Cyprus-Forum.com

[johnny1]

read this part from bbc news.....

The negotiators on the Cyprus side also got it wrong. Awful though the levy was, the Cypriot president thought he would be able to blame all of it on Brussels and Frankfurt. Unfortunately for him, Brussels and Frankfurt felt differently.

Officials had been surprised, in the negotiations in Brussels, that the Cyprus side were willing to impose such a high levy on the poorest savers, in order to limit the "sticker shock" for Russian high rollers with holdings of more than 100,000 euros.

On Sunday, they were quick to share that surprise with well-placed journalists, just as the Cyprus government was trying to dump everything on Berlin.

[Sotos]

Problem is that if the Russians and other big depositors pull their money from our banks then that money will become debt for Cyprus, which we will all have to pay through taxes... or another haircut.

[Demonax]

It's easy to say that Anastasiades is to blame. But it was the Eurogroup who signed off on the deal and who are now blaming each other now that the implications are being understood.

The issue is that this "bailout" has been so badly managed by all concerned that whatever happens from now, confidence has been undermined and the economy will suffer. This will lead to another bailout down the line.

[Demonax]

Officials had been surprised, in the negotiations in Brussels, that the Cyprus side were willing to impose such a high levy on the poorest savers, in order to limit the "sticker shock" for Russian high rollers with holdings of more than 100,000 euros.

The amount the EU wants from deposits is equivalent to 35 per cent of GDP. There is no way to do that and manage it well. This was not Anastasiades' proposal. The EU decided this was going to be a raid on deposits. That is the source of the problem. Not whether smaller depositors should also be included. The entire strategy is dangerous and unworkable with unpredictable and damaging consequences. Anastasiades was backed into a corner and caved in. But the policy was not his to start with.

[supporttheunderdog]

Yes the Cyprus president is to blame , but which one?

The problems with the banking sector long predate the current presidency: there was the big spat between the former Central Bank Governor, Orphanides, and Chris Toffee Arse, where according to Orphanides there were significant problems due to excessive government spending which turned a surplus into a deficit and where Orphanides highlighted painful measures had to be taken as this would have a knock on effect on the local banks: was anything effective done?

Obviously not enough.

see http://www.cyprusnewsreport.com/?q=node/5659

Then our bankers were oh so heavily into Greece....

And how much is down to the longstanding issue of non-performing loans to local business and the property developers in particular, which agin are old problems?

At least this guy has had the balls to take a decision which he knew would not be popular unlike the last incumbent.

[Demonax]

At least this guy has had the balls to take a decision which he knew would not be popular unlike the last incumbent.

Taking an unpopular decision doesn't mean it's the right decision. Anastasiades could have walked out and refused to bargain on those terms. That would've made him more of a statesman in my eyes. But then again, he does have previous of caving in when faced with blackmail by the international community.

[Demonax]

The Financial Times has reliable evidence for how the scenario unfolded and it is clearly the European Commission who were responsible for initiating the idea of a levy on small depositors. But it should be made clear this was in reaction to German and IMF intransigence.

By their own admission, the first organisation to raise the prospect of taxing small depositors at the Friday night meeting was the European Commission. But the proposal made at the outset of talks by Olli Rehn, the Commission’s economic chief, was not motivated by a desire to plunder old ladies’ bank accounts just for the sake of it. It was because the alternatives seemed even worse.

“If Germany and its allies had not taken such a tough line…the Commission would never have had to resort to making any compromise proposal,” said one official sympathetic to the Cypriots. “There would have been other ways to achieve €7bn,” the official added, referring to the amount Berlin wanted to cut from the bailout’s €17bn price tag.

http://blogs.ft.com/brusselsblog/2013/0 ... me-begins/

[Demonax]

Looks like Sarris is to take the fall:

Cyprus Finance Minister Sarris on his way out [update]

Cypriot Finance Minister Michalis Sarris is about to be replaced upon his return from his current trip to Moscow, Kathimerini understands, as he no longer enjoys the support of President Nicos Anastasiades following his handling of the crisis, although the minister denied there was any truth in that.

Sarris is seen to have failed to show the resistance Nicosia needed in order to avert the set of measures that has undermined the credibility of the Cypriot credit system and created turmoil across the world's markets.

He is also considered to be the target of criticism by Moscow for accepting the Eurogroup decision of last Saturday in favor of a haircut on all bank accounts.

http://www.ekathimerini.com/4dcgi/_w_ar ... 013_488623

[kurupetos]

Looks like Sarris is to take the fall:

Cyprus Finance Minister Sarris on his way out [update]

Cypriot Finance Minister Michalis Sarris is about to be replaced upon his return from his current trip to Moscow, Kathimerini understands, as he no longer enjoys the support of President Nicos Anastasiades following his handling of the crisis, although the minister denied there was any truth in that.

Sarris is seen to have failed to show the resistance Nicosia needed in order to avert the set of measures that has undermined the credibility of the Cypriot credit system and created turmoil across the world's markets.

He is also considered to be the target of criticism by Moscow for accepting the Eurogroup decision of last Saturday in favor of a haircut on all bank accounts.

http://www.ekathimerini.com/4dcgi/_w_ar ... 013_488623

According to CyBC the above is bollocks.

[Lit]

It's easy to say that Anastasiades is to blame.

It certainly is. And of course I am going to blame him...he is the President is he not? All I know is we have Europe mad at us as well as Russia for not informing them about the levy. He certainly underestimated the public reaction to the plan he accepted. "Yes man" Nick wanted so much to be President, well now that he is....let the scorn begin.

BTW he should have stepped out of politics when he said YES to the Annan plan. Anyone who would accept such a plan has NO right to run this country!

What a disaster!