Shock in Cyprus as savers face bailout levy

[Euler]

People in Cyprus have reacted with shock to news of a one-off levy of up to 10% on savings as part of a 10bn-euro (£8.7bn; $13bn) bailout agreed in Brussels.

Savers could be seen queuing at cash machines amid resentment at the charge.

http://www.bbc.co.uk/news/world-europe-21814325

[Euler]

Russian money

There has also been speculation that Russia could help finance the bailout by extending a 2.5bn-euro loan already made to Cyprus.

Cyprus Finance Minister Michael Sarris will travel to Moscow for meetings on Monday, reports say.

"My understanding is that the Russian government is ready to make a contribution with an extension of the loan and a reduction of the interest rate," said the EU's top economic official, Olli Rehn.

European regulators and politicians are convinced that a vast amount of cash in Cypriot banks belongs to Russian money launderers, our business editor writes.

Few German politicians would vote for a Cyprus rescue that simultaneously rescued these launderers so the only way to make the bailout palatable to the German parliament was to tax the launderers, too, he says.

[superfrank]

a wealth tax! i wonder if it's just those with cash assets that get stung, i expect it will be.

govts can't keep bailing out the the wealthy and borrowing ad infinitum.

Europe Does It Again: Cyprus Depositor Haircut "Bailout" Turns Into Saver "Panic", Frozen Assets, Bank Runs, Broken ATMs
http://www.zerohedge.com/news/2013-03-1 ... nk-runs-br

[_PP_]

This decision is unbelievable... What the hell were they thinking?

This Cyprus situation will definitely have a ripple effect they surely didn't accounted for... What message are they trying to pass on? I imagine the craziness that is going to happen monday morning at the markets.

Legitimating the action of stealing money from bank accounts... From today, everything is possible. I'll put my cowboy hat from now on.

[Iron]

These bailouts are designed to save the Cypriot banks.

However, if we assume for argument's sake that there is a run on their banks next week, won't those banks be screwed anyway?

I think this is a worrying development. Banks need deposits in order to lend money to businesses and thereby fund economic growth. But if people start putting their money under their mattresses to prevent the state from stealing it, then how are the banks going to be able to lend money to businesses? And if they don't, who will? The mafia?

Jeff

[CaerMyrddin]

This is something already heard to be possible in other countries. Now that Pandora's box is open, who follows next?

[superfrank]

FX Market Opens, EUR Hammered
http://www.zerohedge.com/news/2013-03-1 ... open-30pts

German Commerzbank Suggests Wealth Tax In Italy Next
http://www.zerohedge.com/news/2013-03-1 ... italy-next

i'm gonna make a prediction... this Cypriot haircut for savers will be reversed within the next 24 hours. it could start bank runs in the PIIGS and their banks are totally screwed anyway. i think this was testing the water to see what they can get away with (on German demands), but i doubt they can.

[convoysur-2]

its going to happen in ireland also.
i have a friend who worked in the court house for 30 years and he knows all the revenue sheriffs etc,
the public dont know yet but the gouvermaent has already set up departements in the revenue offices to take money from peoples bank accounts who have not paid there revenue or property tax,they already have all there bank details etc and are ready to strike when the deadline arrives which i believe is end of march.
but where will it end when they can take money from your bloody bank account,,,?????

[superfrank]

sooner or later the sovereign debt issue has to be tackled and we now have 3 different approaches it seems:

- the US remains in denial and thinks that a confidence trick of boosting assets prices with printed money is going to lead to a growth miracle and that the $'s reserve currency status means they can borrow[print] to infinity.

- the UK is trying to solve the problem by currency debasement and inflation.

- the Eurozone (Germany) don't much fancy that method (printing/inflation) after Weimar and so are imposing all sorts of conditions on the f*cked EZ countries so they don't drag Germany down with them.

interesting times.

[Zapata]

Time for a rant.

http://www.youtube.com/watch?v=YDXtHsz2q6Q

[convoysur-2]

yer man seems a wee bit mad in the head.!!!
but he speaks the truth ...lol

[superfrank]

Time for a rant.

http://www.youtube.com/watch?v=YDXtHsz2q6Q

so funny. he makes a lot of good points though and people DO need to wake up.

[switesh]

Maybe I have a bit of book theory spinning in my head, so would someone care to explain why they aren't following the normal course of action - which would be:

• To let common Stockholders take the first hit since Equity gets wiped out first in case of bankruptcy or any sign of financial trouble

• The, let the Bondholders (and Preferred's) take a haircut

• And lastly, file for chapter 7 and liquidate all bank assets (if they aren't toxic)

Why in the world would they penalize Depositors? It's like biting the hand that feeds you.

[sweetybt]

It's like biting the hand that feeds you.

It's like Betfair have taken over the IMF

[Iron]

'One does not steal Russian mafia money and get away with it'.

Read more: http://www.businessinsider.com/gartman- ... z2NvPlSYq6