Cyprus bail out deal

pipie

Rightwing wrote: »

Whilst all that is true, that's not what the poster was referring to.

How can weak cuntries like spain/Greece/Cyprus compete with the Germans ? simple... They can't.

They need either lower costs or/and a weaker currency.

They don’t compete, they did not before and did not after the single currency, Germans do big industry, Cyprus does Sun Tourism (and International Finance)

clairefontaine

pipie wrote: »

They don’t compete, they did not before and did not after the single currency, Germans do big industry, Cyprus does Sun Tourism (and International Finance)

Yes but before teh EU their currency was so cheap it attracted a lot more tourism.

mickdw

20% levy on bank of cyprus deposits. I cant see how this bank and others can survive.
Zero confidence now surely. Watch deposits disappear over coming weeks.

carpejugulum

mickdw wrote: »

Watch deposits disappear over coming weeks.

Where? Because that won't be possible in Cyprus.

pipie

carpejugulum wrote: »

Where? Because that won't be possible in Cyprus.

A lot wont need to move it, as 4.5b has apparently left the country in the last few weeks.
(It's a long time these troubles and deadlines have been known)...

mickdw

carpejugulum wrote: »

Where? Because that won't be possible in Cyprus.

In Cyprus. Whatever people can get their hands on, they will remove from the banking system.

osheen

clairefontaine wrote: »

Yes but before teh EU their currency was so cheap it attracted a lot more tourism.

I always remember the cypriot pound being fairly strong

Good loser

Karl Whelan on radio today said Cyprus will have to leave Euro shortly (next week?) and their banking model is burst, never to recover. The two major banks will have different proposals.

mickdw

Good loser wrote: »

Karl Whelan on radio today said Cyprus will have to leave Euro shortly (next week?) and their banking model is burst, never to recover. The two major banks will have different proposals.

No doubt. Burst.

maquiladora

Still no agreement between the troika and the government.

Cyprus News Agency quoting a senior official blaming the IMF for being inflexible and introducing new demands every half hour.

Looks like is going down to the wire tomorrow unless the ECB extends the deadline.

Sponge Bob

Have they passed any of those 8 laws in parliament yet??

maquiladora

Sponge Bob wrote: »

Have they passed any of those 8 laws in parliament yet??

All were passed last night apart from the most important one.

pipie

JOB93

pipie wrote: »

There are very few areas in Cyprus where 80k will buy even a one bed apartment.
It’s many years market is hugely over inflated and stagnant, partly due to the title deed scandal , partly due to speculation by large developers and also rising unemployment.
Also - there are many many, unsold and ghost estate/apartment blocks in Cyprus.

Well that's assuming you sold your house for only 100k at these inflated prices. You're not really looking at much of a downgrade at all then.

Hotblack Desiato

osheen wrote: »

I always remember the cypriot pound being fairly strong

Some friends of mine visited Cyprus a year or two before it entered the euro. Their verdict - 'Nice place, but very expensive'...

pipie

JOB93 wrote: »

Well that's assuming you sold your house for only 100k at these inflated prices. You're not really looking at much of a downgrade at all then.

Snaps was correctly saying accounts over 100k would be hit at 20%, not that 100k was the price of his theoretical the sale.
Actually its only BoC proposed at this rate, not all the banks, the rest barring laki are proposed at 4% above 100k and exact details of Laki are still to be confirmed.
However house prices have not fallen yet and I predict they will be slow to fall and will take a good amount of time before a 20% drop is achieved, and 80k will still buy not a lot in Cyprus.

snaps

My point was/is its shocking that bank accounts can be raided. Imagine you've worked and saved all of your life, then all of a sudden you've lost 20% of it. I would be fit to kill. The scary thing is, if it can be done in Cyprus it can be done anywhere.

Amberman

Scofflaw wrote: »

but personal rights are invariably subject to the common good.

cordially,
Scofflaw

Then they aren't really rights, they are fair weather privileges.

handlemaster

will be interesting to see who has the accounts in the bank of cyprus... im guessing the russians arent banking there...

maquiladora

handlemaster wrote: »

will be interesting to see who has the accounts in the bank of cyprus... im guessing the russians arent banking there...

5% of deposits in Bank of Cyprus are Russian.

snaps

Its spineless and cowardly to tax peoples bank accounts. Bank accounts were always supposed to be untouchable and your own money. A person has paid tax on the money they have earned and paid into that account, A 2nd tax like this is more than a kick in the teeth.

Bullseye1

snaps wrote: »

My point was/is its shocking that bank accounts can be raided. Imagine you've worked and saved all of your life, then all of a sudden you've lost 20% of it. I would be fit to kill. The scary thing is, if it can be done in Cyprus it can be done anywhere.

What's more shocking is that banks can go bust and you lose everything. Isn't it the case that if this deal is not done the banks to bust and deposits are lost in there entirety? Maybe the Cypriot government can print their own currency and with bank records issue everyone who had deposits an equivalent in the new currency. But it would soon deflate hugely against other currencies and exports would become extremely expensive.

The Irish government has already raided people's private pensions here so we cannot talk.

Rightwing

pipie wrote: »

They don’t compete, they did not before and did not after the single currency, Germans do big industry, Cyprus does Sun Tourism (and International Finance)

Every country in eurozone competes with each other, a little like a football league, they all compete. You will have a top of the table and relegation area. Cyprus are in the relegation zone, but still compete.

Phoebas

Bullseye1 wrote: »

The Irish government has already raided people's private pensions here so we cannot talk.

And they continue to do so, for the next couple of years I think.

The Cypriot deposit levy is a different thing 'though. When they raided my pension pot, the money they took was actually there. Nobody is actually taking money out of Cypriot deposit accounts - the money simply no longer exists.

Lou.m

carpejugulum wrote: »

But they don't want you to save.

Do they want capital flight? And no one is spending money in Greece or Cyprus. Even people who have it.

Its spineless and cowardly to tax peoples bank accounts. Bank accounts were always supposed to be untouchable and your own money. A person has paid tax on the money they have earned and paid into that account, A 2nd tax like this is more than a kick in the teeth.

I imagine there will be huge increases in Tax evasion....amongst ordinary people and the wealthy now they will have public sympathy too.

handlemaster

they should have hit the russian deposits hard

pipie

handlemaster wrote: »

they should have hit the russian deposits hard

Why?

handlemaster

pipie wrote: »

Why?

Hot tax avoidance / mafia money

murphaph

handlemaster wrote: »

Hot tax avoidance / mafia money

Sure the Cypriots knew this and consciously allowed their banking system to be used to launder it. It's precisely because of this carry on that Cyprus is not getting an easy deal. Germany especially has no intention of simply bailing out a banking system that has been used like this.

handlemaster

murphaph wrote: »

Sure the Cypriots knew this and consciously allowed their banking system to be used to launder it. It's precisely because of this carry on that Cyprus is not getting an easy deal. Germany especially has no intention of simply bailing out a banking system that has been used like this.

were agreed so

pipie

handlemaster wrote: »

Hot tax avoidance / mafia money

Some of it maybe, what %, also does Germany not handle similar Russian money too?

dharma200

pipie wrote: »

Some of it maybe, what %, also does Germany not handle similar Russian money too?

Id say germany will be handling a whole lot of it when it ipmoses such a levy that will destroy Cyprus, its banking system, tourism and of course mafia laundering, which of course has to take place somewhere.........

Bullseye1

handlemaster wrote: »

Hot tax avoidance / mafia money

All of them? Source?

handlemaster

Bullseye1 wrote: »

All of them? Source?

never said all of them . You can read for yourself lots of info on this going back years. cyprus gdp in 2011 17 billion money on deposit just from russian oligards 20 billion.

JOB93

snaps wrote: »

My point was/is its shocking that bank accounts can be raided. Imagine you've worked and saved all of your life, then all of a sudden you've lost 20% of it. I would be fit to kill. The scary thing is, if it can be done in Cyprus it can be done anywhere.

You are 20% worse off nominally, but how much worse off you are in real terms is what's important.

handlemaster

http://www.irishtimes.com/news/world/europe/noonan-rules-out-levy-on-irish-bank-deposits-1.1337133

"We would never hit depositors in Ireland. We believe €100,000 is sacrosanct," Mr Noonan said, referring to the Europe-wide deposit guarantee that protects savings up to that amount.

darkhorse

handlemaster wrote: »

http://www.irishtimes.com/news/world/europe/noonan-rules-out-levy-on-irish-bank-deposits-1.1337133

"We would never hit depositors in Ireland. We believe €100,000 is sacrosanct," Mr Noonan said, referring to the Europe-wide deposit guarantee that protects savings up to that amount.

Well, once Mr Noonan says it, thats ok.:eek:

hmmm

handlemaster wrote: »

We believe €100,000 is sacrosanct," Mr Noonan said, referring to the Europe-wide deposit guarantee that protects savings up to that amount.

But apparently private pensions are fair game. What a stupid decision that was with implications long into the future.

Mr.Micro

handlemaster wrote: »

http://www.irishtimes.com/news/world/europe/noonan-rules-out-levy-on-irish-bank-deposits-1.1337133

"We would never hit depositors in Ireland. We believe €100,000 is sacrosanct," Mr Noonan said, referring to the Europe-wide deposit guarantee that protects savings up to that amount.

I do not believe a word of that. How close were we to a Cyprus situation in that people with savings are hit? It makes people even more cynical that such measure could be used. I must rush to the CU to move my big sum of a few hundred euro before they stick a levy it, to pay for the likes of the Quinns and the billions they owe, the likes of Fitzpatrick and the rest of the rotters.

I suppose the thousands that protested in Cyprus are all Russian mafia as well? Is there any bank that is clean or have accounts that are not linked to crime? I doubt it. Its not enough that people have to endure austerity, even the people who were fiscally prudent, that their savings are a target as well. Disgusting.

hmmm

Mr.Micro wrote: »

Its not enough that people have to endure austerity, even the people who were fiscally prudent, that their savings are a target as well. Disgusting.

If a bank is bankrupt, the savings are gone. I've seen people say today that the Germans are "robbing" the deposits of the Cypriots. That's a complete lack of understanding of how banking works. The deposits are gone, the question now is how much is Germany willing to pay to help prop up the Cypriot economy and allow the banks to recover in time, which should allow them to repay deposits.

handlemaster

hmmm wrote: »

But apparently private pensions are fair game. What a stupid decision that was with implications long into the future.

whats even more interesting is what he didnt say. which was all deposits he just say about guarantee noting more

KyussBishop

handlemaster wrote: »

http://www.irishtimes.com/news/world/europe/noonan-rules-out-levy-on-irish-bank-deposits-1.1337133

"We would never hit depositors in Ireland. We believe €100,000 is sacrosanct," Mr Noonan said, referring to the Europe-wide deposit guarantee that protects savings up to that amount.

Yea I'm sure it was sacrosanct in Cyprus as well, until the EU tried to force them into it; it's not our choice if we need another bailout, because when the EU gives the ultimatum "find the money or your banking system collapses" (which we now see they are willing and eager to do, over a sum as pitiful as €6 billion), nothing is sacred anymore, and they will dip into whatever pots they have to.

Duiske

Deal appears to have been done. A massive 40% hit on deposits over €100,000. That is just savage.

http://www.news.com.au/breaking-news/world/cyprus-in-last-ditch-bailout-talks/story-e6frfkui-1226605081089

Rightwing

The terms, unsurprisingly what zee Germans wanted, are i) Laiki to be wound down; ii) Bank of Cyprus to survive but with deposit haircuts, and iii) deal would see secured deposits in Laiki moved to Bank of Cyprus. In other words, a deal far worse then the original on proposed by the Eurogroup last week - when the banks still existed. The key appears to be the 'saving' of the insured depositors (crucial to avoid a pan-European bank run) and the crushing of the 'whale' depositors. S&P 500 futures and EUR are surging, Gold is dropping modestly. We await final confirmation of the final terms of the final deal once the Cyrpiot people wake up (and don't forget the ECB 'standard of living' rules). The Cypriot Parliament still has to vote for this - and not one of the voted for it last week.

maquiladora

Duiske wrote: »

Deal appears to have been done. A massive 40% hit on deposits over €100,000. That is just savage.

http://www.news.com.au/breaking-news/world/cyprus-in-last-ditch-bailout-talks/story-e6frfkui-1226605081089

Yes, but only in Bank of Cyprus and Laiki though. Other banks untouched.

And because it's not a levy it won't need to go for a vote. The deal is done.

handlemaster

Duiske wrote: »

Deal appears to have been done. A massive 40% hit on deposits over €100,000. That is just savage.

http://www.news.com.au/breaking-news/world/cyprus-in-last-ditch-bailout-talks/story-e6frfkui-1226605081089

hitting they hard so

Bullseye1

Duiske wrote: »

Deal appears to have been done. A massive 40% hit on deposits over €100,000. That is just savage.

http://www.news.com.au/breaking-news/world/cyprus-in-last-ditch-bailout-talks/story-e6frfkui-1226605081089

It seems to be more severe. It looks like your basically ****ed if you have anything over 100,000.

Deposits above €100,000 in both banks, which are not guaranteed under EU law, will be frozen and used to resolve Laiki's debts and recapitalise Bank of Cyprus through a deposit/equity conversion.

- Source RTE.

cson

The madness of this being two depositors; one with €99,999 and the other with €100,001. The latter potentially loses everything.

antoobrien

cson wrote: »

The madness of this being two depositors; one with €99,999 and the other with €100,001. The latter potentially loses everything.

Interesting that, the first 100,000 of any account should be covered under the guarantee. I wonder if this is an actual detail or journalistic misunderstanding.

maninasia

Yeah he loses 1 Euro. Pretty tough.