Eurozone finance ministers approve bailout deal for Cyprus

 

French minister of Economy, Finances and Foreign Trade Pierre Moscovici (R) and International Monetary Fund chief Christine Lagarde (L) chat next to EU Commissioner for Economic and Monetary Affairs Olli Rehn (C) prior to an extraordinary Eurozone meeting on March 24, 2013 at the EU Headquarters in Brussels (AFP Photo / John Thys)

Source: Russia Today

http://rt.com/news/cyprus-eu-imf-bailout-764/

The Eurogroup has approved a deal on a 10 billion-euro bailout for Cyprus, struck early Monday in Brussels. Cyprus avoids exiting the eurozone, but will have its second largest bank closed with heavy losses expected for big depositors.

“The size of financial assistance will amount to 10 billion euro,” Eurogroup president Jeroen Dijsselbloem has announced at a press conference in Brussels after the eurozone finance ministers swiftly endorsed the plan.

“With this agreement we’ve put an end to the uncertainty that has affected Cyprus and the euro area over the last few days,”he added.

The new deal agreed between Cyprus and the Troika of international lenders - the EU, the ECB and the IMF - will set up a "good bank" and a "bad bank" and will mean that the country’s second largest bank Laiki will effectively be shut down.

Deposits below 100,000 euros will be shifted from Laiki to the Bank of Cyprus to create a “good bank.” Deposits larger than 100,000 euros will be frozen and used to resolve debts. It remains unclear how large the write-down on those funds will be.

The decision comes hours before the Monday deadline set by the European Central Bank, following heated talks between President Nicos Anastasiades and the Troika.

Earlier on Sunday the central bank in Cyprus has imposed an ATM withdrawal limit of 100 euros per day for the island's two biggest banks, in order to prevent a run on lenders.

Warren Pollock - market analyst and financial adviser says the financial turmoil in Cyprus is part of a broader crisis.

“In reality this is a global problem which has not been addressed since 2007-2008 and previous to that with the issuance of huge amounts of debt and leverage into the system both in Europe and in the United States,” he told RT.


“And when that debt goes bad, the only recourse which exists is to tap remaining collateral in the system which is the savings.”


Pollock believes that sooner or later this “sort of stealing” of savings may result in popular unrest. “We can definitely see smaller countries being the test to see whether savings could be stolen on a wider scale.”

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Cyprus imposes ATM withdrawal limit of €100 per day for island's two largest banks

 

People queue to withdraw their savings at a Cypus Popular Bank (Laiki Bank) ATM in Athens on March 22, 2013. (AFP Photo)

Source: Russia Today

http://rt.com/business/cyprus-bailout-withdrawal-banks-756/

The central bank in Cyprus has imposed an ATM withdrawal limit of 100 euros per day for the island's two biggest banks, in order to prevent a run on lenders.

A spokesman for the country's second largest lender, Cyprus Popular Bank, told Reuters that the new measure began at 1pm local time (11am GMT) and would remain in place until the bank reopens, or until confirmation of continued emergency funding from the European Central Bank. Cyprus Popular Bank had previously limited withdrawals to 260 euros per day.

A government official said the restriction also applied to the Bank of Cyprus.

It was initially reported that the measure was implemented on all banks in Cyprus, although it has now been confirmed that only the island's two biggest banks have been affected.

The news comes after Cypriot President Nicos Anastasiades took part in last-minute crisis talks with international lenders on Sunday, in an attempt to save the country from financial meltdown. The negotiations in Nicosia to seal a bailout from the EU and International Monetary Fund failed to reach a solution.

Anastasiades then headed to Brussels to hold talks with EU, European Central Bank and IMF leaders ahead of a crunch meeting of eurozone finance ministers.

Government spokesman Christos Stylianides said in a statement on Sunday that Anastasiades and his team have a "very difficult task to accomplish to save the Cypriot economy and avert a disorderly default if there is no final agreement on a loan accord."

The news comes just one day after Cyprus and the Troika agreed to a 20 per cent tax on deposits over 100,000 euros at the Bank of Cyprus and 4 per cent on deposits held at other banks.

"Unfortunately, the events of recent days have led to a situation where there are no longer any optimal solutions available. Today, there are only hard choices left," European Union Economic and Monetary Affairs Commissioner Olli Rehn said in a Saturday statement.

Cyprus is scrambling to come up with €5.8 billion by Monday, or face being kicked out of the Eurozone. The cash is a prerequisite for a further €10 billion in bailout funds.

Lawmakers' rejection of a previous proposal to tax all bank deposits prompted the European Central Bank to threaten to cut off emergency funding to Cypriot banks unless a deal was reached by March 25. Banks have been shut all week, and are due to reopen on March 26.

On Saturday, at least 1,000 bank workers in Cyprus hit the streets of the country’s capital of Nicosia. The demonstrators marched against the latest bailout measures taken by the country’s central bank.

Protesters carried banners that read, “Hands off provident funds” and “No to the bankruptcy of Cyprus.”

Turkey sends ‘stern warning’ to Cyprus over gas reserves

Meanwhile, Turkey has warned Greek Cyprus against using hydrocarbon reserves off the island to overcome its debt crisis without the consent of Turkish Cypriots. Ankara says such a move could result in an end to efforts to reunite Cyprus’ Turkish and Greek zones.

Turkey has contacted the US and plans to take the issue to the European Union, Today’s Zaman reported.

Ankara “had to issue a stern warning” regarding attempts to offer natural resources in exchange for foreign loans, a Turkish official said on Sunday.

Turkey has repeatedly warned the Greek Cypriot government against unilateral moves to extract natural gas and oil reserves off Cyprus, saying that Turkish Cypriots also have a say on the reserves.

The dispute recently escalated when reports surfaced that hydrocarbon exploration rights were part of Russia-Greek Cyprus talks last week over a possible deal which includes Russian financial help. However, the talks did not produce an agreement.

Russian Prime Minister Dmitry Medvedev expressed doubt on the inclusion of hydrocarbon reserves as a loan deal, saying there are concerns surrounding commercial viability and questions stemming from Turkish objections.

 

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Cypriot parliament votes against deposit levy

Cypriot woman shouts slogans as she holds a placard during a protest against an EU bailout deal outside the parliament in Nicosia (AFP Photo / Patrick Baz)

Source: Russia Today

http://rt.com/business/cyprus-against-deposit-levy-501/

The Cypriot parliament has voted against a revised bank deposit levy. The tax was meant to shave 9.9% off any deposits over €100,000 and has since caused uproar in the country.

Thirty six deputies voted against the proposal to tax bank deposits in the 56-member chamber, while 19 abstained. One deputy was not present for the vote.

"The bill has been rejected," said house speaker Yiannakis Omirou, as thousands of protesters outside the parliament building in Nicosia erupted in cheers.

According to the proposal, a 6.75% rate was to be set for amounts between €20,000 and €100,000. Deposits of up to €20,000 euros were to remain untouched.

Passage of the bill was considered a prerequisite for a €10 billion European Union bailout for the Mediterranean island. EU finance ministers have warned that Cyprus' two biggest banks could go bust if a bailout deal in some form is not forthcoming. The government and opposition parties have scheduled emergency talks on the bailout for Wednesday.

The European Central Bank (ECB) has threatened to end emergency lending assistance for Cypriot banks if a bailout deal was not ensured. However, following the vote, the ECB said it would continue to provide liquidity to Cyprus as needed “within the existing rules,” Bloomberg reports.

Cyprus has discussed the tax with its European creditors. Ministers from the 17 eurozone countries urged protection for savers with €100,000 or less and for them to be spared from the levy, after the prospect brought panic to the markets and had Cyprus dealing with the prospect of Russia withdrawing its rescue loan.

The Cypriot government’s original proposal was to tax all depositors, setting the rate of 6.75% on all deposits under€100,000 and maintaining a 9.9% tax on all deposits above that level.

In the meantime all Cypriot banks have frozen the accounts liable for the tax and stopped all transactions, including electronic and closed for a long weekend until Thursday to prevent panic.

Cyprus needed to raise €5.8 billion euros for its bailout program and was hoping to get the money in the planned bank deposits levy.

Despite the precarious position Cyprus has found itself in, a default might be preferable than a bailout under the present conditions, United Kingdom Independence Party MEP Nigel Farage told RT.

“The EU has been unhappy about so-called tax havens for a very long time. Ironically, whilst continuing to turn a blind-eye to many activities that go on in Luxemburg. I mean Cyprus finds itself right now in a very difficult, desperate position. But I would say that it is better to officially go bankrupt, to default on international bond obligations. And to do that best to keep a banking industry and to keep some confidence in that country,”he said

 

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Cyprus Americana: Humanity VS the Banksters

Source: SGT Report

http://www.youtube.com/watch?v=JyIYwKivBzs

Published on 17 Mar 2013

 

The Banksters in the EU have announced that they intend to STEAL cash from the savings accounts of the people in Cyprus, and give that cash to the criminal BANKS! This is an overt act of evil. It cannot stand. It is the epitome of everything we've been warning about for years. This is the proof that the real world war is the one of the Banksters VS Humanity. And the question now is, who's next?

Downton Abbey publicity pictures used with consent for promotional purposes. Music used with creative commons license.

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