Cypriot Austerity Measures

If this measure is designed specifically to hit Russian mafia money laundering operations, I was wondering what Putin would think about it. Now he's come out and described it as "dangerous". Time for the Cypriot president to watch his back I think.
 
The Russian authorities hate the money launderers too. The problem is there's so many of these gangsters - and they used to take enormous deposits to Cyprus. The Germans have played a nice move with their insistence on the Deposit account levy, that way dirty Russian money actually pays in part for the bailout
 
The trouble with Cyprus is that it has had heavy Russian investment, and has been ruined on a cultural level by joining the EU. I used to live in Cyprus for 3 years as a kid, and it was a fabulous place (Totally different now though).

Very disheartening to see them going through this.
 
Scougar said:
The trouble with Cyprus is that it has had heavy Russian investment, and has been ruined on a cultural level by joining the EU. I used to live in Cyprus for 3 years as a kid, and it was a fabulous place (Totally different now though).

Very disheartening to see them going through this.
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Agreed 100%. I would still live back there though (well still have some family roots there and makes it an easy holiday) - but you're right it has been ruined somewhat. It's great if you can keep away from the tourist areas though.
 
Well, it could be worse folks. Seems that ze Germans wanted 40% originally...

http://www.zerohedge.com/news/2013-03-16/germany-and-imfs-initial-deposit-haircut-demand-40-total


But what is the real reason behind the bank levy?

...

Now remember, that’s €9 billion of Cyprus loans to the banks, mainly Laiki, which is junior to deposits, versus the €5.8 billion to be seized from depositors. So why aren’t the loans from the Cyprus central bank being written down and the Cyprus sovereign debt investors taking losses? Well, it turns out it is easier to screw retail customers than it is professional investors:

As it is, there were lots of good reasons why a sovereign debt restructuring did not happen. I don’t want to downplay them. Notably, the fact that the bonds that were best to restructure were governed under English law, and were likely held by the kind of investor who’s willing to litigate. I listed the problems here. Around it all was the inability to get write-downs out of Cypriot domestic-law sovereign debt, because that was held by the banks which already bore big black holes in their balance sheets. Again we come up to something that could be raised in the defence of the deposit levy — local exposure was so great everywhere, that any distribution of losses would have been painful. For the widow depositor, substitute the pension fund holding local-law bonds….

Of course, theoretically, Cyprus could have been given a nod and a wink to carry on all the way into June and then suddenly announce a ‘hard’ payments default. You then really get into trade-offs there — would Cyprus want to be regarded as that kind of sovereign? Would it be good for it as a banking centre? You also have to think how deposits would have reacted in that kind of hard sovereign default.

...
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http://www.nakedcapitalism.com/2013/03/will-cyprus-become-creditanstalt-2-0.html


Well there you have it, they could have imposed the loss on bond holders, but under British Law they could have (and would have) sued the living daylights out of them.


Edit: Could someone please capitalise the 'C' in Cypriot in the title please....
 
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I see they have decided to keep the banks closed in Cyprus until thursday. Yeah, that'll help put everyone at ease. :rolleyes:

I'm still surprised this was even considered. Euro confidence will be hit hard. Potential mass withdrawal of savings in Italy, Spain?
 
I dont see how they can go back on what they've said now. They cant announce it then not do it, because everyone is just going to remove all the money anyway.
 
Calabi said:
I dont see how they can go back on what they've said now. They cant announce it then not do it, because everyone is just going to remove all the money anyway.
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Yep, its too late once you have said something like that and leave it for a day, the damage they have caused has probably cost more than the bailout 20 fold.

/claps.

In honesty, doesnt matter what they do now, they dont go ahead, people leave/people withdraw their accounts, they do go ahead, people leave/people withdraw their accounts.

Sometimes i wonder how these apparently educated to the highest degree politicians can make such a mistake.

Sigh.
 
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jas72 said:
hmm why the outcry?

Civil servants in Ireland/Spain/Greece/Latvia have had 30% of the earnings cut PERMANENTLY!

This is a one time hit at people who can afford it most ie those with 100K of savings in their account!!!!!
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You must be joking right?
Pensions for civil servants were reduced by 50%. There will be no inflation rise for the next 5 year, no promotions, and cuts of around 20%.

Also a lot of benefits were reduced to zero.
A lot of markets offering free food opened to feed the 20% of the population who have no money whatsoever.

One time hit?
You must be having a laugh.

Also I saw a mention on casinos. Casinos are illegal in Cyprus.
 
M1k3H said:
You must be joking right?
Pensions for civil servants were reduced by 50%. There will be no inflation rise for the next 5 year, no promotions, and cuts of around 20%.

Also a lot of benefits were reduced to zero.
A lot of markets offering free food opened to feed the 20% of the population who have no money whatsoever.

One time hit?
You must be having a laugh.

Also I saw a mention on casinos. Casinos are illegal in Cyprus.
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400.000 families in Greece have none working members, 60% of them unemployed for over a year. Under 24 unemployment is 65%, minimum wage is 420 euro/month. Businesses have seen their profits down by up to 62% since the start of this phenomenon.

All these introduced by the same people who today sink Cyprus and destroy the fabric of society across Southern Europe, soon Northern to follow is my guess because the influx of immigrants will be massive meaning a huge drop in wages in your country.
 
Iraklis F.C. said:
400.000 families in Greece have none working members, 60% of them unemployed for over a year. Under 24 unemployment is 65%, minimum wage is 420 euro/month. Businesses have seen their profits down by up to 62% since the start of this phenomenon.

All these introduced by the same people who today sink Cyprus and destroyed the fabric of society across Southern Europe, soon Northern to follow is my guess because the influx of immigrants will be massive meaning a huge drop in wages in your country.
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I know how the situation is. The wages already dropped from all the Greeks coming over and taking the jobs for peanuts. Eurogroup, when they did the haircut to Greece, knew about Cypriot investments in Greece, but did it anyway.
Our only other option was to veto that, and let Greece go bankrupt, which I think would be foolish, cause we would lose all our investments anyway.
I am just bitter by the fact that we are being named as money-launderers, when the reports from the IMF and ECB point out that Cyprus is 7th and Germany 15th in the anti-money laundering measures and effectiveness.
Everything is political because they have elections.

I wish and hope, that we come out of the Eurozone and back to the pound.
Then, the Germans, would have wished they gave us the money for free.
 
It's almost as if Germany wants to cave the roof in. The EU in it's current incarnation is done for, if we're going to start to get demands and stipulations like this we're only going to cause further uncertainty and strain on the banking and monetary system. The Euro needs to go if the EU is to survive.
 
Biohazard said:
It's almost as if Germany wants to cave the roof in. The EU in it's current incarnation is done for, if we're going to start to get demands and stipulations like this we're only going to cause further uncertainty and strain on the banking and monetary system. The Euro needs to go if the EU is to survive.
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Germans are arrogant. Their economy is dependant on Russians and Americans and still it is like they are trying to find their limit.
Because they have elections, arrogance is pushed forwards to gain votes.
 
Iraklis F.C. said:
All these introduced by the same people who today sink Cyprus and destroy the fabric of society across Southern Europe, soon Northern to follow is my guess because the influx of immigrants will be massive meaning a huge drop in wages in your country.
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Our government already has their "work for your benefits" scheme in place ready for when unemployment is much higher.
 
M1k3H said:
I am Cypriot, but no, I am staying and working in the UK.

I have nothing to lose from the measures they are trying to impose, neither has my family, it is the lack of respect towards us that angers me the most.
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ok i got confused because you used "us" in your posts and thought you're a Cypriot.
 
mmj_uk said:
Our government already has their "work for your benefits" scheme in place ready for when unemployment is much higher.
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The problem is not the benefits. To give a personal example:

The Carlsberg brewery in Cyprus was looking for a Mechanical Engineer. Starting salary was 1800euros. Once austerity measures were introduced in Greece, a lot of Greeks came over, because of the same language and similar culture.
In Cyprus a starting salary of 1800euros before tax is considered to be at best low, with the current prices of the market. Greeks come over, and ask for the same job, but when asked how much they want, they say 600euros.
Same happened in most sectors.
 
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