddletown at lycos dot com) on Tue Mar 19th, 2013 at 05:12:48 PM EST
[ Parent ]
Rush transcript via Ron Patz:

@ronpatz

Schäuble: We regret the decision in Cyprus because #Cyprus itself asked for the rescue package
@ronpatz
Schäuble: We should not take a decision that doesn't make sense. Cyprus is bankrupt, and that's the fault of #Cyprus.
@ronpatz
Schäuble: The two big banks in #Cyprus are bankrupt and that has to be told.
@ronpatz
Schäuble: The banks in Cyprus are closed, and the 2 big banks only live on emergency support by the ECB. Without a rescue package...


guaranteed to evoke a violent reaction from police is to challenge their right to "define the situation." --- David Graeber citing Marc Cooper
by Migeru (migeru at eurotrib dot com) on Tue Mar 19th, 2013 at 05:13:47 PM EST
[ Parent ]
ZDF video of interview

guaranteed to evoke a violent reaction from police is to challenge their right to "define the situation." --- David Graeber citing Marc Cooper
by Migeru (migeru at eurotrib dot com) on Tue Mar 19th, 2013 at 05:22:02 PM EST
[ Parent ]
The interview starts with the following leading question: "Has the Cypriot parliament made a serious mistake which is dangerous also for the rest of the Eurozone?"

guaranteed to evoke a violent reaction from police is to challenge their right to "define the situation." --- David Graeber citing Marc Cooper
by Migeru (migeru at eurotrib dot com) on Tue Mar 19th, 2013 at 05:23:04 PM EST
[ Parent ]
Second question: "And if that doesn't happen, if Cyprus out of its own decision goes into bankruptcy, how dangerous is it for the rest of the Eurozone?"

guaranteed to evoke a violent reaction from police is to challenge their right to "define the situation." --- David Graeber citing Marc Cooper
by Migeru (migeru at eurotrib dot com) on Tue Mar 19th, 2013 at 05:26:08 PM EST
[ Parent ]
Would the EU even allow a sovereign default?  

This sits a bad example for the Greeks, Portuguese, Spanish, and Italians who, after all, must take their lashes in stride.

Expulsion from the eurozone seems likely if the Cypriots try this, which threatens capital flight as it opens the door to currency devaluation.

And I'll give my consent to any government that does not deny a man a living wage-Billy Bragg

by ManfromMiddletown (manfrommiddletown at lycos dot com) on Tue Mar 19th, 2013 at 05:38:06 PM EST
[ Parent ]
@cigolo
Schaeuble Says Euro Zone Is Much More Stable Than Previously
To be fair, he doesn't mean it's more stable after than before the Cypriot parliament vote. He means during the last three years measures have been taken to ringfence risks.

guaranteed to evoke a violent reaction from police is to challenge their right to "define the situation." --- David Graeber citing Marc Cooper
by Migeru (migeru at eurotrib dot com) on Tue Mar 19th, 2013 at 05:31:29 PM EST
[ Parent ]
Too many moving parts. I don't see this as a scenario leading to interstate war. (At least with Russia.  The Turks I think might be inclined to see this as the time to act.)

I do have to wonder how many of these Russian "investors" in are less than legitimate, aka siloviki. This could make things interesting as I think we can all agree pissing off the Russian security forces is a not so great idea.

And I'll give my consent to any government that does not deny a man a living wage-Billy Bragg

by ManfromMiddletown (manfrommiddletown at lycos dot com) on Tue Mar 19th, 2013 at 05:10:37 PM EST
[ Parent ]
Why would the Turks put their current boom at risk? What have they to gain from the Cypriot crisis - other than a  possible legitimation of their de facto control of northern Cyprus?


Index of Frank's Diaries
by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Tue Mar 19th, 2013 at 05:15:22 PM EST
[ Parent ]
Turkey is the most westernized country in the Middle East, does the EU (and more importantly, the US) want to alienate it over Cyprus?  The current Justice and Development government has faced problems, being seen as Islamist rather than nationalist, which led to a coup plot just last year.  Supporting a move into Varosha on the part of the Turkisk Cypriots would be a powerful signal in domestic politics that the current Turkish government has the nationalist credibility, pulling the army back on its criticism.  This is in fact how the 1974 invasion happened, the government trying to impress the military that it was sufficiently nationalist.

And I'll give my consent to any government that does not deny a man a living wage-Billy Bragg
by ManfromMiddletown (manfrommiddletown at lycos dot com) on Tue Mar 19th, 2013 at 05:33:50 PM EST
[ Parent ]
So the Turks develop a semi-derelict suburb they have formally occupied for 30 years.  Who cares? (Other than Greek Cypriots who clearly don't matter in the larger scheme of things).

Index of Frank's Diaries
by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Tue Mar 19th, 2013 at 06:13:34 PM EST
[ Parent ]
Turkey would have to take the momentous decision to leave NATO in order to move in Cyprus. The move would bring it into direct conflict with a major NATO member, Britain, that has troops in Cyprus. Isolation from NATO would probably result in Turkey coming within the Russian sphere of influence, and/or seeking an alliance with Russia over Cyprus. Such a sea-change in the power balance of Eastern Europe/Mediterranean/Near East would not leave the US dithering about not wishing to piss Turkey off.

As for the EU, it is irrelevant. It has always been defined as an economic project, and has the greatest difficulty in creating the beginnings of a common diplomacy and defence dimension.

by afew (afew(a in a circle)eurotrib_dot_com) on Wed Mar 20th, 2013 at 03:26:28 AM EST
[ Parent ]
Why? They stayed in NATO despite the original Cyprus invasion. Why would it be different this time?
by gk (gk (gk quattro due due sette @gmail.com)) on Wed Mar 20th, 2013 at 04:32:43 AM EST
[ Parent ]
One contextual reason was the Cold War, that made Turkey an even more invaluable ally than now.

More precisely concerning Cyprus, the Turkish invasion was seen as a reaction to a coup by the government of the Greek colonels. A move by Turkey now, on the other hand, could only be construed as opportunism.

by afew (afew(a in a circle)eurotrib_dot_com) on Wed Mar 20th, 2013 at 05:30:39 AM EST
[ Parent ]
But a Turkish move now wouldn't be remotely on the same scale, and with the possibility of Russian interest in Cyprus, Turkey may be valuable again.
by gk (gk (gk quattro due due sette @gmail.com)) on Wed Mar 20th, 2013 at 05:40:45 AM EST
[ Parent ]
True, but then we're saying Turkey wouldn't be making a move of any huge significance anyway.

I admit I'm quite unsure of what Russia's attitude would be.

by afew (afew(a in a circle)eurotrib_dot_com) on Wed Mar 20th, 2013 at 05:56:59 AM EST
[ Parent ]
The geography of the problem suggests that Russia's interest would be, in order:

  1. Poaching current NATO members who might want to become or end up becoming ex-NATO members.

  2. Opposing Turkish opportunism in the Aegean, unless this conflicts with the first objective.

- Jake

Friends come and go. Enemies accumulate.
by JakeS (JangoSierra 'at' gmail 'dot' com) on Wed Mar 20th, 2013 at 12:20:27 PM EST
[ Parent ]
Note that Cyprus is not a member of NATO. They voted to join last year, but the (then) President was against. The new President is in favour, so it might be a case of the much milder desire to discourage them from joining NATO, and thus turning the British base over to the US. (Assuming that Turkey approves them joining in the first case).
by gk (gk (gk quattro due due sette @gmail.com)) on Wed Mar 20th, 2013 at 04:37:04 PM EST
[ Parent ]
Erdogan and the Turkish government are in the process of negotiating a historic compromise with the Oçalan and the PKK. This is huge, and involves what the government itself calls "democratization efforts".

This is highly displeasing to Turkish nationalists, and probably to the military as a whole.

Though one would hope that this would make it the wrong time for any military adventurism with respect to Cyprus, it might I suppose swing the other way : throw them a bone...

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

by eurogreen on Wed Mar 20th, 2013 at 05:16:41 AM EST
[ Parent ]
Turkey right now assist Syrain rebels along the border - exactly how much and with what is unclear. Does this please the military? How would it affect capabilities in Cyprus?

Sweden's finest (and perhaps only) collaborative, leftist e-newspaper Synapze.se
by A swedish kind of death on Wed Mar 20th, 2013 at 05:27:11 AM EST
[ Parent ]
Turkey is the most westernized country in the Middle East

Turkey is far from being the most "oriental" or backward country in Europe.

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

by eurogreen on Wed Mar 20th, 2013 at 05:07:06 AM EST
[ Parent ]
It was interesting visiting Istanbul.  Being an American, one always figures that major ethnic divides MUST be racially based, somehow.  I know that it wasn't true, but it's a gut feeling that won't go away.  Seeing that the Turks of Istanbul were, in fact, white people, was interesting.
by Zwackus on Wed Mar 20th, 2013 at 07:57:30 PM EST
[ Parent ]
Why not just stop at Gazprom gets an exclusive contract to exploit Cyprus' gas reserves; not enough to go to war over. Maybe Greece and Spain then discuss ways they can do business with Russia. Gets complicated. Germany can lose power very quickly from overplaying its hand.

Hey, Grandma Moses started late!
by LEP on Tue Mar 19th, 2013 at 05:48:53 PM EST
[ Parent ]
The US invaded Iraq in large part because it wanted control of the Oil for it's corporations. I know it doesn't make economic or military sense, nor even in terms of any reasonable calculus of national interests, but if a few very powerful corporations want control of a gas field...

Index of Frank's Diaries
by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Wed Mar 20th, 2013 at 08:31:05 AM EST
[ Parent ]
But Israel and Cyprus have an agreement for joint exploration of their adjacent fields. If Russia moves in, this might be regarded as a threat to Israel's security. Since Israel security is the same as US security, things may indeed get complicated.
by gk (gk (gk quattro due due sette @gmail.com)) on Wed Mar 20th, 2013 at 08:48:21 AM EST
[ Parent ]
While the responses to this are very sensible and sane, they neglect that our political leaders seem to be neither.

The question really should be what series of idiot moves could bring this sort of worst case scenario about. On current evidence, that's what they'll do.

by Colman (colman at eurotrib.com) on Wed Mar 20th, 2013 at 06:26:48 AM EST
[ Parent ]
  1. Troika makes continued operation of the periphery clearing system conditional upon adoption of dead-end austerity policy.

  2. Periphery countries remain in Euro, and either adopt dead-end austerity policy or have their clearing infrastructure crashed. Either way, they end up as failed states. 1930s-style Angry Parties take power, promising to keep the country safe from Foreign Devils.

  3. Once Germany runs out of suckers on whom it can offload the costs of its dead-end economic policy, the German economy fails.

  4. The German nomenklatura is unable to reconcile the experience of the German economy with their model of reality, refuses to entertain the notion that the German economy is failing.

  5. [Optional, depending on how rapidly the political situation deteriorates in Germany] The German nomenklatura, having to face up to the reality that the German economy is failing, blames the failure on foreigners robbing Germany by defaulting on their unpayable debts.

  6. The Germany becomes a failed state. A 1930s-style Angry Party takes power, promising to take back what's German by right from the Foreign Devils.

  7. Germany freezes French assets.

  8. France sends an aircraft carrier to Bremerhaven, demand their money back.

  9. German surface-to-surface missiles sink the French aircraft carrier sent to blockade the Sound.

  10. France retaliates for the loss of their aircraft carrier with a nuclear first strike.

  11. The Russian deterrent panics, believes the first strike is aimed at Russia, counterstrikes France.

  12. NATO & Israeli deterrent counterstrikes Russia, Chinese deterrent counterstrikes NATO, Indian deterrent panics, launches at various Northern Hemisphere targets. Pakistani deterrent activates, counterstriking India. 20-30 % of all humans on the Northern hemisphere find themselves in the zone of total destruction of the opening strikes. Approximately half the survivors of the initial strike will die over the next month or two as industrial civilization ceases to exist north of the 20th northern parallel.

(8 and 9 are obviously exaggerations for effect. France isn't likely to care about frozen assets to the extent of sending a gunboat to get them back from Germany, and the WehrmachtBundeswehr isn't going to let the Angry Party shoot down a French aircraft carrier.)

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Wed Mar 20th, 2013 at 12:55:11 PM EST
[ Parent ]
So far, most EuroTrib preditions regarding the crisis have been optimistic.

Strike that, I'm moving to Tristan da Cunha.

guaranteed to evoke a violent reaction from police is to challenge their right to "define the situation." --- David Graeber citing Marc Cooper

by Migeru (migeru at eurotrib dot com) on Wed Mar 20th, 2013 at 01:03:24 PM EST
[ Parent ]
8 and 9 are obviously exaggerations for effect
You mean that the nuclear first strike is in response to the freezing of assets, then?

guaranteed to evoke a violent reaction from police is to challenge their right to "define the situation." --- David Graeber citing Marc Cooper
by Migeru (migeru at eurotrib dot com) on Wed Mar 20th, 2013 at 01:05:59 PM EST
[ Parent ]
What?

You should do something about your nightmares.

by IM on Wed Mar 20th, 2013 at 02:18:41 PM EST
[ Parent ]
Colman asked for the most pessimistic imaginable scenario, not the most pessimistic realistic scenario.

The most pessimistic plausible scenario is that Germany ends up as the last entry on the list of failed states that starts with Greece.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Wed Mar 20th, 2013 at 04:06:59 PM EST
[ Parent ]
I'm not sure I'd classify that as imaginable.  The US, Britain, Russia, and China would convince France to not launch nukes in that series of events.

Nuclear war is not unfathomable sadly, but we'd need a good few more steps there.

Be nice to America. Or we'll bring democracy to your country.

by Drew J Jones (pedobear@pennstatefootball.com) on Wed Mar 20th, 2013 at 06:50:15 PM EST
[ Parent ]
I don't think they would. In fact, I think the colonial powers would want to establish a quite firm precedent vis-a-vis the consequences of shooting surface to surface missiles at aircraft carriers.

Because there's bugger all else they can do to protect those floating coffins but establishing a firm precedent for bombing the offending country back to the stone age.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Sun Mar 24th, 2013 at 08:32:03 PM EST
[ Parent ]
No one really knows how sensitive a carrier is to antiship missiles, because no one has ever gotten hit by one. I'd worry just as much about torpedoes.

Peak oil is not an energy crisis. It is a liquid fuel crisis.
by Starvid on Tue Mar 26th, 2013 at 04:10:43 PM EST
[ Parent ]
Torpedoes are limited by the number of launch platforms you can get within striking distance. In littoral operations, ground-based anti-ship missiles have no such limitation.

Active anti-missile defenses are crap, and carriers have less passive defenses than the battleships of yore.

And I can throw thousands of anti-ship missiles at you for the cost in man-hours, raw materials, trained operators and factory and yard time it takes to build an aircraft carrier.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Tue Mar 26th, 2013 at 04:54:37 PM EST
[ Parent ]
There's the results of (the first round of) Millennium Challenge 2002.  

(Note: "Red" are the bad guys and "Blue" is the US Navy good guys:)

Red received an ultimatum from Blue, essentially a surrender document, demanding a response within 24 hours. Thus warned of Blue's approach, Red used a fleet of small boats to determine the position of Blue's fleet by the second day of the exercise. In a preemptive strike, Red launched a massive salvo of cruise missiles that overwhelmed the Blue forces' electronic sensors and destroyed sixteen warships. This included one aircraft carrier, ten cruisers and five of six amphibious ships. An equivalent success in a real conflict would have resulted in the deaths of over 20,000 service personnel. Soon after the cruise missile offensive, another significant portion of Blue's navy was "sunk" by an armada of small Red boats, which carried out both conventional and suicide attacks that capitalized on Blue's inability to detect them as well as expected.

And here is an interview with the guy who was the CIC of Red.

What I saw in this particular exercise and the results from it were very similar to what I saw as a young second lieutenant back in the 1960s, when we were taught the systems engineering techniques that Mr. [Robert] McNamara [Secretary of Defense under Presidents John F. Kennedy and Lyndon Johnson] had implemented in the American military. We took those systems, which had good if not great utility in the acquisition of weapon systems, to the battlefield, where they were totally inappropriate. The computers in Saigon said we were winning the war, while out there in the rice paddies we knew damn well we weren't winning the war.


She believed in nothing; only her skepticism kept her from being an atheist. -- Jean-Paul Sartre
by ATinNM on Tue Mar 26th, 2013 at 05:05:02 PM EST
[ Parent ]
God gracious. We are talking about the year 2013, right? So you devise a scenario where the fourth biggest economy of the world is a "failed state" but the rest of the world isn't touched at all? Nuts.
by IM on Wed Mar 20th, 2013 at 08:34:54 PM EST
[ Parent ]
No, not 2013. It will take at least until '14 for Spain to disintegrate, and until sometime '15 for France. And then probably another election cycle or two in Germany (depending on the speed which which Germany's built-to-fail policies fail) for the Angry Party to displace the current nomenklatura. So you're talking more like 2020.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Thu Mar 21st, 2013 at 03:22:15 PM EST
[ Parent ]
I stand by my prediction:

2009-2013 Second Merkel Chancellorship, Black-Yellow coalition, FDP destroyed
2013-2017 Third Merkel Chancellorship, second Merkel-Steinbrueck Grand Coalition, SDP destroyed
2017-2021 Fourth Merkel Chancellorship, Black-Green coalition, Greens destroyed
2021: coup to prevent a Linke government.

guaranteed to evoke a violent reaction from police is to challenge their right to "define the situation." --- David Graeber citing Marc Cooper

by Migeru (migeru at eurotrib dot com) on Thu Mar 21st, 2013 at 03:26:55 PM EST
[ Parent ]
Possibility of capital controls.
by gk (gk (gk quattro due due sette @gmail.com)) on Tue Mar 19th, 2013 at 05:31:18 PM EST
That must be Anastassides' "Plan B".

guaranteed to evoke a violent reaction from police is to challenge their right to "define the situation." --- David Graeber citing Marc Cooper
by Migeru (migeru at eurotrib dot com) on Tue Mar 19th, 2013 at 05:33:19 PM EST
[ Parent ]
Business Insider: REPORTS: Banks In Cyprus Could Be Closed For Another Week, ECB Working On 'Insane' Plan
Banks in Cyprus have been closed since the country put together a deal with the EU over the weekend to bail out its troubled banking system.

...

A new report from Dow Jones suggests that Cypriot banks now won't be re-opened until next Tuesday.

...

That was followed by reports that the ECB is working on capital control plans for when the banks re-open.



guaranteed to evoke a violent reaction from police is to challenge their right to "define the situation." --- David Graeber citing Marc Cooper
by Migeru (migeru at eurotrib dot com) on Tue Mar 19th, 2013 at 05:43:53 PM EST
[ Parent ]
... capital control plans for when the banks re-open.

Doesn't that sound ducky! More euphemisms!

They tried to assimilate me. They failed.

by THE Twank (yatta blah blah @ blah.com) on Tue Mar 19th, 2013 at 06:01:24 PM EST
[ Parent ]
They are going for full-on corralito.

guaranteed to evoke a violent reaction from police is to challenge their right to "define the situation." --- David Graeber citing Marc Cooper
by Migeru (migeru at eurotrib dot com) on Tue Mar 19th, 2013 at 06:02:15 PM EST
[ Parent ]
That has been unavoidable since sometime Friday.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Tue Mar 19th, 2013 at 07:15:20 PM EST
[ Parent ]
This is just so fucking stupid. Can't somebody just do something?

Peak oil is not an energy crisis. It is a liquid fuel crisis.
by Starvid on Tue Mar 19th, 2013 at 08:35:52 PM EST
[ Parent ]
The Troika is doing something.

If it were doing nothing at all, we would all be a lot better off.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Wed Mar 20th, 2013 at 12:56:03 PM EST
[ Parent ]
WSJ: Cyprus, EU Work on Contingency Plans (March 19, 2013)
The Cyprus government is working with European officials on contingency plans to keep the island's teetering financial system afloat in case of a crippling outflow of deposits when the island's banks reopen for business after an extended bank holiday.

Banks will remain closed through at least Wednesday, following the decision Saturday morning by euro-zone finance ministers that a tax should be imposed on all bank depositors in Cyprus as a condition for the island receiving a €10 billion ($13 billion) bailout. Imposing costs on bank depositors broke a taboo in the euro zone's handling of its three-year financial crisis.

The rest in subscription only, but apparently it includes plans for capital controls.

guaranteed to evoke a violent reaction from police is to challenge their right to "define the situation." --- David Graeber citing Marc Cooper
by Migeru (migeru at eurotrib dot com) on Tue Mar 19th, 2013 at 06:35:27 PM EST
[ Parent ]
Jeroen Dijsselbloem's statement: Statement by the Eurogroup President on Cyprus
I take note of the decision of the Cypriot parliament on the government's proposal for a one- off stability levy.

I confirm that the Eurogroup stands ready to assist Cyprus in its reform efforts and reiterate the position of the Eurogroup as I stated yesterday.

That's it. I kid you not.

guaranteed to evoke a violent reaction from police is to challenge their right to "define the situation." --- David Graeber citing Marc Cooper
by Migeru (migeru at eurotrib dot com) on Tue Mar 19th, 2013 at 05:53:13 PM EST
Plan A was the Eurogroup deal, plan B appears to be capital controls under ECB direction.

My plan C would be as follows:

  1. Uninsured depositors in the two banks the ECB claims are bankrupt receive equity in exchange for their deposits.
  2. Insured depositors in the two banks the ECB claims are bankrupt receive Cyprus government consols, redeemable as par in payment of Cypriot government taxes.
  3. Capital controls are instituted in the form of an exit tax equal to Cyprus' sovereign CDS spread on the day of the capital outflow.


guaranteed to evoke a violent reaction from police is to challenge their right to "define the situation." --- David Graeber citing Marc Cooper
by Migeru (migeru at eurotrib dot com) on Tue Mar 19th, 2013 at 05:59:37 PM EST
You should set up shop as an economic/monetary crisis consultant at €10,000/week. Italian threads and accessories, including stylish shades.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Wed Mar 20th, 2013 at 12:26:40 AM EST
[ Parent ]
Catching on faster than Gangnam style:
http://www.greens.org.nz/press-releases/national-planning-cyprus-style-solution-new-zealand

The National Government is pushing a Cyprus-style solution to bank failure in New Zealand which will see small depositors lose some of their savings to fund big bank bailouts, the Green Party said today.

Open Bank Resolution (OBR) is Finance Minister Bill English's favoured option dealing with a major bank failure. If a bank fails under OBR, all depositors will have their savings reduced overnight to fund the bank's bail out.

"Bill English is proposing a Cyprus-style solution for managing bank failure here in New Zealand - a solution that will see small depositors lose some of their savings to fund big bank bailouts," said Green Party Co-leader Dr Russel Norman.

(h/t Lunkhead @ Dailykos)

"The basis of optimism is sheer terror" - Oscar Wilde

by NordicStorm (m<-at->sturmbaum.net) on Tue Mar 19th, 2013 at 06:12:57 PM EST
How to create a bank run in one easy step...

Index of Frank's Diaries
by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Tue Mar 19th, 2013 at 06:17:22 PM EST
[ Parent ]
Serves New Zealand right for inventing inflation targeting.

guaranteed to evoke a violent reaction from police is to challenge their right to "define the situation." --- David Graeber citing Marc Cooper
by Migeru (migeru at eurotrib dot com) on Tue Mar 19th, 2013 at 06:24:46 PM EST
[ Parent ]
And killing off the Moa

Index of Frank's Diaries
by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Tue Mar 19th, 2013 at 07:10:43 PM EST
[ Parent ]
Its now becoming an issue of public debate in NZ, though we'll see if that changes anything.
by IdiotSavant on Tue Mar 19th, 2013 at 06:27:53 PM EST
[ Parent ]
eKathimerini: Deposit guarantees only protect against bankruptcy, not levies, says EU (March 19, 2013)
EU law guarantees deposits up to 100,000 euros per customer, per bank. But Commission spokesman Simon O'Connor said those guarantees only existed: «in the event of a bank failure."

"In this case, we are not talking about such a situation, we are talking about a one-off levy which will be applied as a fiscal measure, to all bank accounts in Cyprus,» he told a regular briefing in Brussels.

From the streets of Cyprus and on Twitter to radio shows in Belgium, millions of Europeans have protested at what they see as a blatant disregard for ordinary savers, which the Commission said was engendered by confusion over EU rules.

"That is the distinction that we need to make,» O'Connor said.



guaranteed to evoke a violent reaction from police is to challenge their right to "define the situation." --- David Graeber citing Marc Cooper
by Migeru (migeru at eurotrib dot com) on Tue Mar 19th, 2013 at 07:52:06 PM EST
Perhaps then the government of Cyprus can declare insolvent and resolve all of its (questionable) banks itself in the next few days and let the ECB make holders good up to €100K.  Only account holders with more that €100,000/per account will take losses, which could be compensated by shares in the banks. Of course large depositors with 'English Law' contracts will sue...

Then Simon O'Conner could explain what he really meant.
Likely that would be that the guarantee is only good in the event the ECB declares a failure.

"It is not necessary to have hope in order to persevere."

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Wed Mar 20th, 2013 at 12:39:44 AM EST
[ Parent ]
But the levy is triggered by insolvent banks, ie a bank failure. So the distinction is redefinition of words in order to cover of broken promises, which though often accepted by media is unlikely to install confidence in the population.

Sweden's finest (and perhaps only) collaborative, leftist e-newspaper Synapze.se
by A swedish kind of death on Wed Mar 20th, 2013 at 04:01:08 AM EST
[ Parent ]
Rumors are flying here, but here is the latest:

The Finance Minister of Cyprus went on an emergency trip to Moscow (accompanied by the country's energy minister). Apparently they're trying to land some sort of deal for the Cypriot banks that involves Russian investment:

There were also reports that the banking arm of the Russian energy company Gazprom might pump cash into Laiki, Cyprus's second largest bank, which is in urgent need of a capital injection. Gazprom officials insisted this was not being planned.

This would be a Gazprom bailout with a slice of Cyprus's hydrocarbon pie as collateral:

Russian energy giant Gazprom has offered the Republic of Cyprus a plan in which the company will undertake the restructuring of the country's banks in exchange for exploration rights for natural gas in Cyprus'’ exclusive economic zone, local media reported.

Representatives of the Russian company submitted the proposal to the office of Cypriot President Nicos Anastasiades on Sunday evening, Sigma TV reported.

The proposal states that Gazprom will fund the restructuring of the country's crippled financial institutions in exchange for substantial control over the country's gas resources while Cyprus won't need to take the harsh bailout package offered by the EU.

The Russians are said to offer also a significant extension on repayment of the 2.5 billion Euro loan to Cyprus

And there are also rumors of discussions about Russian naval bases, but Cyprus would be careful not to piss the US off too much, so it might be just rumors. The discussions I've listened to is that Cyprus will put two plans on the table, one with ECB and Russian participation and with only Russian participation, the first is a much easier program, but the feeling on the street is that there will be strong backing if the government is forced to the second option. (All this with a grain of salt: the rumor mill is working at full throttle)

Two points need to be emphasized though: This was seen as a resounding popular victory both in Cyprus and Greece, where the Samaras government is taking serious heat for backing the original ECB deal. Judging by reactions in the Greek-language social media there is an air of rejoicing, for this first and resounding "no" at the troika. In Greece SYRIZA is betting on some sort of a stable outcome, as proof positive that the powers that be in the EU are mostly bluffing and that Greece (with the rest of the EU South) can refuse the austerity madness. Interestingly SYRIZA has sent its head of economic affairs (the shadow finance minister) Yianis Dragasakis to consult with the Cypriot Communist Party (until a few weeks ago in government). (Greek posts included too, but here is the storified reaction of the day)

The other thing, which I feel the need to repeat, is that Cyprus is sitting on hydrocarbon reserves that are estimated to be at least worth 300-400 billion dollars (which is why Gazprom is very interested in Cyprus). Granted this wealth is not proven, and will be slow in coming, but that Cyprus is not deemed credit-worthy given this sounds incredible...

The road of excess leads to the palace of wisdom - William Blake

by talos (mihalis at gmail dot com) on Tue Mar 19th, 2013 at 08:17:27 PM EST


They tried to assimilate me. They failed.
by THE Twank (yatta blah blah @ blah.com) on Tue Mar 19th, 2013 at 10:19:01 PM EST
someone on twitter was looking tonight through a big manual of unusual sexual practices and came across this

 Symphorophilia; arousal from arranging a disaster, crash or similar

iit makes as much sense as an explanation as anything else ive heard

Any idiot can face a crisis - it's day to day living that wears you out.

by ceebs (ceebs (at) eurotrib (dot) com) on Wed Mar 20th, 2013 at 12:17:02 AM EST
But they are mad!? (Cyprus bail-in thread no. 3)

guaranteed to evoke a violent reaction from police is to challenge their right to "define the situation." --- David Graeber citing Marc Cooper
by Migeru (migeru at eurotrib dot com) on Wed Mar 20th, 2013 at 05:32:41 AM EST


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