Cyprus-Forum.com

[appel]

The banking system and payment system in Iceland did not even shut down for a single minute during the collapse.

The Cyprian banking system and payment system has been shut down for a week.

Iceland is a small (only 320,000 people) homogenous island nation where family values are prime, one of the most friendliest and peaceful nations on Earth. The protests that followed were the most violent in our history, and more reminiscent of a revolution.

People tried to storm the parliament, threw rocks at the police (unthinkable act before the collapse), tried to attack the prime minister and parliamentary members.





How I experienced it:



If SHTF in Cyprus, beware, social unrest will follow. It may be a mix between Iceland style crash and Argentinian style crash.

[Oceanside50]

I've read that total deposits in Cyprus are at €80-90 billion.

€17 billion is a lot of money, but does it stop the banks from succumbing to bank runs? I don't believe so.

And remember, €17 billion is needed to recapitalize the banks, PRE-PANIC, in the state they were weeks/months before the current situation. This amount does not take into account run on the banks.

You might need closer to €40 billion to re-open the banks today.


For such a tiny nation of 1 million, this is a huge gamble, especially if the state is guaranteeing this €17 billion "loan".

yeap you make some good points, and what you are truly saying is that things have crashed as we speak....banking system in Cyprus is on its knees

[Tim Drayton]

It is important to learn from what happened in Iceland, but we must avoid absolute determinism: because one thing happened in Iceland this does not mean that it necessarily must happen in Cyprus. There are two important differences with Cyprus, too: it is an EU member state and uses the European common currency.
According to the news just now, some kind of B plan seems to be emerging, anyway. Let's hope it comes off.

[Sonnyboy]

It is important to learn from what happened in Iceland, but we must avoid absolute determinism: because one thing happened in Iceland this does not mean that it necessarily must happen in Cyprus. There are two important differences with Cyprus, too: it is an EU member state and uses the European common currency.
According to the news just now, some kind of B plan seems to be emerging, anyway. Let's hope it comes off.

Yes. I really don't buy into appel's doom and gloom scenario. Cyprus is not Iceland (thank the Lord).
Looks like a deal with troika/EU is there to be struck - EU really don't want to see the Russians getting any more of a foothold in the area. Politically it just doesn't make sense to allow Cyprus to go to the wall over what is - in the greater scheme of things - a pretty small amount.

[appel]

Best case scenario, your current unemployment rate will rise from 15% to something more... maybe 25%.

Current unemployment in Iceland is 5,8%, and peaked to maybe around 10% after the crash.

So when you say Cyprus won't be Iceland, you're quite right.

[kurupetos]

Appel maybe you are right in a couple of points, but don't forget that Iceland is not part of the Eurozone. It's not even an EU member!

Our currency is the euro and because of it we also have a rescue plan. Now we are just looking to find a plan B that won't involve deposits' taxation.

If everything fails, we could accept the original eurogroup proposal.

[kurupetos]

Best case scenario, your current unemployment rate will rise from 15% to something more... maybe 25%.

Current unemployment in Iceland is 5,8%, and peaked to maybe around 10% after the crash.

So when you say Cyprus won't be Iceland, you're quite right.

Cypriot citizens can seek employment in every part of the EU, with zero restrictions.

[B0B]

typical state of denial

does anyone really expect germany to change their policy?
monday morning the headlines will read
"cyprus is out of eu and the eurozone"

[CrookedRiverGuy]

It is important to learn from what happened in Iceland, but we must avoid absolute determinism: because one thing happened in Iceland this does not mean that it necessarily must happen in Cyprus. There are two important differences with Cyprus, too: it is an EU member state and uses the European common currency.
According to the news just now, some kind of B plan seems to be emerging, anyway. Let's hope it comes off.

Well, I'm not really sure it makes you benefit too much:
>> Currency: It was possible to let the Icelandic Crown go south. You don't have this degree of freedom
>> EU state: Being a member AND within €-zone clearly makes you a hostage. Some people might think it's the other way around, but I have to disappoint you - it ain't necessarily so

[GreekIslandGirl]

I don't think we are hostages. We are players.

The Euro belongs to Cyprus too.