ECON Cyprus enters "deal" with EU/IMF to confiscate a "tax" from depositers bank accounts!!!

mattbert said:

Wasn't this the approximate time period that some insiders were making big bets against the markets? It seems to me, from what I remember, it was basically right around this time.

I don't have the article links now.

Mattbert

Click to expand...

Yes

No riots yet? Hmmm........

stresilian: All feeling fairly underwhelming for moment.. Apparently tv channels are transmitting footage of empty roads to show 'no-one is out' #cyprus
Monday, March 18, 2013 8:44:42 AM

aliihsangelberi: RT @wisnefski: Your Cyprus Questions, Answered http://t.co/DnCEROXW76 via @wsj Useful guide here #cyprus #eurocrisis
Monday, March 18, 2013 8:32:52 AM

http://stream.wsj.com/story/europea...mod=wsj_streaming_european-elections-may-2012

rchrd_rlgn: RT @stefandevries: To avoid #euro bailout, Gazprom proposes to annex #Cyprus. More or less. http://t.co/3rQkbRFd1T
Monday, March 18, 2013 8:32:49 AM

http://greece.greekreporter.com/201...yprus-restructuring-deal-to-avoid-eu-bailout/

Guess that's true after all ^^^^^^^^

celtichare: The sharks are feeding around the edges first,before they go in for the kill! #Cyprus. @chunkymark
Monday, March 18, 2013 8:32:34 AM

theovisser_: RT @OpenEurope: The Great Cypriot game - geopolitics and gas in #Cyprus - read our take on what gas reserves mean for the CY bailout http://t.co/X6IqfDWQLa
Monday, March 18, 2013 8:32:33 AM

http://openeuropeblog.blogspot.co.uk/2013/03/the-great-cypriot-game-how-important-is.html

Beautyon_: ATTENTION Democracy Dimwits: re #Cyprus vote: Voting doesn't magically transform something that is WRONG into something that is RIGHT.
Monday, March 18, 2013 8:31:48 AM

PhilDeCarolis: RT @RT_com: Putin brands #Cyprus saving levy as ‘unfair’ http://t.co/5RkVJnUa04
Monday, March 18, 2013 8:31:21 AM

ConorMWalsh: RT @OndrejHouska: Those who disagree with the deposit levy in #Cyprus should not blame "Brussels". It´s been imposed by DE, FIN, #ECB and Cypriots themselves
Monday, March 18, 2013 8:31:13 AM

I was listening to the BBC on the radio this morning on the way in and someone they had on the line in Cyprus was reporting that many are now running up their CC's to get food/whatever so they don't have to spend the little cash they have on hand.

Also stated that some ATM boxes have been 'converted' to accept only deposits and to do other transactions but no withdrawals. I found that instantly interesting to think that on a weekend they started reconfiguring their ATM's. Me thinks this move was known well ahead of time.

ddombrowsky: RT @OccupyWallStNYC: #Cyprus banks to close until Friday to avert a bank run.
Monday, March 18, 2013 8:51:26 AM

RasmussenNews: RT @FoxBusiness: Stock futures hit as #Cyprus worries mount, but recover from session lows. Dow futures -70pts. http://t.co/sdrJ7PzJkC #FoxMkts
Monday, March 18, 2013 8:51:33 AM

*snip*

Today's Markets

As of 8:00 a.m. ET, Dow Jones Industrial Average futures fell 86 points to 14347, S&P 500 futures slid 13.8 points to 1540 and Nasdaq 100 futures slumped 26.3 points to 2764.

Wall Street's seemingly untouchable rally showed signs of cracking Monday, with sentiment taking a turn for the worse across many global trading desks.

Read more: http://www.foxbusiness.com/markets/...tocks-hit-as-cyprus-woes-mount/#ixzz2NtatNgWK

nkarampatakis: RT @J4ckGr: After #eurozone leaders blackmailed #cyprus to rob bank deposits, who will be next? #italy? #spain? The #contagion is matter of days.
Monday, March 18, 2013 8:51:21 AM

MigeruBlogger: RT @EconCharlemagne: #Cyprus banks said to remain shut to Friday. Does this count as capital controls in breach of EU norms? http://t.co/poaFuk6q6n
Monday, March 18, 2013 8:57:40 AM

Neantilisme: RT @vbenard: EU mandated a "screw every depositor" policy to protect the senior bondholders http://t.co/awzLTvdG1G #Cyprus
Monday, March 18, 2013 8:57:40 AM

angeladallman: Watch for Russian reaction to #Cyprus today. Lots of government money in those bans, as well as Russian mafia money. Putin is pissed.
Monday, March 18, 2013 8:57:38 AM

freakingcat: It's simply corporate theft #Cyprus
Monday, March 18, 2013 8:57:29 AM

ElianaVou: So Germany not happy with #Cyprus tax haven so found means to steal everyone's money on "moral" grounds...
Monday, March 18, 2013 8:57:28 AM

rubenva94065347: RT @AnonymouSkY: #Cyprus Americana: Humanity VS the #Banksters http://t.co/bOWpKZut7K
Monday, March 18, 2013 8:57:11 AM

http://sgtreport.com/

Matt_Loughran_: Putin calls #Cyprus deposit levy "dangerous." I also think its reckless & could destroy investor confidence #EU
Monday, March 18, 2013 8:57:10 AM

adam66Diablo: How dare any government take money from people's bank accounts, what people have saved?! I hope they meet a nasty end #Cyprus
Monday, March 18, 2013 9:10:17 AM

timespliters: #Cyprus bailout deposit tax rattles markets, will it happen in England, you know how they love a new #TAX #Banks
Monday, March 18, 2013 9:10:11 AM

ivalavanis: RT @MacroScope: "The Great EU Bank Robbery” http://t.co/ve1PiA0Cgl via @ReutersTV #Cyprus
Monday, March 18, 2013 9:10:11 AM

http://www.reuters.com/video/2013/0...bank-robbery?videoId=241675864&videoChannel=1

HouseofCommons: Financial Secretary Greg Clark is to make a statement at 3.30pm today on #Cyprus. Watch live online http://t.co/7yJMeYKTa4
Monday, March 18, 2013 9:10:00 AM

ninabellesmom: Does anybody think that leaders in #Cyprus could end up #dead? Just #thinking #frenchrevolution could happen anywhere govt oversteps. #tcot
Monday, March 18, 2013 9:09:51 AM

newyusuf: 60 billion Dollars: Russian exposure to #Cyprus, Russian markets on slide...
Monday, March 18, 2013 9:09:43 AM

JonT4: RT @GarryWhite: #Cyprus smash and grab is small beans compared with UK's slow motion bank robbery, says @iancowie - http://t.co/e7MNPhvIJ9
Monday, March 18, 2013 9:09:39 AM

mrmikeflynn: I'm curious as to how many #liberals just had the lightbulb go off in their head when they heard of what happened in #Cyprus. #theft
Monday, March 18, 2013 9:09:28 AM

andreakirwan: Dear god according to a reporter in Limassol the Cypriots are up in the mts flying kites #Cyprus. Just like Eire then. #rte
Monday, March 18, 2013 9:10:02 AM

Russia's finance minister says eurozone decision on Cyprus was taken without consulting Moscow - @Reuters

2 hours ago by editor

Cyprus official: Vote on deposit levy postponed until Tuesday 6 p.m. local time - @AP

1 hour ago by editor

Markets in Europe and Asia slump after news that Cyprus will tax all bank depositors to fund bailout - @WSJ

8 mins ago from online.wsj.com by editor

-----------

Financial rapists set to go on rampage http://t.co/CjTVWhsFFY #banksters #Cyprus #Italy

Monday, March 18, 2013 9:23:47 AM

Banking Chief Calls For 15% Looting of Italians’ Savings

Is the financial rape of Cyprus another IMF riot waiting to happen?

News that the International Monetary Fund initially demanded to loot a shocking 40% of savings from the private bank accounts of Cypriots underscores how residents of the Mediterranean country could be the latest victims of the infamous “IMF riot,” as the chief economist of the German Commerzbank calls for Italians to be similarly plundered for 15% of their savings.

The government of Cyprus is set to vote tomorrow on enforcing a “tax,” which in reality is nothing less than a confiscation of private wealth, that would hit savers with between 100,000 to 500,000 euros with a levy of 9.9%. Those with over half a million euros will face an even higher rate of 15%.

However, the scale of the robbery could have been far higher. As Zero Hedge reports, “It appears that the settled-upon 9.9% haircut is a ‘good deal’ compared to the stunning 40% of total deposits that Germany’s FinMin Schaeuble and the IMF demanded.”

Now that the dictatorial EU and IMF have simply set about stealing the privately accrued wealth of lifetime savers in Europe, everyone is asking one question – who’s next?

Joerg Kraemer, chief economist of the German Commerzbank, has called for private savings accounts in Italy to be similarly plundered. “A tax rate of 15 percent on financial assets would probably be enough to push the Italian government debt to below the critical level of 100 percent of gross domestic product,” he told Handelsblatt.

Although many Cypriots reacted with an anger over the theft of their savings, with one man threatening to drive a bulldozer into his local bank, the reaction has so far been noticeably calmer than one would expect in a country like Italy, which has already been hit with violent anti-austerity riots over the past year.

Are we now seeing yet another example of the “IMF riot” – where the banking elite deliberately fosters social dislocation as a ruse to seize control of a nation’s economy and begin the process of asset stripping, just as happened in Greece and Argentina? Are Cyprus and Italy now in the crosshairs?

As respected investigative reporter Greg Palast exposed in 2001, the global banking elite, namely the World Bank and the IMF, have honed a technique that has allowed them to asset-strip numerous other countries in the past – that technique has come to be known at the “IMF riot.”

In April 2001, Palast obtained leaked World Bank documents that outlined a four step process on how to loot nations of their wealth and infrastructure, placing control of resources into the hands of the banking elite.

One of the final steps of the process, the “IMF riot,” detailed how the elite would plan for mass civil unrest ahead of time that would have the effect of scaring off investors and causing government bankruptcies.

“This economic arson has its bright side – for foreigners, who can then pick off remaining assets at fire sale prices,” writes Palast, adding, “A pattern emerges. There are lots of losers but the clear winners seem to be the western banks and US Treasury.”

How long before the crisis engendered by the looting forces Cyprus to sell its precious assets in return for IMF debt, just as Greece has been doing over the last three years?

The looting of Cyprus, erroneously labeled a “tax,” has been spun by the Cypriot government, the IMF, the EU and the establishment financial media as a necessary evil to prevent the country’s banks going bust and the nation collapsing into bankruptcy.

Firstly, as Mark J. Grant explains, describing the maneuver as a “tax” is an insult to reality.

“Let’s be quite clear; the European Union has confiscated the private property of the citizens in Cyprus without debate, legislation or Parliamentary agreement,” he writes.

“A bank account is not a bond or a stock or any sort of investment. This seems to be lost on many people. A bank account is the private property of a citizen or a corporation and does not belong to the government or at least that was the supposition up until now in Europe.”

Secondly, the doomsday proclamation about Cyprus collapsing if the government is not allowed to loot private bank accounts is merely a cover story to justify what represents a brazen act of mass financial rape.

Instead of protecting the bankers responsible for the crisis while pillaging the people who bear no responsibility whatsoever for the debt, Cyprus should be following in the footsteps of Iceland.

Instead of bailing out bankers, Iceland arrested them. Instead of targeting its population with brutal austerity measures, Iceland paid off people’s underwater mortgages. Iceland also allowed people to pay off debts in foreign currency, which were declared illegal, with the devalued krona.

The result was that Icelanders had more money in their pocket, reinvested it into the economy and now the country has enjoyed a miracle financial turnaround.

The Cypriot government has seemingly chosen a different option – selling out its people to the gaping jaws of the European Union and the IMF and setting the stage for years of economic turmoil, civil unrest and dependency on a financial dictatorship which benefits not from stability but from sustained chaos.

*********************

http://www.infowars.com/banking-chief-calls-for-15-looting-of-italians-savings/

I'm starting to think the vote in Cyrus is 50/50 at best. That is why it is being delayed into Tuesday and who knows, maybe even delayed futher into the week.

If they had the votes, they would have rammed it through at the first opportunity.

Hopefully, the EU/ECB has badly miscalculated.

Good morning MzKitty.
The Russian "deal" will cause a rethinking of the EU "bailout".
The Cypriots want a hybrid state, having their cake and eating it too.
Loads of money and development help from Russia, and full EU membership as well.

Russia will get "even" with the EU, nobody knows exactly how yet...
(I imagine SpiritofTruth would like to be posting about this)
http://www.timebomb2000.com/vb/showthread.php?374347-Vladimir-Putin-quot-Long-live-the-King!-quot



The Great Cypriot Game -
How important is gas to Cyprus' economic and geopolitical future?
Update 12:00 18/03/13:
http://openeuropeblog.blogspot.co.uk/2013/03/the-great-cypriot-game-how-important-is.html

Russian Finance Minister Anton Siluanov has had some interesting things to say on
the deposit levy (via Reuters):

"We had an agreement with colleagues from the euro zone that we'll coordinate
our actions."

"It turns out that the euro zone actions on the introduction of the deposit levy took
place without discussions with Russia, so we will consider the issue of
restructurisation of the (Cyprus) loan taking into account our participation in the
joint actions with the European Union to help Cyprus."​

It seems Russia is none too happy with the eurozone approach, unsurprisingly. If it
does refuse to ease the terms of the €2.5bn bailout loan it previously gave Cyprus, it
could hit Cypriot funding requirements, although probably not by a substantial
amount. Still it could result in eurozone bailout funds being used to pay off a Russian
loan in the near future - something which may not sit well with German taxpayers.
Again, the interesting fall out will be to see how this impacts Russia's approach to
Cyprus and the EU more broadly.

***************** Original post ********************************

In the middle ages, Cyprus was a key battle ground between great powers seeking
dominance in the region. Well, the country - which, remember, only accounts for
0.2% of eurozone GDP - could become a hotspot once more (though we shouldn't be
over-excited about this).

According Greek Reporter, Gazprom made an offer over the weekend to the Cypriot
government to fund the bank restructuring planned under the Cypriot bailout (which
is set to cost up to €10bn) in exchange for exclusive exploration rights for Cypriot
territorial waters. How reliable this story is remains to be seen, but it does hint at
the geopolitical tension which we have been warning about.

Gazprom is known to be very close to the Russian government and despite Russian
President Vladimir Putin overtly slamming the deposit tax - calling it "unfair,
unprofessional and dangerous" - it is unlikely that they would let this opportunity
pass untouched. Fortunately, the Cypriot government is said to have rejected the
deal off the bat, but if displeasure towards the eurozone and the EU grows, the
Russian option may become increasingly appealing.

So how important is the gas element for Cyprus' economic and geopolitical future?
Well, there is no denying that Cyprus could potentially be sitting on top of gas
reserves worth many times its GDP. However, as a revenue stream it is far from a
sure thing. Here is how we put it in our flash analysis released on Friday:

Recent exploration has suggested Cyprus may have between €18.5bn and
€29.5bn (103% - 163% of GDP) in untapped gas reserves lying in its territorial
waters (according to Deutsche Bank). There have been rumours that this future
revenue stream could be incorporated or used to backstop the bailout somehow.
Although an appealing idea, there is still a huge amount of uncertainty around the
real value of these reserves and how soon they can begin producing revenue
​

So far, one field has been explored (known as Block 12) and estimates of its
potential value go as high as €100bn. See below for a useful diagram (via Baker
Tilley):

However, there are a few key points to remember when considering the impact of
this on the Cypriot bailout:




To us then, the offer by the Cypriot government to provide Cypriot depositors with
bonds linked to gas revenues sounds like a nice idea, but will not compensate these
depositors for some years, at best.

But, remember with a view to Moscow, this is definitely one to watch.

What...the people in Cyprus are rejecting getting raped by the bankers? How dare they!! Time for these banking institutions to go bankrupt and let the system shake itself out over time. A heck of a lot of pain all around and banksters swinging from the lamposts but if they keep screwing people the end result is going to be a lot worse in the long run.

Hfcomms said:

What...the people in Cyprus are rejecting getting raped by the bankers? How dare they!! Time for these banking institutions to go bankrupt and let the system shake itself out over time. A heck of a lot of pain all around and banksters swinging from the lamposts but if they keep screwing people the end result is going to be a lot worse in the long run.

Click to expand...

I keep wondering what happens to a persons brain when they get power....your statement is obvious to the rest of us, yet the power brokers keep thinking they can push this mess off on the next guy....

J

Morning, guys. I'm still just unable to get over being appalled by this move of confiscating private money. But then it's easy for them to do what with everything being hooked together via computer now. Just a click of a button. None of them can resist, they're criminals after all.

---------

Migs_Bru: #Cyprus shows that #eurozone cannot handle bank resolutions. If bank deposit warranty is not credible either, #bankingunion is dead. #EUCO
Monday, March 18, 2013 9:42:10 AM

santoshrestha: Cypriot bailout should make everyone of us uneasy. A reality check on how much govt. controls our lives. #cyprus http://t.co/sRcee7XAXp
Monday, March 18, 2013 9:42:10 AM

ParadiseFund: RT @FoxBusiness: Stocks slump in choppy action amid worries about #Cyprus and the #eurozone. Dow -74 pts. http://t.co/uDXMsvcBQg #FoxMkts
Monday, March 18, 2013 9:42:08 AM

I think, if they're even HALF smart over there, that in the coming days many, many bank accounts will be cleared out and only held open to CASH your payroll and then deposit in the bank of Sealy.

Lurker said:

I think, if they're even HALF smart over there, that in the coming days many, many bank accounts will be cleared out and only held open to CASH your payroll and then deposit in the bank of Sealy.

Click to expand...

Yeah. But then they'll probably send the Gestapo to your house to collect it. These people are insane.

-----------

Stocks open sharply lower on Cyprus bailout concerns; Dow tumbles 100 points - @CNBC

17 mins ago from www.cnbc.com by editor

Here's the Dow right now:

Dow Jones Industrial Average 2 Minute
Dow Jones Indices: .DJI - Mar 18 9:56am ET
14463.57-50.54 (-0.35%)

I'm still just unable to get over being appalled by this move of confiscating private money.

Putting the fox in charge of the henhouse is old hat to the banksters. But for the fox to start killing and eating chickens inside the roost is too likely to panic the flock.

They used to know that... and they were satisfied with quietly taking 2%, then 4%, now 8% or a bit more PER YEAR through the hidden hand of inflation. That's like grabbing an occasional solitary chicken outside the coop and away from all the other birds. With this move in Cyprus, the banksters have well and truly shown their hand as the rapacious weasels that they are.

If you are not now clear in your mind re. what this whole funny money fiat banking scheme is all about (separating you from everything you own), you are probably hopeless at this point and there is no help for you. If you DO have a clue now, you'd better be converting your savings account to something real ASAP and reducing your bank balance to the minimum level that serves your convenience in paying bills.

The Russian Navy is on the way! IMHO, NOT a coincidence! - BG

Russia’s Mediterranean Task Force to Comprise 5-6 Warships – Navy Chief
http://en.rian.ru/military_news/201...ask-Force-to-Comprise-5-6-Warships--Navy.html

MOSCOW, March 17 (RIA Novosti) – The Russian Navy will maintain 5-6 warships in the Mediterranean Sea as a task force to defend Russia’s interests in the area, Navy Commander Adm. Viktor Chirkov said on Sunday.

"Up to five-six warships must be present in the Mediterranean Sea on a permanent basis and control must be exercised through the command of the [Russian] Black Sea Fleet,” Chirkov said in an interview with the Zvezda TV network run by the Defense Ministry.

The Russian Navy’s Mediterranean task force will comprise frigates and cruisers, as well as support vessels, he said.

Russian Defense Minister Sergei Shoigu said on Monday a decision to deploy a permanent naval task force in the Mediterranean had been made.

“I believe that we have the capability to form and maintain such a task force,” Shoigu said, citing the success of recent large-scale naval drills carried out by the Russian navy in the Mediterranean and Black seas.

The exercises involved warships from the Northern, Baltic, Black Sea and Pacific fleets, strategic bombers and naval infantry.

Shoigu did not mention, however, a timeline for the deployment of the new task force, which would likely require significant effort to ensure efficient logistics and the proper maintenance of warships in the Mediterranean group.

The Soviet Union maintained its 5th Mediterranean Squadron in that sea from 1967 until 1992. It was formed to counter the US Navy 6th Fleet during the Cold War, and consisted of 30-50 warships and auxiliary vessels at different times.

Red Baron said:

I'm starting to think the vote in Cyrus is 50/50 at best. That is why it is being delayed into Tuesday and who knows, maybe even delayed futher into the week.

If they had the votes, they would have rammed it through at the first opportunity.

Hopefully, the EU/ECB has badly miscalculated.

Click to expand...

Lurker said:

I think, if they're even HALF smart over there, that in the coming days many, many bank accounts will be cleared out and only held open to CASH your payroll and then deposit in the bank of Sealy.

Click to expand...

That was my first thought, but then, probably charge a ridiculous fee to cash your check.

Thinking about calling my employer and choosing paycheck instead of direct deposit, but, they will find a way to steal a big chunk of that.

Good advice, DD. ^^^^^^^^

---------

NikNicholas: This #Cyprus thing is actually a joke. I've just lost about €700 out of my account. Thats genuine theft.
Monday, March 18, 2013 9:58:56 AM

BohlinJ: Banks have to be allowed to fail, it's part of the game in financial markets. Socio economic engineering never works #Cyprus #EU #Freemarket
Monday, March 18, 2013 9:58:54 AM

vokiabierto: #Cyprus and what did Ceaucescu in Romania after the fall of the Wall. And finally shot. I think it's a good precedent ...
Monday, March 18, 2013 9:58:52 AM

ACE52weekhigh: $GLD is reacting as a hedge against fiat currency cause ECB #CYPRUS thinks its ok to levy against Savers #deposits.
Monday, March 18, 2013 9:58:41 AM

TheKarmiDance: “@IrateGreek: Next in line for bailouts after #Cyprus in Schäuble's logic: the other offshores of the EU, Luxemburg & Mount Athos.”
Monday, March 18, 2013 9:58:39 AM

J4ckGr: RT @BBCWorld: Russian PM Dmitry Medvedev says #Cyprus bailout deal "looks simply like the confiscation of other people's money" http://t.co/tLPVzTOP3Y
Monday, March 18, 2013 10:04:53 AM

jroyo3: #Omerika won't do this 2 bank accounts - they'll nationalize the #401Ks 1st. #Cyprus #EU #Tyranny
Monday, March 18, 2013 10:03:58 AM

Jeff Allen said:

I keep wondering what happens to a persons brain when they get power....your statement is obvious to the rest of us, yet the power brokers keep thinking they can push this mess off on the next guy....

J

Click to expand...

Well, up until now, they have, time after time with not even a whimper. They get cheered and relected. People are too stupid to see what is going on outside of the "What's in it for me" mentality. As long as it doesn't effect them, great! Until the day it effects them, then they scream bloody murder. By then, the ones that were alerting people and ignored in the beginning have already been hauled off to the internment camps and dealt with, and no one is left to help them.

Lurker said:

I think, if they're even HALF smart over there, that in the coming days many, many bank accounts will be cleared out and only held open to CASH your payroll and then deposit in the bank of Sealy.

Click to expand...

If people didn't get their cash out by now, they won't be able to. They are going to freeze the banks, and not allow withdrawls through ATMs or bank tellers, or have a very small limit per day. If you didn't see it coming and prepare, it is too late. They will make sure. I'm sure logic has already told them that once they did this, people would flood to take their money out of the banks, crashing it all. So they made sure it was part of the plan.

Ms_Epicurean: RT @JasonReinhardt7: Gold Advances Above $1,600 for First Time This Month on #Cyprus #tcot #p2 #tgdn http://t.co/1ioOEFkfqP
Monday, March 18, 2013 10:26:50 AM

votermom: I'm not a Ron Paul fan, but his "return to the gold standard" doesn't sound so wacky anymore. #Cyprus
Monday, March 18, 2013 10:26:45 AM

Cade_Philly: Convinced disgusting raping of private wealth in #Cyprus tipping point of Euro demise. @DanHannanMEP's been warning world - DON'T EMULATE EU
Monday, March 18, 2013 10:26:46 AM

stefivos_uk: RT @MarianaFaithful: The Elected Reps of Greece, Portugal, Ireland and #Cyprus have the same motto! Protect the Wealthy & let the Poor fend for themselves!
Monday, March 18, 2013 10:26:21 AM

sassystamms: The EU and the IMF can take whatever and steal. We need people to wake up! Ovomit already wants access to our bank accounts. #Cyprus
Monday, March 18, 2013 10:26:12 AM

andrs_mr: RT @BBCBusiness: UK savings are safe, the head of the savings protection scheme tells BBC News after #cyprus depositors hit http://t.co/dfA3P2Fg0g
Monday, March 18, 2013 10:25:49 AM

LOL, oh sure trust us would we lie to you ^^^^^^^^^^^^^

stresilian: The placard reads: 'The one (president) before brought the Troika, the one now gave them everything" #cyprus http://t.co/oN1lvXEBlT
Monday, March 18, 2013 10:44:23 AM

The details say the picture was posted this morning, so I guess some of the people are out:

https://twitter.com/stresilian/status/313662168077848576

Russia, EU to discuss new agreement on cross-border projects this week

http://www.interfax.co.uk/russia-en...agreement-on-cross-border-projects-this-week/
(paywall limited to extract)

BULLETIN RELEASED: 18/03/13 9:51AM GMT :: 4 hours ago

RUSSIA-EU-GAS-PIPELINES MOSCOW. March 18 (Interfax) –
Russia and the European Union plan this week to discuss a new agreement
on cross-border projects, including gas pipelines, which were prepared …

Click to expand...

Inside Paradeplatz ‏@InsideParadeplz http://twitter.com/InsideParadeplz/status/313662294154416128

CYPRUS CENTRAL BANK SAYS BANKS TO BE CLOSED UNTIL THURSDAY: AP

Now I've heard Tues, Wed, Thur, and Friday. Who wants to go for Monday next?

walrus360: Doubt #Cyprus will affect trading much as the #Fed will on Wednesday. Watched morning sell-off and now volume is easing off like last wk.
Monday, March 18, 2013 10:49:14 AM

ParisRevolt1871: RT @CNBC: Would you agree to a 9.9% levy on your money for a state bailout? VOTE: http://t.co/ZQeCZztttS #Cyprus
Monday, March 18, 2013 10:49:12 AM

nealunger: So the common people of #Cyprus are being f**ked over to make up for mistakes of corrupt/inept technocrats? Check. http://t.co/cd5cwbpTmr
Monday, March 18, 2013 10:50:06 AM

rgncgnnurs9113: RT @liars_never_win: #Cyprus shows you why #2A rights still matter in the US. Disarmed people cannot chase down bankers and politicains to regain stolen assets.
Monday, March 18, 2013 10:49:48 AM

I highly doubt people would take to their guns here either. We don't know where the banksters/.gov bots actually live, do we? And it would be real hard to catch them at work, what with all their security.

They all just laugh and laugh...........

Lurker said:

I think, if they're even HALF smart over there, that in the coming days many, many bank accounts will be cleared out and only held open to CASH your payroll and then deposit in the bank of Sealy.

Click to expand...

Going to be a but difficult to do, according to Sky New the Cypriot Central Bank says banks will remain closed until Thursday or Friday, also as we know the ATMs have been cut off and the banks aren't allowing electronic transfers , basically if it was in the bank then your banjaxed

The issue of OUTRIGHT CONFISCATION OF PRIVATE PROPERTY will obviously not be addressed:

Accendo_Mike: RT @MatinaStevis: Breaking: #Cyprus likely to have new proposal to present at #Eurogroup call at 1830GMT #euro #wsjeuro
Monday, March 18, 2013 10:59:35 AM

KatyFinneran: The total #Cyprus bailout is €10 billion -- that's 60% of the beleaguered country's GDP http://t.co/koxHYfd03a, via @qz
Monday, March 18, 2013 10:59:32 AM

_Gustavo_Jose_: RT @GCGodfrey: Fed rejected #Cyprus style bailout in '41 on Violation of democracy. Thx @TheStalwart @EdConwaySky @rjwile http://t.co/UZvTjgExN3
Monday, March 18, 2013 10:59:22 AM

YiannisMouzakis: In 1941, the FED explains why #Cyprus bailout violates "one of the fundamental principles of taxation in a democracy" http://t.co/vuvjV0zrBu
Monday, March 18, 2013 10:59:21 AM

*snort* ^^^^^^^^^^^^^^

Darmell: @davidfrum EU should protect citizens from dirty business who ever is responsible. #Cyprus
Monday, March 18, 2013 11:03:00 AM

*snort* ^^^^^^^^^^^^^^

Barry_O44: Has DouchEU Draghi asked Bin Bernwankme to fly his helicopter over #Cyprus & drop some sugar? GP #QE4Life #BankstaGangsta #EUropocalypse
Monday, March 18, 2013 11:02:55 AM

poirazis: #europe, please .. i beg you, stop helping us! #cyprus
Monday, March 18, 2013 11:02:54 AM

mzkitty said:

rgncgnnurs9113: RT @liars_never_win: #Cyprus shows you why #2A rights still matter in the US. Disarmed people cannot chase down bankers and politicains to regain stolen assets.
Monday, March 18, 2013 10:49:48 AM

I highly doubt people would take to their guns here either. We don't know where the banksters/.gov bots actually live, do we? And it would be real hard to catch them at work, what with all their security.

They all just laugh and laugh...........

Click to expand...

Why do people in America believe that there are no guns in Europe, Cyprus has the highest level of legally owned firearms by private individuals in the EU

Swiss Banker ‏@russian_market http://twitter.com/russian_market/status/313664151480307713

MARKET CHATTER THAT CYPRUS HAS RECEIVED A NEW OFFER.

^^^From Whom???


Swiss Banker ‏@russian_market http://twitter.com/russian_market/status/313666310032723969

German FOCUS writes on Cyprus: "NOCH IST NICHTS FIX" (nothing is yet certain)

--------

Cyprus bailout terms should be debated by full Parliament on Wednesday

http://www.alde.eu/press/press-and-...eprenrss&utm_medium=aldeadle&utm_campaign=RSS
Guy Verhofstadt, President ALDE Group in the European Parliament, today reacted
strongly against the proposed terms for the Cypriot adjustment programme,
following the terms agreed early on Saturday morning between the Greek Cypriot
Government and the Eurogroup of finance ministers.

18/03/2013
Guy Verhofstadt, President ALDE Group in the European Parliament, today reacted
strongly against the proposed terms for the Cypriot adjustment programme,
following the terms agreed early on Saturday morning between the Greek Cypriot
Government and the Eurogroup of finance ministers.

"The Eurogroup must find a fairer solution with the Government of Cyprus than
placing an unfair burden of responsibility on ordinary Cypriot bank depositors for the
debts accrued by the reckless behaviour of the Cypriot banks. Last Friday's
Eurogroup proposal is neither fair nor effective. It contradicts EU law on deposit
guarantees and opens the doors to major uncertainty and instability amongst savers
across Europe whose banking sector is in difficulty, making bank runs more, not less,
likely in the future."

"This is little short of daylight robbery. EU leaders recalled in their summit
conclusions last week the need to break the link between banks and sovereigns. But
this cannot come at the expense of small depositors. I hope that the next 24 hours
sees a major change of heart before banks re-open again tomorrow."

"Whatever happened to the fine rhetoric and commitments to greater transparency
and accountability in financial structures ? Is the EU not losing enough support
already through measures which do not have the support of its citizens ?

The European Parliament is scheduled to debate the outcome of the summit last
week of EU leaders this Wednesday. Since it was largely a non-summit in that no
significant progress towards economic policy coordination was announced, I will be
requesting that we focus our attention on this issue and demand a rethink that
rebalances responsibility onto non-residents, bondholders and major depositors."

a retroactive tax is NOT a tax, it is a confiscation

muzicalredneck: @CNBC Of course #cyprus doesn't concern people, that is why the #ECB started this there. There is no turning back now... #austeritysucks
Monday, March 18, 2013 11:12:21 AM

georgepsal: RT @IrateGreek: MT @mkagkelidou More protesters outside #cyprus parliament. Demo split, other half marching to pres palace #rbnews http://t.co/QD9t6tLVGW
Monday, March 18, 2013 11:15:13 AM

Why Cyprus’s awful bank deposit tax will leave a lasting scar

http://www.edmundconway.com/2013/03/why-cypruss-awful-bank-deposit-tax-will-leave-a-lasting-scar/
Posted on Mar 18, 2013 in Blog
By Ed Conway, Economics Editor of Sky News

Banking is a confidence trick. The modern financial system
– fractional reserve banking as it’s technically called
– relies on the public putting faith in their banks.

After all, the nature of the system is that at any one time there’s never enough cash
in bank vaults to give everyone their deposits back – which is why bank runs are so
fatal.

That’s why in financial crises the cardinal rule is always to attempt to reassure
savers that their deposits will be safe. It’s why we have things like deposit
insurance; it’s why all Northern Rock, RBS etc savers were made good during the
crisis in the UK. Yes, everyone ended up having to pay the eventual price anyway
through austerity and higher taxes but people are accustomed to having money
confiscated through income and consumption taxes: their savings, on the other
hand, are considered inviolable.*

And that is, when push comes to shove, the problem with the way the Cyprus bailout
and bank deposit tax has been handled. If you have money in a bank account – any
bank account – in the country, you are being hit with an instant and unavoidable tax.
This instantly undermines public faith in banks – not just the rotten ones but every
single branch in the country, including branches of perfectly healthy foreign banks.

This is worth reiterating because there are some analysts who, in economic terms at
least, can’t see that much of a problem with the bank deposit tax. After all, the
country is in need of a bail-out; the money has to come from somewhere; the
banking system is full of dirty Russian money, so why not start there? And in
economic terms, this is quite right: plus you avoid all the messy legal complications
of defaulting on bondholders. Moreover, technically speaking depositors are just
another lender to banks, alongside creditors.

But looking at this through an economic prism misses the point, which comes back to
that fragile confidence trick. There are of course certain circumstances under which
a bank’s depositor should lose out: basically when that bank collapses. Indeed,
that’s precisely the kind of system we need in future to prevent bail-outs and too-big-
to-fail.

However, in those circumstances 1) other senior creditors should lose out, 2)
depositors whose savings are below the deposit insurance scheme limit should be
protected and 3) the deposits affected should, logically, be in the bank that’s going
under.

None of these three criteria were observed in the Cyprus case, where even deposits
in Barclays in Cyprus are subject to the tax, in the plan’s initial form. It doesn’t take
a genius to figure out that such a capricious attitude to principles savers might have
reasonably considered inviolable will catastrophically undermine Cypriots’ faith in
banks – not just Cypriot ones but any within their country.

There is a chance I’m wrong about this – after all, as I’ve said above, in blunt
economic terms it doesn’t really matter where Cyprus gets its bailout cash – whether
from taxpayers, depositors, fiscal cuts or the Germans – it still needs money to pay
the bills. But the experience of the 1930s showed that when a government
intervenes to confiscate deposits, it critically undermines that faith in the banking
system.

And, for better or worse, that faith is a key bedrock of the modern capitalist
economy. Would that it weren’t the case: but it is. And what’s happening in Cyprus
begs profound questions about whether there really is a safe place to put one’s cash,
questions which can now legitimately be asked about all banking systems, not just in
Spain, Italy and so on, but also in the UK and the US.

That is why the initial plan being passed around Brussels spared deposits below
€100,000. The eventual scheme, involving a tax on all savers, came as a complete
surprise to anyone who wasn’t in the room when it was being hammered out.

What, after all, is sacred? We used to assume insured deposits were. Now we can no
longer be sure.

* I’m talking, of course, about the savings themselves rather than the interest on the
savings – there’s less of a cultural resistance to taxing that.

zopalok: The German Spartans have fleeced their Cypriot Helots. The ultimate fate of all Eurozone serfs #cyprus
Monday, March 18, 2013 11:26:08 AM

LewisSJ: People in #Cyprus being denied access to their money from Saturday until Thursday - how are they supposed to buy food?
Monday, March 18, 2013 11:26:07 AM

SUNDARmyth: Capitalism - a bounced cheque ! RT @shuvankr Hey #Cyprus Central Bank, closed banks are as bad as failed banks
Monday, March 18, 2013 11:26:03 AM

JenaArtMuse: What else is happening in the world while all eyes are focused on #Cyprus?
Monday, March 18, 2013 11:26:02 AM

FoxBusiness: Euro bank leaders like $DB and $CS selling off on Monday in response to potential #Cyprus bailout: http://t.co/K7EkDHsu1d via @MattMEgan5
Monday, March 18, 2013 11:25:58 AM

donnchup: This German-inspired Taxing of Russian accounts in #Cyprus... I suppose calling it reparations for annexing East Prussia won't help matters.
Monday, March 18, 2013 11:30:02 AM

KaiHolloway: #Cyprus it's time to arrest the corrupt. Follow #iceland
Monday, March 18, 2013 11:31:56 AM

Yeah, good luck wif dat. ^^^^^^^^^^^^

I gotta go out for a while, back later.

Peter Spiegel ‏@SpiegelPeter http://twitter.com/SpiegelPeter/status/313664580117221376

#Eurogroup calls conference call on #Cyprus for 7:30pm


Peter Spiegel ‏@SpiegelPeter htt://twitter.com/SpiegelPeter/status/313671638166155264

Sr official says despite announcement of #Eurogroup call for 7:30pm,
corresponding euro working group call keeps getting postponed. #Cyprus


Matina Stevis ‏@MatinaStevis http://twitter.com/MatinaStevis/status/313665870536794113

Breaking: #Cyprus likely to have new proposal to present at #Eurogroup call at 1830GMT #euro #wsjeuro

I heard the Cyprus vote was to occur at 10AM EST - any word on that?

To answer my own question....

http://www.nytimes.com/2013/03/19/b...arkets-drop-on-latest-euro-concerns.html?_r=0

Delayed.



NICOSIA, Cyprus — Leaders in Cyprus and Brussels scrambled Monday to contain the fallout from an unprecedented effort to force ordinary bank depositors in this crisis-hit nation to pay for part of an international bailout, as stock markets faltered on concerns about the wider implications for Europe’s long-running debt crisis.
Multimedia
Interactive Feature
Tracking Europe's Debt Crisis
Multimedia Feature
Europe’s Debt Crisis: No Relief on the Horizon
Related

Turmoil in Cyprus Over a Bailout Rattles Europe (March 18, 2013)


President Nicos Anastasiades was trying to compel policy makers in Brussels to soften demands for a tax to be assessed on Cypriot bank deposits, saying European Union leaders used “blackmail” to get him to agree to those conditions early Saturday in order to receive a bailout package worth 10 billion euros, or $13 billion.

Cyprus, whose banking system is verging on collapse, is now the fifth nation in the 17-member euro union to seek financial assistance since the crisis broke out three years ago.

As anger in this country swelled against the measure, Mr. Anastasiades delayed an emergency vote parliamentary vote on the bailout plan until Tuesday, the second step in as many days. Faced with a lack of support from lawmakers, the vote could be delayed until as late as Friday.

Lurker said:

I heard the Cyprus vote was to occur at 10AM EST - any word on that?

Click to expand...

I think there is a -huge- amount of activity behind the scenes. Too early to say when a vote will take place IMO.

The End Of Systemic Trust: The Canary Just Died

Submitted by Lucas Jackson,

“When it becomes serious, you have to lie."
​

-Jean Claude Juncker, PM of Luxembourg,
and the head of the Eurogroup council of eurozone finance ministers

May, 2011

(^^^I posted this yesterday! PI)

http://www.zerohedge.com/news/2013-03-18/end-systemic-trust-canary-just-died

Prior to yesterday, if you were trying to handicap how the unelected leaders of the
Eurozone were going to react to a tough situation, you only had to refer to the quote
above from Mr. Junker to understand their mindset.

But so long as someone at the ECB was willing to flood the world with free EURs
(with significant backup provided the US Federal Reserve) the market closed its
eyes, held its breath and took the leap of faith that all was well.

However, post the Cyprus decision, the curtain has been pulled back and wizard
revealed with all his faults and warts. The age of innocence is dead and with it died
institutional and retail trust, confidence in the system writ large and the rule of law.

It would be hard to over-emphasize how significant the Cyprus situation is. The EU
demonstrated under no uncertain circumstances that they will destroy the rule of law
to maintain their own power. It was a recognition of tyranny that many of us have
always assumed was the case but yesterday became reality.

The damage done here is not related to the size of the haircut - currently discussed
between 3 and 13% - but rather that the legal language which each and every
investor on the planet must rely on in order to maintain confidence in the system has
been subordinated to the needs of the powerful elite. To the power elite making the
major decisions in DC, London, Berlin, France, Brussels, et. al., laws are like
ice cream, easily melted.


Which begs the question, who is next? Will it be Portugal? Greece? Spain? Italy?
France???

Will they impose a “one-time” tax on your bank account? Your house? Your stocks
and bonds? Retirement accounts?

The major banks of Europe are levered beyond anyone’s wild guess. They cannot
afford a hit to their capital base lest they be exposed for the over-levered giants
they are. This, of course, opens up the exposure all of these banks have to the
greater than $1tr derivatives market where the failure of any one of these derivative
banks could lead to the collapse of them all.

So, of course, the powers that be in Europe must do everything in their power to
prevent the world from noticing that their banks are broke. This means they will lie
and take anything they deem necessary. Including the forceful seizure of savings
accounts of innocent people.

The Government Is Your Friend?

Markets have been rallying for years on the back of the idea that government’s are
going “all-in” to save the current economic system. To many of the talking heads on
the business channels, we are supposed to view this as a good thing.

This has produced all kinds of non-market based solutions such as the bailout of the
major US banks and their subsequent TBTF moniker, the “bailout” (I use the term
loosely because this was really a political stunt) of GM and a never-ending stream of
free money being handed out by the major central banks.

The markets have seemed to like this ham-handed involvement and have rallied to
all-time highs.

But all along the way there have been those of us who have said that there will
eventually be a price pay. With the Cyprus decision, investors now know what the
price is: your money is not really your money. Your bank account is not really your
bank account. Your bonds, stocks, home and anything else you think you own isn’t
really yours. The governments of the world will take it from you whenever things get
bad enough.

Look at China. Do you think if the global economy ever shrinks far enough that the
Chinese will allow all those American companies to keep their assets on Chinese
soil? How likely is it that the Chinese will suffer through their own problems of
inflation and social instability and yet allow Apple, GE, GM and the rest to keep
benefiting?

Think about global mining and oil stocks? Most own assets in countries other than
the home domicile of the company. If the prices of precious metals and/or oil ever
meaningfully breaks out, do you think the poor governments that originally granted
the mining/drilling concessions will simply respect the rule of law and allow these
multi-national corporations to keep sending their country’s wealth abroad? Not
likely.

How about in the US? Could the US declare a bank holiday and unilaterally devalue
the currency in one swift move? I will get over 9,000 responses saying this could
never happen in the good ol’ US of A but of course it could. In fact it has already
been done before during FDR’s first 100 days in office. The template already exists.
Electronic banking only makes the process that much easier.

Technically, since the Fed has been running a policy of monetary inflation since
about 1920, the government here already has been quietly taxing the savings
accounts of its citizens without their permission for decades. The subtle difference
between what Europe is doing in Cyprus and what the Fed does every day to
American citizens is that the Cyprus theft is happening in one discrete event while
the Fed’s theft drips in slowly over years.

But no matter which way you look at the situation, expect things to deteriorate from
here.



Lehman Part Deux

What could be next?

Bank runs will continue apace where they are already going and will begin in
countries previously seen as impervious to such events such as France, Germany
and even Switzerland.

The difference in pricing between the paper and physical precious metals markets
will rise. Good luck to those of you owning paper gold and thinking this will help you
when things get bad. The legal language on your piece of paper is worthless. If
savings accounts aren’t sacrosanct, then neither is that ETF.

Did you or your firm stash a bunch of money off-shore in some tax-friendly haven
that probably has a favorable relationship to the British Crown? Best of luck with
that. Tax havens are nothing more than legal arbitrages. With the value of law
moving to zero, the value of your account approaches the same.

Trade wars will begin to rear their ugly heads as the losers in the currency wars
retreat to their last line of defense. Once you tear up the rule of law, trade
agreements quickly get thrown by the wayside once your domestic situation
deteriorates enough.

Moar and moar government micro-management of individual economies, markets,
sectors and companies. The Amateur Barack Obama and his minions will continue
the tradition started by George II of abandoning free market principals to ostensibly
save the free market. Once they are done there will be little left of the market and
none of us will be free.

CNN - Why Cyprus matters to U.S. investors

(I absolutely can't believe this is coming from CNN, watershed event!)
March 18, 2013: 11:07 AM ET
http://finance.fortune.cnn.com/2013/03/18/cyprus-bailout/

FORTUNE -- The terms of the Cypriot "bailout" announced late Friday are simply
atrocious and should be revised to protect small depositors to avoid potentially
crippling bank runs from popping up across Europe. Forcing bank losses on account
holders who believed their money was protected by government-backed deposit
insurance violates one of the most sacred of trusts between a bank and its
customers. As such, the agreement, if it stands, threatens to crash the entire Cypriot
banking system, which could have dangerous effects for banks across the European
Union, as well as for investors on Wall Street, who have bet billions of dollars
backing EU banks and sovereign notes.

Indeed it appears that Cyprus isn't going to roll over to the bailout demands of the
International Monetary Fund and the Eurogroup after all. Cypriot lawmakers
announced midday on Monday that they would postpone voting on the package. The
speaker of the Cypriot parliament said that the vote would be delayed until Tuesday
evening, but there is talk that the vote could be delayed until Friday. The sooner the
Cypriots come to an agreement with the Eurogroup, the better, as fear of a potential
system-wide EU bank run sent stocks falling across the globe on Monday. Japan's
stock market fell 2.7% overnight, while stock markets across Europe opened down
as much as 2%, with the markets in Italy and Spain hit the hardest. Investment
banks across Europe were also down, with shares in Deutsche Bank (DB) down 3.3%
and Barclays (BCS) falling almost 5%.

The bailout proposed Friday is actually more of a "bail-in," as it forces depositors to
contribute a large chunk of the funds needed to stabilize the nation's banking
system. There is to be a "stability levy" of 6.75% on all bank deposits less than
100,000 euros and 9.9% for those above 100,000 euros. That is in addition to a bevy
of growth killing austerity measures which will undoubtedly keep the Cypriot
economy in recession for quite a while.

As a refresher, Cyprus had been shut out of the international financial markets for
nearly two years thanks to a banking crisis that froze its economy. Cypriot banks
invested heavily in Greek sovereign debt, thinking that its sister-nation's bonds were
as good as gold. They weren't, and when the EU forced Greek debt holders to take a
massive haircut on their holdings, Cypriot banks locked up lending in the nation.

The falling bailout dominos created a 4.5 billion euro or $6 billion hole in the Cypriot
banking sector. The culmination of other bad bets forced the government of Cyprus
to go cap-in-hand to the EU seeking a $23 billion bailout of its troubled banking
sector. That may not seem like a lot of money, but it is roughly equivalent to
Cyprus's entire GDP, so it is quite a large number for them.

Now, the deposit grab will raise around 5.8 billion euros or $7.6 billion, which is just
a fraction of what is needed to fill the hole in the Cypriot banking system. Another 10
billion euros will come in the form of a bailout from the Eurogroup and the IMF. The
government will probably need to come up with the rest but it is unclear where it will
get the money at this point.

While it might seem logical to force all depositors to help finance the bailout, at least
in part, it really isn't. First, depositors were under the impression that the
government would protect their savings up to 100,000 euros per account. This is
what kept Cypriot banks from totally collapsing years ago as everyday Cypriots kept
their money in their checking accounts. By violating that agreement, the trust that
bank customers had in the financial system goes right out the window. That is why
you saw Cypriots trying to withdraw cash en masse from ATMs over the weekend. It
has now become safer to keep your money under your mattress than in a bank.

This lack of trust in the banking system could spill over to other eurozone countries
where a bailout seems imminent, most notably in Italy. The consequences of a bank
run in Italy would be disastrous to say the least and could set of a cascade of bank
runs across the eurozone. Wall Street is heavily invested in bank debt across the
continent. If banks begin falling, the loss will be felt here in the U.S. The economic
decline in Europe would undoubtedly cause U.S. investors to start pulling their
money out of the markets as was the case in Asia this morning when it was unclear
whether or not the bailout would go ahead in its current form.

There are many ways that this situation could have been handled, none of them
pretty. One would have been to force the government of Cyprus to swallow the bank
losses, as Ireland did in the early days of the banking crisis in 2008. That solution
wasn't applicable for Cyprus, though, as the losses were too great for the nation to
service. A second option would be to force the Eurozone to essentially gift the money
to the Cypriots. Northern European nations would ultimately bear the cost of much of
the bailout, which is arguably chicken feed compared to the cost of the bailouts of
Greece and Spain. But with elections looming in Germany this year such a move
proved politically impossible.

Cyprus needs a long-term solution to its banking mess or else it will never get out of
this economic funk it has found itself in. Forcing losses on all depositors only makes
the situation worse. Indeed, this bailout is unprecedented. Of the 47 banking crises
since 1970, only 17 required that depositors share in the losses, according to
Nomura. Of those 17 losses, though, none involved a blanket-wide levy on all
depositors for the simple reason that it could spark a run on the bank. Instead, bank
levies impacted just the largest depositors who wouldn't necessarily pull their money
out as would be the case with small time depositors who live paycheck-to-paycheck.
Large depositors and bank debt holders who would see vicious haircuts could be
enticed to keep their money and investment with the bank in exchange for variety of
carrots, ranging from bank equity to government IOUs.

Shifting more of the losses onto the larger bank depositors and to bank debt holders
seems to be the best way to solve, or to at least patch up, the damage done over
the weekend. There is talk of lowering the bank levy for depositors with less than
100,000 euros to between zero and 3%, with a subsequent increase in the levy for
those deposits over 100,000 euros to 13%. In the long term, though, the Eurogroup
should move quickly to pass rules creating a banking union with a unified European
deposit insurer, similar to the FDIC in the US, so as to erase depositor fears that
they may wake up one morning and see that the government just absconded with a
chunk of their savings.

VIDEO at link...

http://www.guardian.co.uk/business/2013/mar/18/eurozone-crisis-cyprus-bailout-savers-markets

Series: Eurozone crisis livePrevious | Index
Cyprus: banks shut till Thursday as government scrambles to amend savings levy - live
LIVE• Photos: protests in Nicosia
• Crucial parliamentary vote delayed until Tuesday
• Reports of a rethink on bank savings levy
• Vladimir Putin: savings levy is unfair and dangerous
• Midday: Markets claw back some losses

Cyprus bailout threatens to backfire

By Mark Thompson @CNNMoney March 18, 2013: 9:54 AM ET
http://money.cnn.com/2013/03/18/news/economy/europe-cyprus-bailout/index.html

LONDON (CNNMoney)
The latest European bailout is blowing up.

Cyprus delayed by 24 hours a vote in parliament on a controversial plan to rescue
the tiny island nation, and eurozone finance ministers were reported to be preparing
emergency talks Monday to prevent the plan from backfiring.

An unprecedented tax on bank deposits as part of the €10 billion rescue announced
Saturday led to a run on cash machines in Cyprus. It also spooked investors, who
feared that other weak eurozone states may be forced down the same path, despite
EU statements to the contrary.

Shares across the region fell in morning trading, and banks were hit particularly
hard. The prices of government bonds across southern Europe also fell, pushing up
yields. Early on Monday, however, there were no signs of bank runs in other
European countries, including Italy and Spain.

"The contagion from Cyprus is fairly limited but there is a tail risk that this measure
could backfire," wrote Berenberg Bank analysts in a note.

As part of the plan to rescue Cyprus' outsized banking sector and head off national
default, the EU said deposits of more than €100,000 would be subject to a one-off
levy of 9.9%, starting Tuesday. Smaller depositors would be subject to a levy of
6.75%.

It was the first time that the EU has insisted on such terms for bank depositors as
part of a bailout. The EU's bailouts of other nations, such as Greece, have been
accompanied by strict budget restrictions and led to losses for bond holders and
shareholders.

Cyprus state TV said eurozone finance ministers would hold an emergency
teleconference later Monday. A spokesman for the group was not immediately
available for comment.

Analysts said the levy set a dangerous precedent and could undermine depositors'
belief that their savings are safe.

"The Cyprus deal may prompt Europeans to question that," wrote financial markets
analyst and blogger Louise Cooper. "A fundamental safeguard to Europe's banking
industry has been compromised for a tiny country costing 10-20 billion euros to
bailout -- not a good trade."

The parliament in Cyprus was due to vote on the plan Monday. Cyprus was working
on last-minute changes to the proposals to force richer savers to bear a bigger share
of the cost, reducing the burden on those with less than €100,000 in deposits,
according to reports.

As Cypriots heard the news of the tax, they lined up outside to withdraw money
from ATMs. Banks placed withdrawal limits of €400 and many ATMs were running out
of cash over the weekend. A bank holiday Monday could be extended into Tuesday to
give officials more time to nail down the details, according to some reports.

Cyprus' President Nicos Anastasiades tried to calm his nation on Sunday, and
convince lawmakers to vote for the bailout plan.

"A disorderly bankruptcy would have forced us to leave the euro and forced a
devaluation," he said in a speech.

The bailout, while small compared to the emergency loans supporting other troubled
European nations like Greece, represents more than half the size of the €18 billion
Cyprus economy. Cyprus is the EU's smallest state, accounting for just 0.2% of
output.

The problem in Cyprus is the banking sector, which is several times the size of its
economy. The country made a formal request for help last June after its banks were
decimated by losses on Greek debt -- losses that caused lending to stall and sent the
economy into a deep recession.

Negotiations on a bailout stalled last year after a previous government objected to
the conditions that international lenders were looking to attach. They restarted
following the election of Anastasiades last month.

EU concerns about money laundering also hampered progress on a bailout. Cypriot
banks have large volumes of international deposits, with Russian businesses
believed to hold about $19 billion, according to ratings agency Moody's. As part of
the bailout deal, Cyprus has agreed to an international anti-money laundering audit.


Russia has come to Cyprus' aid in the past, providing a €2.5 billion loan in 2011 to
shore up government finances, but its participation in the new rescue was looking
uncertain Monday after President Vladimir Putin attacked the tax on bank deposits.

'If such a decision was made, it would be unfair, unprofessional and dangerous," his
spokesman Dmity Peskov was quoted as saying.

A finance ministry spokesman said Russia was reviewing its position after not being
consulted on the decision to impose the levy.

The International Monetary Fund was expected to contribute to the deal as it has in
others. Christine Lagarde, the fund's managing director, supports the terms and has
recommended that the IMF help provide financing for it.

In addition to the tax on bank deposits, other conditions for the bailout loans include
an overhaul of the financial sector and an increase in corporate taxes.

Cyprus is the fourth of 17 eurozone states to be granted a bailout by its EU partners
and the IMF, after Greece, Ireland and Portugal. Spain has been given EU assistance
to rescue its banks, but has so far avoided asking for a full sovereign bailout.

-- CNN's Elinda Labropoulou contributed to this article.


First Published: March 18, 2013: 7:20 AM ET