Germany warns Cyprus ‘banks might never reopen’ if terms of bailout are rejected
Germany's finance minister has warned Cyprus that its crisis-stricken banks may never be able to reopen if it rejects the terms of a bailout. Wolfgang Schaeuble said major Cypriot banks were “insolvent if there are no emergency funds”.
He was speaking after the Cypriot parliament rejected an international bailout deal that would have imposed a one-off tax on bank deposits. Frantic talks are under way to try to agree an alternative plan.
Leaders of political parties in Cyprus are due to meet later after parliament rejected the controversial levy, proposed as part of a 10bn-Euro bailout package.
Not a single MP voted in favour of the controversial deal, sending a clear message to Brussels that the strategy needs a drastic rethink, our correspondent adds.
Late on Tuesday, Mr Schaeuble said that he “regretted” the vote.
”The ECB (European Central Bank) has made it clear that without a reform programme for Cyprus the aid can't continue. Someone has to explain this to the Cypriots and I think there's a danger that they won't be able to open the banks again at all,“ he said.
”Two big Cypriot banks are insolvent if there are no emergency funds from the European Central Bank,” Mr Schauble added.
Cypriot President Nicos Anastasiades called the talks between party leaders when it became clear that the measure would not be passed by parliament. Fearing a run on accounts, Cyprus has shut its banks until at least Thursday. The local stock exchange also remains closed.
Cyprus' banks were badly exposed to Greece, which has itself been the recipient of two huge bailouts.
The rescue deal for Cyprus, announced on Saturday, prompted widespread outrage on the island at the prospect of ordinary savers being forced to pay a levy of 6.75%.
The Cypriot finance ministry announced a change in the plan on Tuesday, to exempt savers with less than 20,000 Euros, while those over 100,000 Euros would still be charged at 9.9%. However, this was not enough to placate critics.
The plan to tax bigger deposits at a higher rate has angered Russia, as Russian nationals hold many of those larger deposits.
And the government fears a higher levy on these larger deposits would prompt many large investors to withdraw from the island and would effectively destroy its financial sector. Russia has also said it may reconsider the terms of a 2.5bn-Euro loan it made to Cyprus in 2011, which was separate from the proposed Euro-zone bailout.
Cypriot Finance Minister Michalis Sarris arrived in Moscow on Tuesday to see if the repayment on that loan could be delayed until 2020, and whether the interest rate could be reduced.
Meanwhile, the UK Ministry of Defence said on Tuesday evening that a plane carrying 1m Euros had arrived in Cyprus as a contingency measure to provide military personnel and their families with emergency loans. The money is to be used for British personnel and their families if cash machines and debit cards stop working.
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38 comments Feed
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Would be nice to see if that's true.
Would like to see that “Too big to fail” theory....fail.
What then?
Start an indoctrination policy for the population over thier claim of sovriegnty over Greece, start to fall out with all thier close neighbours, assume the mentality that they are never wrong, complain to anyone that will listen about how unfair life is when they dont get thier own way and claim God on earth is Cypriot and will sort out all thier problems ....
Last time I checked, Cyprus had never been a part of Greece - and is closer to six or seven other countries than it is to Greece - so that seems a strange thing to say. Just because people are ethnic Greeks doesn't mean they want to be part of Greece.
Personally I hope the Cypriots stick to their guns on this until proper protections are offered for the common folk - that is to say, I have no problem with raping the bank accounts of those who use Cyprus as a tax haven, to avoid paying their dues elsewhere, but ordinary people shouldn't be made to pay the price.
The irony about situations like this is that the British government will be quietly rubbing their hands with glee, because it pushes populist German public opinion closer and closer to populist British, Danish, Swedish & Dutch public opinion about the future of the EU. Not sure I am too happy about that.
At the moment the basically have the world's largest aircraft carrier permanently parked in the extreme east of the Mediterranean. Take those bases out of the equation and there is basically a huge gap in the intelligence, intercept and monitoring capabilities .. a hole that stretches from the UK to Australia and leaves them virtually blind in the Near and Middle East.
And they respond by flying nazi flags, not very nice,
After all lets be fair here,
Who fault is it the Cyprus is in this mess
Whose fault is it Greece Spain Ireland and Portugal is in this mess,
Surely there own governments,
Its not Germanys fault,
But its German money [and ours] and the rest, that is bailing them out,
We say,
Let the EURO collapse,
Let Britain out
And let Germany go her own way.
Just a thought..
still
Russia may well lend them some more corupt money..
The whole concept of banking rests on confidence. If it didn't the bank multipliers simply would not work and the entire system would collapse.
The latest on the Twittersphere is that the Russians are also angling for a naval base in Cyprus. It is beginning to become a strategic as much as economic issue. The eurozone should not be letting the Russians bail out one of its own.
While Cyprus needs to pay its debts it's not as simple as the Argentine situation. It's hands are tied by being bound to the euro and not controlling its own central bank.
I wonder how long the daft idea of European Monetary Union will continue?
Easy to say when it isn't your savings; but I am willing to bet you would be the first to cry foul if the government announced they were going to skim 10% off your savings.
That's fine, all what they should do is give back the cash to the people (depositers) and let the Germans (bond holders aka the gamblers) eat cake. If you gamble, you should think about it that you can also lose.
The Russian bailout will trigger a nervous Europe and USA (nato). They want a military base there plus gas exploration in trade for a bailout.
If the Germans (the ECB = Deutsche Bank and the Bundesbank) don't get what they want (Cyprus accept the bailout and to pay it off, all depositers must pay tax what can get higher every month/year), it will trigger more panic in the Eurozone (will be either bye bye Euro project or it's going to get smaller) and the UK ( a shitty island full of losers and peasants who haven't figured out yet that they are being fooled and robbed..enjoy more austerity) and it will spill over to the biggest creditor of all faster than we think (it's going to happen anyway).. the US..(bye bye dollar).
@9 Just consider. Britain is currently building two aircraft carriers at a cost of £4 billion. Leave the EU and we could afford EIGHT more. Isn't that as many as the Americans have? With £3 billion left over. More destroyers and frigates then.
@15 That's what you “hope”. Trouble is that the UK has ten times more experience than the piss-arse little “countries” of South America. As shown last year. Brazil went wild with joy as it, temporarily, overtook the UK in economic terms. Within months it had been shoved back to its previous place. That's what the UK can do. Because we're good. And we have God on our side.
Sometimes you dispirit me with your apocalyptic financial doomsday prophecies......
May I ask you?
What measures have you personally taken to protect yourself and your family from the inevitable catastrophe you say it’s coming?
Have you bought gold and diamonds?
Have you hoarded water food & guns in your cellar?
Have you acquisited a nice piece of land at the end of the world?
El Think
Chubut, Patagonia Argentina
What measures have you personally taken to protect yourself and your family from the inevitable catastrophe you say it’s coming?
I'm not a gun owner in the US (i'm a resident, not a citizen, that law what can change anytime isn't for residents)..my girlfriend's also just a greencard holder, her familie members in Brazil are legal gun owners but that's something else and never forget the past. I'm not a rich person, but all my savings (savings= leftover after paying my bills that aren't that high nor big) are in silver, gold and now i'm looking into bitcoin. Perhaps you heard about it (begin to get popular in Buenos Aires). My savings are NOT in the bank (if you don't hold it, it's not yours). My family in Holland and some friends here and in Holland (some still don't want to believe what's going on infront of their eyes) are also doing the same. apocalyptic financial doomsday prophecies...really? It might look like that, I understand what you mean with it, it sounds like “ooh we all going to die”. No, but my point is..it's real, it's all in front of our eyes and cyprus is just another chapter. People here believe what happened in the past in Latin America and not long time ago in Argentina, cannot happen here. This is why they are FROZEN, that mindset and of course they still believe everything what they hear and see on their favorite NEWS CHANNEL. What they have done in the 70's and 80's in Latin America, is now happening here and Argentina is again under attack as you know, no difference of what's happening in the so called “developed world”. by who? I call them scum, anti human roaches, and all trolls better wake up, because they do not either belong to the “club”.
It's a war of Humanity VS the Banksters...
youtu.be/JyIYwKivBzs
@10 I'd like to hear Lagarde's opinion on this too. To me it seems like an option DESIGNED to rally popular opinion behind Cyprus leaving the EU, which benefits everybody.
Again? boths Lagarde (IMF) and Fuhrer Merkel (EU, ECB) “suggestions” are: Trust us, we love you, we care deeply about the “situation” so accept the bailout, pay it back through taxation (a rate what will only go up and up) of all deposits and saving accounts and become slaves for the rest of your life.
I must admit that I didn’t expect such a sensible answer….
It deserves a sincere response….
I’ll try…….
Nice that you are not one of those gun totting Yanks. (I luuuv my 30-30 though :-)
Buying gold and silver at the current inflated prices doesn’t sound sensible to me but… what do I know... I’m a “Not Rich” person as well….., just older.
Bitcoins …heard about them…. Just checked them on Wiki…. Sounds complicated (as any monetary system)…. Have quite some issues with the “Mining” element though.
The economic debacle that happened in Argentina & South America not so long ago, happened in Europe and the USA in the thirties.
People has just such a very bad memory….
How many times has this humble Argentinean had to listen to “Besserwisser” Europeans explaining how “Such Things” could NEVER happen among them……
Conveniently forgetting WWII, The Great Depression, WWI etc… etc… etc…. etc… etc… etc…. etc… etc… etc….
Yanks and Engrish are not better.
It is indeed a struggle going on.
And the “Financial Powerhouses” are not giving up without a fight.
Kind regards from the end of the world (almost)
El Think
was not her home searched today.
It seems that Madame Christine Lagarde got a “Red Card” before our Cristina.
Perhaps she will be forced to resign like her predecessor.
No smoke without fire, as they say.
.
So, hypocrite: you are saving silver and gold. I bet!
Old hat now, you are three years too late on the real gold rush: if I were you I would put ALL of your pittance into bitcoin.
And see how far you get, especially in Americky!
Dutch dummy.
LMFAO
“Buying gold and silver at the current inflated prices doesn’t sound sensible to me but.”
That the price vs gold or silver goes up, must not been seen as if your gold and silver is getting more worth. It's the opposite: meaning your fiat papermoney is losing value. who can buy gold and silver, is hedging themself against the trouble of so called “rising prices”.
Don't kow what wiki page you read but here for you to get it clear about Bitcoin :how to slam the trolls, losers (#27) by debunking their myths that bitcoin is for “dummies”.
en.bitcoin.it/wiki/Myths
A couple of questions....
As I see it, for the Bitcoin system to work, you need a free, independent and working Internet.
You also need big areas of the World blesssed with economic, political, social and juridic stability.
Hardlly consistent with the kind of debacles you are predicting.....
And, hardly consistent with your (quite correct, by the way) previous postulate: “If you don't hold it, it's not yours”
You, my friend, have pure, unaltered Frisian Calvinist Merchant DNA flowing in your veins....;-)))
Never putting all your eggs in the same basket.
Anyhow, in this time of “religious awakening”, let's hope for the best....
Regards
El Think
”From the point of view of the British people, they (the people) want out of the totalitarian EU“
No they don't. You do, but you don't speak for the ”British people”.
Neither is it a good idea to have “all your savings” in US dollars.
Still think that Gold price is “inflated”? I'm sure by time you'll change your mind. Btw, if you can't afford gold, you can always get silver (real plata), the “poor man's gold” is still cheap and will outperform gold..long term. Who is awake and prepared has nothing to fear and nothing to lose. Who isn't, well I hope they will be okay.
“As I see it, for the Bitcoin system to work, you need a free, independent and working Internet.”
Yes. the ways to do that already exist. Even the Chinese cyber police is incapable of stopping the Chinese people in mining and trading in bitcoin. Those losers in “western governments”, who suppose to work for the people but don't, are on the payroll of the banksters and big corporate pimps (I'm a political atheist, my motto is think for yourself) can try everything with pipa, cispa, acta whatever acronym to shut down certain sites in the name of protection from “cyber terrorists” (you know, the ones they create) are failing because of the people who act and react (we the people can do alot). here an example why there always hope to keep the net wide open (mesh networking) project-byzantium.org/about/..nothing new at all. BTW, in many small and big countries they already have or a law pending that people have the right to have access to wide open internet. People are always innovative, anywhere, no matter the situation.
'big areas of the World blesssed with economic, political, social and juridic stability.”
There are small and big nations around the world blessed with economic, political, social and juridical stability, because of the people.
I never, ever, thought I would say this, but you are correct to be wary of the Bitcoin bubble.
Basically, the users are deluding themselves over the fact that the big vested interests will not be able to stop their little scheme dead. They will, they are just not bothered at the moment.
The scheme is perfect for Dildo: very little money and the same goes for the quantity of brains. But when the end comes even the little amount of money he has will vanish.
We both seem to have some degree of belief in “The People” .....
And we both seem to have a clear idea about who the “Opponents” are....
Nice to see young people taking up the challanges.
Keep it up.
“....and the same goes for the quantity of brains.”
Good lord, your english really sucks, for a native British joker (with bad teeth).
Keep drinking the kool-aid with fluoride, it keeps you “intelligent”..moron.
@33 you too keep it up and also vs those “turnips”.
You have just proven my point.
You just CANNOT accept anybody else, especially a Brit AND ESPECIALLY ME, having enough experience to see you for what you are.
LMFAO
Live prices of gold silver ect.
www.bullionbypost.co.uk/
Thought this might help you guys.
Apparently Platinum is worth more than gold,
Which is inflated..
mmmmm
.
The only experience you have is jerking and trolling.
You have just proven my point.”
The only point you just proven yourself (over and over) is that you're an idiot.
www.bloomberg.com/news/2013-03-22/bitcoin-virtual-currency-enters-real-world.html
“Apparently Platinum is worth more than gold,”
Are signs that Paper fiat money are getting worthless.
“The U.S. government has officially legitimized the popular crypto-currency and other ”virtual currencies“ by attempting to regulate them.” Palpable nonsense if Bitcoins are beyond central manipulation, one of the core tenets of the whole shebang.
The US and many other countries have tried to ‘regulate’ markets in all sorts of things with the same result they will have with this (unless Bitcoin CAN be manipulated at some real ‘centre’).
So explain why the value on 21/03/13 was USD 74 (why are they using USD if it is going to be a new valuation system?) and the intrinsic value is seen as USD 45? PS I don’t see enough traction in Cypress.
Try not to use your vitriol this time.
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