Cypriot Austerity Measures

matdom said:
Bank runs in Europe i guess, those other countries that the banks are about to default. I suspect a massive European bank run over the next year.
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This tax is such a drastic intervention, it makes you wonder if a mass bank run is the intention. Bring down a few failing EU banks this way and people move their investments to consolidated central banks in France, Germany, UK etc or even a new single EU parliament controlled bank which guarantees safeguarding.
 
its down right nasty and god only knows how its legal, as the shares the people will get in exchange for there cash will be worthless by the end of the week when people withdraw all there money.

the worrying one is the imf backed it so a bank runs liable to happen and bugger up the economy's that had at least stabilized a little. spain, italy, greece and portugul will be my bet for runs to happen and any other country which starts to look like it will need a future bailout is open to runs as well.

as for a new cuntral eu backed banking system i wouldnt be surprised if the federalists try it as a measure to collect more tax cor the eu budget and control the flow of money.
 
WOW, just read this and i am lost for words, daylight robbery, unbelievable!

I just hope this is the beginning of the end of this joke called euro, jesus what a failure...cyprus had such a strong currency a few years ago, whos gonna deposit money in their banks anymore?
 
Iraklis F.C. said:
WOW, just read this and i am lost for words, daylight robbery, unbelievable!

I just hope this is the beginning of the end of this joke called euro, jesus what a failure...cyprus had such a strong currency a few years ago, whos gonna deposit money in their banks anymore?
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Not the Russian Mafia :D

http://blogs.ft.com/beyond-brics/2013/03/13/russias-cyprus-problem/#axzz2NmjfDFkt


FT on the 13th March said:
Over the past few months, a lot of questions have been raised about the share of Russian money flowing through Cyprus, not always legally, and what effect this would have on an EU bailout for the island.
Now as EU leaders prepare to meet and discuss the bailout this Friday, Moody’s raises two equally important questions: How at risk are Russian banks and companies to problems in the Cypriot banking sector? And how likely are Russian depositors and creditors to get their money back after an EU-managed bailout?
Much of the Russian money that travels to Cyprus ends up coming right back to Russia, with many Cyprus-based companies of Russian origin borrowing from Russian banks and using the funds to reinvest back into Russia.
The problem for these companies would arise if as part of an EU bailout Cyprus introduced restrictions on external payments, potentially causing those Cypriot-based holdings “to enter into technical defaults, increasing risks for lenders”, warns Moody’s in a new report.
“This is because cash flows used by these borrowers to repay their loans originate from Russia and often go through Cyprus, to be later repaid to Russian banks from Cyprus. In case of restrictions, Cyprus would simply block debt repayments to Russian banks.”
The Russian lenders that have exposure to Cypriot-based borrowers include Gazprombank, Nomos, Sberbank, Alfa and most notably state-owned VTB, whose Cypriot subsidiary had a total of $13.8bn in assets and $374m in equity of $374 million at the end of 2011, Moody’s notes.
It is hard to overstate just how much exposure both Russian lenders and Russian companies have to the Cypriot banking sector. Here are some mind-boggling statistics from Moody’s:
Russian banks’ cross-board loans to Cypriot-based Russian companies totaled $30-40bn at the end of 2012 – that is equal to 15-20 per cent of Russian banks’ capital base in Russia, and 5-6 per cent of their gross corporate loans.

Russian corporate deposits in Cyprus totaled an estimated $19bn at the end of August – an amount that is equal to 7 per cent of all the corporate deposits in Russia, excluding current accounts.
While Russian companies aren’t directly affected by the downturn in Cyprus since much of the money is simply flowing in from Russia and right back out, problems could arise if, as mentioned, Cyprus puts a moratorium on external payments which could “block loan repayments to Russia, leading to some asset quality pressure”, Moody’s says.
Furthermore there is the question of to what extent Russian groups will be regarded as priority creditors when it comes to Cyprus repaying its debts, and whether they will be forced to take losses, an outcome Moody’s believes is possible
This from the ratings agency:
…In our opinion there is an elevated probability that the sheer size of Cyprus’s anticipated debt load will eventually compel authorities to pursue every avenue for debt reduction, including private sector losses on Cypriot debt.
EU leaders may be meeting to discuss the bailout on Friday. But for Russian creditors and corporates the real excitement could come later down the road.
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http://www.reuters.com/article/2013/03/16/us-eurozone-cyprus-idUSBRE92E02220130316

Moscow, with close ties to Nicosia, will also likely extend a 2.5 billion euro loan by five years to 2021 at a lower cost.

"My understanding is that the Russian government is ready to make (such) a contribution," said the EU's top economic official, Olli Rehn.
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Looks like that may have their attention...
 
Jokester said:
There would be riots.
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Really? I just don't see it myself (not by us British)

And even if there were, would smashing up the place be justified....as it always seems to be condemned on here whenever anyone else goes round smashing up things when they aren't happy.

That's not really the way you are supposed to conduct oneself is it.
 
Freakbro said:
Really? I just don't see it myself (not by us British)

And even if there were, would smashing up the place be justified....as it always seems to be condemned on here whenever anyone else goes round smashing up things when they aren't happy.

That's not really the way you are supposed to conduct oneself is it.
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Well, we'll see what happens next week when the money stops coming out of the ATMs in Cyprus, because there's none left.
 
The big money will leave Europe even more quickly than before, the Germans are good at technical details but rubbish at people management.
 
UK government will be compensating any British military personal stationed out there with Cypriot bank accounts affected.
 
I'm not sure how this would work tbh, surely it'll just make people draw savings out and actually cause more of a problem than it'd solve..
 
Amazing really, but given the other result isn't this the best they can do?

Doesn't it set the president for other countries now ? Greece/Spain/Portugal/Italy? all of em?

its ww3 in Europe via a German dominated single currency.
 
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