Cypriot bail out

we live on a planet of finite resources, and a diminishing individual share of those resources. There’s no such thing as sustainable growth, it’s impossible.

Lack of ambition!

Officials warning that second biggest banks will run out of liquidity imminently ie, in hours, so forget Monday?

Really, what is this fixation with binners and me? Please play the ball not the men

Its a chat forum you say some things i say some things. You cannot really think that that is having a go at you or playing the man 😯 Weak tbh its just a question.

This seemingly endless desperation to score points/nit-pick is merely illustrating the difficulty that you seem to be having understanding what is going on here

Ah so that is how you play the argument and not the man 🙄
Sorry I asked a question but from now on I will do some more of this type of thing to keep you happy 😕

this will now be stopped unless Cyprus agrees to the terms of the EU-IMF proposal. People can make their own minds up as to whether this is a “threat” or “advice”.

Well my understanding [it was on Radio 4 so I assume it is correct] is that this is just the rules and they cannot bank roll further without breaking rules. It is neither and just a statement of fact

And who let the country with 650% of its GDP in banking join its common fixed currency? Did anyone bother to ask them first? Did anyone look at the books? Oh… I forgot… this is the EU.

well they cooked the books and the EU believed them I suppose both are to blame rather. It is quite possible the EU knew and turned a blind eye though but I dount we will find a smoking gun to prove this

The organisation that has never ever had its accounts audited and signed off

Not this again http://fullfact.org/factchecks/has_eu_budget_rejected_auditors_18_years-28593

The Commission also point out that Member States control 80% of EU funds with the remainder managed directly by the Commission. This means that, by and large, member states themselves are responsible for detecting and correcting errors.
In other words, there is a certainly problem in how some EU funds are paid out wrongly and its not immediately clear how much of this is corrected by the Commission. But crucially this isn’t just a problem that originates from the EU’s central bureaucracy but spans much wider into member states themselves.
Moreover, the EU Budget has not been “rejected” or “refused” by the auditors – its payments have been consistently found subject to significant error for the past 18 years. This is hardly good news, but it isn’t as serious as some headlines imply.

Most of the errors are committed at a national level by member states administering it incorrectly so I am not sure why we would blame the EU. I dont think anyone would call it good tbh but nor is it as simple as you suggest.
Its worth noting the UK would also fail to audit at these standards see MOD spending for example
http://www.guardian.co.uk/uk/2013/mar/07/mod-city-experts-military-budget
this quote is not from that article for clarity

Defence officials spent nearly £600 million on technical advice which was intended for equipment, an internal report has revealed.

The audit of defence contracts since 2009 found control of budgets at the Ministry of Defence were “poorly developed or non-existent”, while civil servants made little attempt to ensure value for money

The Ministry of Defence has overspent its equipment budget by £6.5bn and some of its major orders are likely to be delivered 39 years late.

Its not just an EU issue but one affecting all govts and departments – lets blame humans rather than the EU?

It is a fair point that member states joined who appear to have not meet the criteria but they appeared to meet the criteria by cooking the books – who you blame for this is your choice and I think i can guess who will get it. Its not good though.

…back on topic ( 😯 ) looks like events have well and truly overtaken everyone now. Laiki didn’t even make it to the weekend, let alone until Tuesday.

Yes, the updates on Zero-Hedge make startling and sobering reading. Expect the BBC to downplay it, we musn’t frighten the horses…

I must admit i’m not quite up to speed on all of this, but to me it almost appears that Cypriot politicians are attempting to play the Russians against the EU for finance.

The politicians, Bankers, National and EU knew that that certain countries fiddled there figures to get into the Euro. There will be no smoking gun as it was a collective failure to really get the “European Project” going. I can understand this given the history of some of those involved but it is going to turn into a tragic mess for many.

We do not yet fully understand the ramifications yet but it will not look good.

My view is that Cyprus has now choice but to do what the EU/IMF have demanded. The alternatives our far worse for most of the ordinary people.

Since when did politicos care about the ordinary people?

Election time?

The Cypriot govt is a new one. If they apporove a 40% grab as has been suggested they are already dead men walking.

They haven’t even discussed the other solution – swapping €100k+ deposits into CDs with 5-10 yr maturities, so I guess they have no option but to impose haircut. Desperate times.

ohnohesback – Member

Since when did politicos care about the ordinary people?

Power and after that self preservation is what politicians want.Hence the stalemate in Italy at the moment.No workable coalition agreement and the only thing the three main parties can agree on is they don’t won’t to go back to the polls in case they lose out! So the country creaks along with no decisions being taken…..

The problem is that a centralised EU elite in Brussels now view national governments as completely expendable, and are happy to sacrifice them for their grand European political ‘project’.

They’ll cajole, strong arm and blackmail them to do things that they know the electorate will immediately reject. Thus voting them out. But no-one in Brussels, (the people who’s mess it actually is) will be voted out. They stay deliriously unaffected by the chaos they’ve created, Sat in their ivory towers, as they sweep to their next pointless summit meeting in their chauffeur driven limo’s

The detachment of those at the top from the people so effected by their disastrous policies is now complete

The politicians, Bankers, National and EU knew that that certain countries fiddled there figures to get into the Euro

May well be true.
According to a documentary on RT the other day the Greek’s were advised by a leading American financial powerhouse on how to make their books look good enough to gain entry into the Euro for a hefty fee.This same American company is the one who made a run on the Greeks banks and made a fortune because they knew the real figures.They are apparently waiting in the wings to make yet another fortune if any countries do drop out of the Euro too.

But no-one in Brussels, (the people who’s mess it actually is)

I think it really is Cyprus mess rather than theirs – you seem to forget how much national autonomy a soverign country has re its economy and laws. You cannot really think that the EU made them loan all this money etc any more than they make the UK [ overly??] reliant on banking – these are national decisions about the economy.

blackmail them

well they can refuse the offer of the money and the conditions if they so choose for it is a democracy. it is hardly madness to set conditions for a loan toa bankrupt country and again you would not be praising the EU of they just gave it them and send yes do a syou please it is all fine.

The detachment of those at the top from the people so effected by their disastrous policies is now complete

I know why can they not get leaders and men of the people like we have? I mean Dave and Gideon – could you meet two more well rounded or grounded individuals with a real insight into the lives of the common folk – son of tax avoider and the son of landed gentry – that is the way fwd for being in touch and not being ruled by an elite.

Will be an interesting couple of days to see what the solution is tbh.
Cypriots are in trouble now Russia pulls out and really have no choices tbh. It will be interesting to see whether the electorate are savvy enough to realise they have no choice but to take a deal[ however bad] or whether they chooose the bankruptcy option [ who would want to lead that govt?

The EU deal is a good one imho.If Cyprus raises the taxes requested the EU write down the loan,ie reduce it permanently.Anything from elsewhere would be an additional loan or extension which would only make things worse.The EU wanted this bank tax to leave the small savers alone and penalise the big savers more,i.e. be progressive,the Cyprus govt.disagreed probably not wanting to upset the Russians.

I think we can now take it as read that Cyprus is now well and truly ****ed!!! And will now enter the same economic death spiral as Greece (economy contracting at 5% a year? Yip – Thats sustainable long-term without dissolving into anarchy)

The question now is ‘who next?’ Italy? Spain? Portugal? Greece (again)? And how long? Because that’s exactly what the vultures speculators are thinking. As they know there will be no change of direction in Brussels as that would be an admission that their ‘Project’ is the disaster we all know it is. Well… with one notable exception 😉

My money is on Italy? I’ll give them 6 months, tops! I wonder how much they’ll need?

A lot of talk about Brussels when in reality it’s Germany holding the purse strings, but who can blame them for wanting something in return for bailing out another failed economy, especially one built on money from out side the region.

Merkel is up for election in September she needs to take that in to account or Germany could end up with a bellend government like Italy. Anyway, why should they bail out Russian money held in an EU country, unfortunately the Cypriot public are caught in the middle. It’s the failed economy of Cyprus and their reliance on a GDP from a banking system built around providing a tax haven bubble that has now burst.

Not read much of the previous 7 pages so may have been said and no doubt argued about already.

Dobbo….agreed that Germany is acting in its own interests and Merkel has one eye on re-election….so does this not give a massive clue that ever closer EU integration cannot work if individual nations are still doing whats best for them?

How is the EU ever supposed to function as a whole (fiscally) when economies as diverse as Cyprus and Germany are thrown together and Germany being the major contributor acts out of self interest?

The whole thing is a farce….it is built on political idealism without the necessary economic underpinnings.
There was a program on why our european neighbours push ‘the project’ at all costs and why we are lukewarm in the UK….it basically said that memories of a continent ravaged by 2 world wars are the driving force behind ever closer integration.
In the UK we experienced the wars on our doorstep but in France, Italy, Greece, Holland, Germany etc it took place right in their homes….the program stated that EU politicians are basically motivated by the fear of this happening again….our mindset is different in the UK which is why we dont ‘get it’ and for the most part are confident in our ability to go it alone….we see the wars as glorious victorious episodes in our history, the same is not true on the continent.

Anyway, the whole thing is broken….its just a matter of time, civil unrest will follow and then bizarrely the peace the EU set out to create may be disrupted by their own idealogical efforts to avoid war at any cost.

There is a certain irony that an until-now benign Germany, which has clearly started the project with the best of intentions is now forcing austerity on countries like Greece, which as a reaction have seen an explosion in support for extreme far right/fascist parties

But i suppose that’s the laws of unintended consequences for you. Depressing nonetheless

Its a mixture tbh they work more in the common good – would they even give a hoot about Cyprus but for the EU/Euro or do anything at all but still with national interest at heart/prime directive. Change is slow and it will take generations till we all see ourselves as Europeans – if ever and yes binners that is a massive HIUGE if the size of a bailout.

Greeece would be being austere right now irrespective of the Euro project as basically it has no money. Situations like this always lead to a rise in extremism – have you seen the UKIP vote over here etc 😉 JOKE PLEASE GOD NOOOOOOOOOO

It looks like they have done a deal with Greece of all places.

What could possibly go wrong?

Its official. The Eurozone has now made satire redundant 😯

They go on the lash to celebrate, get hammered on Ouzo and loose the wallet with all the bailout money in it, then get in a fight with a Russian while a group of Germans are looking on in bemusement?

From the telegraph

14.55 And here’s what we think that proposal might look like, based on reports and rumours from journalists on the ground.
Laiki Bank – the island’s second largest lender – is wound down. Depositors’ first €100,000 are hived into the Bank of Cyprus. Everything else is put into a bad bank, and sold off, likely at a 20pc to 40pc discount. Since a wind-down of Laiki means it will not need recapitalised, this part of the plan takes care of the first €2.3bn of the €5.8bn that Cyprus must raise to qualify for its €10bn troika bailout.
So where to get the remaining €3.5bn? Since the troika royally rejected the idea of a ‘solidarity fund’, largely over objections to nationalising some pension funds, the bank levy is thought to be back on the table. According to information on the spread of deposits (see table in 12.47), a 9.46pc levy – lower than the 9.9pc proposed in the Eurogroup’s original plan – on deposits over €100,000 would do the trick.
Under such an arrangement, the biggest losers would be those with deposits over €100,000 in Laiki Bank, who could be charged a 9.46pc levy and have any deposit over €€100,000 swallowed into the ‘bad bank’ and sold off at a discount, losing as much as 40pc of its value. As Open Europe argued earlier (13.27), they could, in effect, be hit twice.

By the sounds of that, there are going to be some pretty seriously ****ed off Russians. Given the nature of said Russians, if I was responsible for that decision I may be going to live in a cave somewhere far far away

“The question now is ‘who next?’ Italy? Spain? Portugal? Greece (again)? And how long? Because that’s exactly what the vultures speculators are thinking”

Sorry they aren’t… the spainish and italian bonds are holding up well… % rate on the 10 year bonds are down small today.

And that’s the point … the markets see Cyprus for what it is… 0.2% the the wider EU.

Thats how Brussels is getting away with playing hardball

Wow just understood that the company that Im working at which has a normal business current account at the bank of Cyprus has just been notified that its current account will be raided to the tune of 40%.

**** unbelievable.

I’m sorry, but that can’t be the case. If you read the prvious posts, Junkyard has categorically assured us that the only people who’ll lose money are Russian gangsters. Anyone losing any cash will be doing so because they deserve it!

Its all part of the EU’s refreshing attitude to representative democracy, fairness, equality and openess 😆

God help the Cypriots after this fiasco as it will destroy their country

This article by Seumas Milne in today’s Guardian pretty much sums up who’s going to suffer as a result of this, and who’s (same old) interests are being served…

Europe’s flesheaters now threaten to devour us all

Wow just understood that the company that Im working at which has a normal business current account at the bank of Cyprus has just been notified that its current account will be raided to the tune of 40%.

**** unbelievable.

Are they a Cyprus based company? Or do they just keep a Cyprus account to cover the local costs, in which case it won’t be that much, unless of course they were hoarding money in that account to avoid paying tax where it was due in which case karma is served.

Sancho – Member

God help the Cypriots after this fiasco as it will destroy their country

Well, that’s for trying to free ride the EURO.

Exactly what do they have as main income? Russian depositors?

Now they will need to slave themselves to the Turks … and the Russians.

You know when, about two years ago, Germany opened up a big gas piepline from Russia which they are pretty much reliant on to run their domestic and industrial energy needs since they’ve now closed down their nuclear power stations…

Well, do you think they fully thought through the chances of Russia becoming slightly pissed off with them for being seen as responsible for the theft of russian money from the Cypriot banks?

Some of you still don’t understand, do you?

And some of you won’t understand when the euro crisis continues to spread, and more people find their accounts subject to capital controls and being raided, without even the fig-leaf of a parlimentry approval. Remember that the Dutch finance minister said, and quickly retracted once he realised he’d let the cat out of the bag, that this is the template for future bailouts.

Welcome to raid my savings 😆

So Left wing Binners is here to explain why the EU should bale out all banks at great expense and if they dont they are evil personified…he formed this view by long hours of praising GO and others for helping out our banking system [ Gawd bless em] that he holds in such high esteem – Binners you hate the EU so much you are actually defending bankers to have a go at the Euro elite 😯

Re your link I stopped reading at th esecond sentence

The deal forced on Cyprus by the German-led Troika at the weekend isn’t a bailout: it will effectively destroy the island’s economy.

they were not forced they could decline and they did via a vote, they could seek loans elswhere and they tired but they were so risky that russia did nto want to etc
German led troika is bordeline racist tbh and i am not even sure what they are referring to tbh – The tripartite committee led by the European Commission with the European Central Bank and the International Monetary Fund, is generally called a troika does he mean this as German led?
Destroy the economy – its **** anyway and that is not germanies or the Euros fault now. Vyprus structured their economy to be this relaint on banking and can no longer fund it

I gues it is just more of a similar polemic of hatred – cannnot think why you liked it 😉

German led troika is bordeline racist tbh

No its not, although it may be factually incorrect.

JY – I have to say you seem to be morphing into TJ. This is not a good thing, these constant unfounded accusations of racism are silly and lazy – and dare I say it detrimental to the cause as people will ignore it if it is overused.

Likewise the constant accusations of “ad homs” is boring as well.

I used to enjoy your posts – but sadly rarely do now.

You really just don’t get it at all, do you JY? The EU bail-outs are a back door way of bailing out European banks. Cypriot savers and businesses are presently paying a 40% tax on their savings and earnings, so that European Bankers don’t have to lose any money on their bad investments. When George Osbourne does nothing like as extreme as this, then you damn him. Perhaps if he nicked 40% of all our money to hand too RBS, Lloyds and Barclays then you’d applaud him?

Because, be under no illusions, that’s exactly whats taking place here! And as they’ve let slip already, this will now be the model for future bailouts. And as we all know, there WILL be more bailouts. This shambles guarantees it!

I find your failure to comprehend this, and your constant defense of the Euro frankly incomprehensible.