Cyprus-Forum.com

[GreekIslandGirl]

Not true. Our gas deposits worth a lot more than the 5.8 billion that are taken from depositors today... according to some they worth about €100 billion. Even if we get only half of that (50 billion) then depositors today could be given just 10% of the shares... and that means that just about 4% would be the Russians and British. We are already giving far more to foreigners with the deals we are making with the various foreign companies like Noble, Total etc. I agree with what Jerry said and I said the same earlier... all depositors should get something that can have a real worth in return. Both the Cypriots and the foreigners ... if you want to screw the foreigners then why would they invest in Cyprus ever again? If they get something valuable that they can cash in for a good profit in 10 years from now then the trust in Cyprus as a good place to invest will be restored.

I meant in relative terms to the equivalent of the levy and not as a fixed sum of what the Gas reserves are worth.

But I'm not for the selling off of the Gas. We need a strong government that would negotiate the money raised from the Gas as going towards national salvation and NOT individual profiteers' pockets! They need to do deal with Germany-France etc towards removing the Turkish presence on the island in exchange for the Gas. If we sell the Gas to individuals, it is wasted.

[Viewpoint]

Are these the EU principles and solutions that you try to sell us? where is Kikapoo when you need him?

Can someone confirm that we have this right, 10% is going to taken from deposits over 100.000 euros? or is 10% being taken from interest earnings?

[cyprusgrump]

Are these the EU principles and solutions that you try to sell us? where is Kikapoo when you need him?

Can someone confirm that we have this right, 10% is going to taken from deposits over 100.000 euros? or is 10% being taken from interest earnings?

From deposits.

I gather the tax on interest from deposits may also increase to a massive 30%!

[Viewpoint]

Are these the EU principles and solutions that you try to sell us? where is Kikapoo when you need him?

Can someone confirm that we have this right, 10% is going to taken from deposits over 100.000 euros? or is 10% being taken from interest earnings?

From deposits.

I gather the tax on interest from deposits may also increase to a massive 30%!

Time you crossed the border and invested in TRNC banks, our banks only deduct 10% off the interest earned.

[Jerry]

Are these the EU principles and solutions that you try to sell us? where is Kikapoo when you need him?

Can someone confirm that we have this right, 10% is going to taken from deposits over 100.000 euros? or is 10% being taken from interest earnings?

From deposits.

I gather the tax on interest from deposits may also increase to a massive 30%!

Time you crossed the border and invested in TRNC banks, our banks only deduct 10% off the interest earned.

Smartarse- without the financial prop you get from Turkey you lot would be living in mud huts and eating berries so don't try and be clever, your turn will come soon enough.

[CopperLine]

It's headline news in the UK, what has happened is "bigger" than Cyprus. It's a pity we can't get as much international coverage on the Cyprus Problem. We will probably never know if it was the only way. I believe Cyprus has had a "false economy" for decades, I recall being told back in the early 70s that government and employees got really good pensions and retired earlier than people in UK, I wondered how they could afford it with such low tax rates.

There's going to be a few anomalies, will accounts where a business stashes its VAT and PAYE (do they have them in Cyprus?) be hit, same goes for charities? What if someone contracts to buy a house and now does not have enough in the bank to pay for it. Will the predicted flood of Russian tourists now materialise? I know where I wouldn't go now if I were Russian.

Little Cyprus has been made an example of to keep the rest of the EU aspiring bankrupts in line.

I think that this story is getting coverage in the UK for two reasons. First, it fulfils the Europhobe prejudices of the political right, from the Daily Hate to UKIP and the Tory party. So it reflects internal British politics as much as it does Cyprus' predicament. Second, and more important, it reflects a crucial political calculation, not by the EU, but by private capital in charge of central banks, how far they can go. Cyprus is a guinea-pig for the rest of the PIIGS and any future piglets. Various measures have been taken to secure capital through the financial crises subsequent to or continuing from the 2008 crisis. No formula has worked yet, and in fact, try as they have, the privately-controlled central banks have succeeded in compounding trouble with trouble. Now, Cyprus with less than 0.2% of EU GDP - a tiny, tiny fish in a huge pond - and a politically negligible government by EU standards, and with no powerful lobby in international finance, and financially-strapped by the Greek catastrophe, has become the testing ground of a new and very risky policy. That policy is effectively to bankrupt the Cyprus banks without declaring bankruptcy, not even declaring a default. The attempted 'trick' this time is an enforced debt-equity swap applicable to all depositors (albeit at varying rates). This really is a sleight of hand which the enforcers just might get away with because of the relative unimportance of the Cyprus economy, the relatively small amounts of money (by regional standards) at stake, and the lack of Cypriot political clout.

If this ruse has a stabilising effect in Cyprus then expect to see similar efforts in progressively bigger fish. If the rot continues, the central bankers reason, it has only been at the cost of tiny Cyprus.

The privately controlled central bankers can hide behind the anti-EU rhetoric (everybody blaming the EU or the Euro for what is essentially a banking regulatory failure and not a currency or EU public policy failure) whilst attempting to stabilise the financial order through a draconian measure. George Osborne is suggesting that British depositors in Cyprus banks will be protected/compensated, and in so doing, once again, plays the Europhobe card. Cheap political points acquired on the back of a Cyprus that can be sold down the river with impunity.

So yes, "Little Cyprus has been made an example of to keep the rest of the EU aspiring bankrupts in line."

[sven]

They haven't signed yet but those depositors who will be hit on Tuesday (I am one of them) will take a haircut on their savings but receive equity in the banks in exchange. The shares will probably be worth less than their face value now but possibly in 10+ years, depositors may see a return.

-The corporate tax rate will likely go up by 2.5% to boost government revenues
-the banking sector will be downsized bringing it inline with EU averages.
-other SGO's will likely be privatised to boost government revenues and hopefully, benefiting the consumer.
-other players like the IMF and Russia are more likely to contribute to the bailout package.
-In 5 years, gas is likely to come to market.
-the debt sustainability will be manageable with a target to pay it off in 8 years.

Someone has to pay for this gross mismanagement of the economy over the years but the remedy could be a lot worse, a default would be a disaster and potentially a total loss of the banking sector.

Hi Maximus, Whatever they do now, the banks have nowhere to go but fail. Swapping bits of paper called shares, that are already worhless for THE PEOPLES SAVINGS, it is 'THEFT' not a 'LEVY'. The people are already struggling to make ends meet, so what do they do now, borrow money to meet the short fall in their saving, paying back the money borrowed PLUS interest. The reason the bits of paper are and will remain worthless is now NOBODY has any faith in the Banks or Government to protect their savings, so whatever happens, when the banks open, whether that is on Tuesday or in six weeks time, THE PEOPLE are going to take what they have left, out of the banks, and that IS going to cause the banks to collapse anyway. This is supposed to be a one off 'LEVY' (THEFT), the 6.7% to 9.9% is taken out of everybody's account, of which the first 100,000.00 Euros was supposed to be protected, which turns out not to be true. The Instigators of this 'LEVY' (THEFT) came to the table demanding 40% to be stolen from the savings of the people. Come Tuesday, the people once bitten will be twice shy, and WILL withdraw their money, now that would mean the banks don't have what they thought they would have, long and short is the banks/Government would then be forced to come back for more, what would the percentage be this time 10%, maybe the rest of 30%, equalling the 40% first demanded. You would have to be extremely gullible to leave any money in the banks, and therefore as far as the banks collapsing is concerned it would not matter what they did on Tuesday, it is a loose loose situation.
I also have to say, that the above scenario, would be known, by the bankers, so what they have done is stolen what they could, and (hoped-correction)expected they could con the majority into leaving their money in the bank, so they could come and raid the savers at some time in the future. There is a saying ""Give a man a gun and he can rob a bank. Give a man a bank and he can rob the world." how prophetic.
I would encourage that people should consider what ICELAND has done, and ask yourselves why that piece of good news has been kept out of your Mainstream Media, and out of the consciousness of the people of the world. You may argue with me here, but there is NO honesty or integrity left in Banking or Government (at the higher levels), Democracy has failed, it is just a case of how long they can keep the charade going, and then what happens ?, I really do dread to think. Maybe, just maybe , the people might just now see what is actually happening and be able to do something about it. "The Confessions Of An Economic Hitman" is a book, film doc and interview by John Perkins, who has also advised ICELAND. I suggest Cyprus does what the Icelanders did. all the best sven

[GreekIslandGirl]

Good analysis, CopperLine.

But meanwhile, the wealthy non-EU-zone depositors (mostly Russians and Brits) will get to own some of Cyprus' banking sector.

It's a win-win day for bankers and the wealthy depositors.

[cyprusgrump]

They haven't signed yet but those depositors who will be hit on Tuesday (I am one of them) will take a haircut on their savings but receive equity in the banks in exchange. The shares will probably be worth less than their face value now but possibly in 10+ years, depositors may see a return.

-The corporate tax rate will likely go up by 2.5% to boost government revenues
-the banking sector will be downsized bringing it inline with EU averages.
-other SGO's will likely be privatised to boost government revenues and hopefully, benefiting the consumer.
-other players like the IMF and Russia are more likely to contribute to the bailout package.
-In 5 years, gas is likely to come to market.
-the debt sustainability will be manageable with a target to pay it off in 8 years.

Someone has to pay for this gross mismanagement of the economy over the years but the remedy could be a lot worse, a default would be a disaster and potentially a total loss of the banking sector.

Hi Maximus, Whatever they do now, the banks have nowhere to go but fail. Swapping bits of paper called shares, that are already worhless for THE PEOPLES SAVINGS, it is 'THEFT' not a 'LEVY'. The people are already struggling to make ends meet, so what do they do now, borrow money to meet the short fall in their saving, paying back the money borrowed PLUS interest. The reason the bits of paper are and will remain worthless is now NOBODY has any faith in the Banks or Government to protect their savings, so whatever happens, when the banks open, whether that is on Tuesday or in six weeks time, THE PEOPLE are going to take what they have left, out of the banks, and that IS going to cause the banks to collapse anyway. This is supposed to be a one off 'LEVY' (THEFT), the 6.7% to 9.9% is taken out of everybodies account, of which the first 100,000.00 Euros was supposed to be protected, which turns out not to be true. The Instigators of this 'LEVY' (THEFT) came to the table demanding 40% to be stolen from the savings of the people. Come Tuesday, the people once bitten will be twice shy, and WILL withdraw their money, now that would mean the banks don't have what they thought they would have, long and short is the banks/Government would then be forced to come back for more, what would the percentage be this time 10%, maybe the rest of 30%, equalling the 40% first demanded. You would have to be extremely guillible to leave any money in the banks, and therefore as far as the banks collapsing is concerned it would not matter what they did on Tuesday, it is a loose loose situation.
I also have to say, that the above scenario, would be known, by the bankers, so what they have done is stolen what they could, and hoped they could con the majority into leaving their money in the bank, so they could come and raid the savers at some time in the future. There is a saying ""Give a man a gun and he can rob a bank. Give a man a bank and he can rob the world." how prothetic.
I would encourage that people should consider what ICELAND has done, and ask yourselves why that piece of good news has been kept out of your Mainstream Media, and out of the conciousness of the people of the world. You may argue with me here, but there is NO honesty or integrity left in Banking or Government (at the higher levels), Democracy has failed, it is just a case of how long they can keep the charade going, and then what happens ?, I really do dread to think. Maybe, just maybe , the people might just now see what is actually happening and be able to sdo omething about it. "The Confessions Of An Economic Hitman" is a book, film doc and interview by John Perkins, who has also advised ICELAND. I suggest Cyprus does what the Icelanders did. all the best sven

Good post!

I've been saying for ages that Greece and Cyprus should default and remove themselves from the chains of the €uro...

If the banks do open on Tuesday they'll run out of money by lunchtime...

[Demonax]

Cyprus state broadcaster CyBC reported on Saturday that German Finance Minister actually entered the Eurogroup meeting on Friday proposing a 40 percent haircut on Cypriot bank accounts. Sarris stated on Saturday that this had also been the proposal of the International Monetary Fund.

If with the 10% they can get 5.8mil then 40% would mean 23.2mil (4 times more). That is far more than what we need and with such amount we wouldn't need any loan from anybody else. I think they are bullshitting us! Anastasiades the "Yes Man" agreed to everything they asked for ... all this talk about 40% and nonsense are just so Anastasiades can claim that he "achieved" something better. In reality he achieved nothing! I say let Laiki fail, then take all its assets for the Cypriot depositors. This will trip the situation in Greece and soon enough like a domino the eurozone will be destroyed... or they will have to pay up 10 times as much money to save it.That will teach them to take our rights more seriously!

Is it so unbelievable that Anastasiades rejected this proposal in favour of a smaller levy on deposits over 100k and a smaller levy on savings below 100k? We can speculate on the reasons – but not wanting to piss off Russia looks the most likely given that Sarris was due to go to Russia to ask for re-negotiation of their loan.

Besides, I'm sure I read an estimate that a figure of around 15.5 per cent on deposits above 100k would mean there'd be no need for cuts on deposits below 100k. So why did Anastasiades and Sarris choose to drag in savers whose deposits are guaranteed? It's the wish to preserve Cyprus as a tax-haven again.

In hindsight, this was a bad choice as it's done more damage to Cypriot banking confidence than just going after non-guaranteed deposits at a higher rate.