The Eurozone Crisis Thread

cyprus's finance minister 17 days ago:

Cyprus's new finance minister on Friday ruled out a haircut, or imposed losses, on bank deposits to ease a financial bailout from international lenders, now stalled amid worries about debt sustainability.

"Really and categorically - and this doesn't only apply in the case of Cyprus but for the world over and the euro zone - there really couldn't be a more stupid idea," Michael Sarris, who took over his post on Friday, told reporters.

Sarris, a widely respected economist, was the first appointment of new Cypriot President Nicos Anastasiades, who won presidential elections on Feb. 24 on a platform of constructively attempting to seek a deal with lenders.

letting the economy fall apart would not result in communism or anarchism or what I believe may be ideal: localised economies

it would result in exploitation, foreign first-world sharks moving in and buying up land and people, cyprus finally sublimated as luxury mediterranean commodity with no autonomy whatsoever (more so than at present), slave labour and capitalism of a far nasties kind than this bureaucratic fudge

what's the solution? dunno. open table.

first maybe return northern autonomy to cyprus government

what would that do?

all for what isn't actually that much money.

is it really not that much? or is it only considered too much relative to cyprus gdp?

it's not that much from the POV of the ECB

haha this is a clusterfuck

This is so dumb and counterproductive and people at all ends of the political spectrum seem to agree, but whatever this is/was, it certainly isn't socialism.

Some background on the Russian connection:

http://m.bbc.co.uk/news/business-21831943

Lots of that money is filtering through Cyprus to the rest of the EU at the moment. Inflating property prices in London too. A Cypriot agent that acts on behalf of Russian clients offered my mother an insane amount of money for some commercial property she inherited - more than twice the market value, last year.

Rethinking this. If it pisses enough people off to bring about mass redeployment of funds into credit unions, it'll have been an inadvertent success. Otherwise, it's enforced chipping-in where what is chipped into is most probably a reloading gun

oh ... kay.

Cyprus may drop tax for small savers

Cyprus now says bank depositors with savings under $26,000 would be exempt from a levy, amid continuing outrage over a bailout plan.

Better. Exponential curve, Cyprus!

every article i've read about it is a mixture of bafflement and anger. the ft seemed kind of amused at the incompetence this morning, implying that basically what happened was all the negotiators were very tired and got confused over the weekend. shops, hotels, etc. refusing credit cards apparently.

i imagine there was some idea of an ultimatum like "if you're going to make us do this, we'll do it to everyone!" and then everyone else just called the bluff and whoops.

http://krugman.blogs.nytimes.com/2013/03/17/the-cypriot-haircut/

yeah what krugman says is what I don't get about this -- why isn't this just going to make everyone feel less secure about having their money in Cypriot banks? I mean maybe some of the littler guys won't -- as a cypriot electrician interviewed on NPR said, "where would I put it?" But overall it can't be great for their banking system.

alphaville has some speculation this is a move to lean on russia for a heavier hand in the bailout.

Russia's pretty heavily exposed in Cyprus, right?

yeah max otm in the other thread that this isn't the fait accompli that i (and others) thought it was

i guess the prospect of literal defenestration is proving a strong disincentive

if anything the russians will be hit harder now, since the money still "has to be" raised

weird "mouse that roared" vibe from this

Well Cyprus mps voted it down.

cyprus to EU: gfy

Prime Minister Dmitry Medvedev said the euro zone decision seemed to be aimed at confiscating someone else's property.

"This practice, unfortunately, was well known and familiar in the Soviet period," Medvedev was quoted as saying by Russian media.

Oh man

Plan B, say government advisers, would require state pension funds to hand over about €4 billion of their reserves. Cyprus would ask Russia for the other €2 billion, arguing that Russian companies, with an estimated €25 billion stashed in Cyprus, would then no longer face the prospect of losing 10-12% of their deposits. Michalis Sarris, the finance minister, flew to Moscow as soon it became clear the bill would not be approved.

that's one of the things we did <3 <3 <3 governments/banks

haha ok no touching savings but wipe out retiree's pensions sure that's legit.

Germany's finance minister has warned Cyprus that its crisis-stricken banks may never be able to reopen if it rejects the terms of a bailout.

Wolfgang Schaeuble said major Cypriot banks were "insolvent if there are no emergency funds".

cyprus should just extort russia into paying the whole bill

don't even touch the savings

http://static.guim.co.uk/sys-images/Guardian/Pix/pixies/2013/3/19/1363725322421/Protesters-outside-Cyprio-008.jpg

Marios Mavrides, a government MP and former finance minister, raised the prospect of the country becoming the first to leave the euro. He told BBC2's Newsnight: "If we cannot come up with the €5.8bn in a few days then I think we will go to the Cyprus pound. That will be the end of Cyprus in the eurozone. We're going to exhaust all other possibilities but what can we do? If we have no other solution we cannot leave the people without money."

wtm

to add to my panicked and unproductive waffling upthread, I'm going to Cyprus in September to see my grandmother. will be able to report back on the riotous disrepair utopian barter economy

Prime Minister Dmitry Medvedev said the euro zone decision seemed to be aimed at confiscating someone else's property.

"This practice, unfortunately, was well known and familiar in the Soviet period," Medvedev was quoted as saying by Russian media.

― Mordy, Tuesday, March 19, 2013 10:22 PM Bookmark Flag Post Permalink

"Thankfully," he continued to himself, stroking his siamese cat, "today we conceal it much better...muhahahaha...HAHAHAHAHAHAAAAAA!"

Cops at lagarde's apartment?

Heard something about that too...

http://www.guardian.co.uk/world/2013/mar/20/christine-lagarde-flat-raided-police

yves smith gives her take:

http://www.nakedcapitalism.com/2013/03/cyprus-bailout-stupidity-short-sightedness-something-else.html

14. Even despite all the arbitrariness above, at least it solves the problem right???

Absolutely not. You will haircut 10% of deposits on day 1 to make up a capital shortfall and promptly watch 30% of the rest of the deposits flee the country, leading to a much bigger capital hole that Europe will have to fill.

In addition, this will severely cramp Cyprus’s main economic driver the last 2 years (selling real estate, tourism and accounting services to Russians) so any concept that it will make the debt “more sustainable” comes from a lunatic place in financial modeling. Cyprus is a 78% services-based economy. So, if you assume that GDP growth is exactly the same before and after you confiscate the assets of your clients, well, I have a solvent Cypriot bank to sell to you…

This is so obviously risky, that the more paranoid commentators believe it is a deliberate plan by Germany to end up as a multi-deca-billion creditor to Cyprus to which the pledging its oil and gas reserves is the only solution. I don’t think this is the case, but boy it is getting hard to believe that they are this short-sighted.

all the front pages in germany today are of the demos in cyprus where people held up pictures of merkel in nazi uniform, etc. the german elections later this year are going to be oh boy.

why don't the ppl in cyprus realize that this isn't the germans fault but the fault of an elite of ideologues???

doesn't sell papers.

Definitely German colonisation that isn't a paranoid fantasy

Would welcome it tbh

Could do worse than bratwurst and on-time trains tbh

Dunphy's demand of staunton takes new and sinister significance

http://blogs.reuters.com/felix-salmon/2013/03/22/cyprus-what-are-the-russians-playing-at/

https://www.independent.co.uk/news/world/europe/coronavirus-europe-economy-recovery-france-germany-grants-macron-merkel-a9520566.html

Breaking: Apple and Ireland have won their appeal against the European Commission's €13.1 billion ruling:

The General Court of the European Union annuls the decision taken by the
Commission regarding the Irish tax rulings in favour of Apple

— Tony Connelly (@tconnellyRTE) July 15, 2020

Seems bad. Potentially no impediment to Eurozone countries setting an effective 0.005% tax rate on international companies afaict, though it will be appealed.

ffffs

If Berlusconi somehow ends up as PM that will be another pretty good indication of where 2021 is headed https://t.co/sQYdfqxzmu

— Populism Updates (@PopulismUpdates) January 12, 2021

No, grazie.