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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Greece will have to wait for next round of cash - German minister

 

Finance Minister Wolfgang Schaeuble. (AFP Photo / Johannes Eisele)

Source: Russia Today

http://rt.com/news/greece-bailout-german-minister-294/

Germany, the pillar of European economic stability, is skeptical that Athens will receive the next tranche of aid “in the coming weeks,” despite painful new austerity measures adopted this week in Greek Parliament.

­German Finance Minister Wolfgang Schaeuble, one of the main architects of the Greek response team, warned Thursday that it is unlikely that Greece will reach a quick deal with its international creditors on the next credit line.

“At the moment I do not see the decisions being made” that are required for a definitive agreement between the Troika of international auditors examining Greece's finances and the Greek government, he told a conference in Hamburg.

Despite the poor assessment, the minister welcomed Athens' new measures, which were approved on Wednesday, by saying that Greece has “a pro-European majority and it held last night despite demonstrations and a general strike. All is not lost – all is not won either, but we have no use for cynicism… the Greeks want to remain in the euro.”

This is a conclusion with which many Greeks seem to disagree, as massive demonstrations ahead of Wednesday's vote erupted in the capital. At least 100 people were detained as police used tear gas and water cannons to disperse a crowd that voiced anger against a rise in the retirement age to 67, cuts to minimum wage and benefit reductions.

While the rallies pushed forth with their demands, Greek Parliament agreed by a narrow margin to €18.5 billion in budget cuts demanded by creditors.

Now Greece awaits the €31.5-billion tranche of aid from the Troika – the European Central Bank, European Union and the International Monetary Fund, its fourth emergency loan package in three years.

Economics analyst Antonis Vradis says the massive new loan will simply create more debt for the country.

“These packages are moving in the entirely wrong direction. There is a definition of insanity, and according to it, insanity is doing the same thing over and over again and expecting different results. This is what is happening right now. You have a package after which the country's national debt is going to go up from 175% to 190%. The only way to stop this policy of austerity is if people actually stop them,” Vradis, a member of the Occupy London movement, told RT.

 

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Greece has finished talks with its creditors

 

Greek Prime Minister Antonis Samaras (AFP Photo/Eric Feferberg)

Source: Russia Today

http://rt.com/business/news/greece-troika-creditors-crisis-583/

Greece has finished marathon talks with the ‘Troika’ of creditors over its €31.5bln aid package, according to the Greek Prime Minister Antonis Samaras.

“Today we finished talks on the austerity measures and the budget. We did everything possible,” the Prime Minister said on Tuesday. "Should the agreement be approved [by the Parliament], and the budget adopted, Greece will remain within the Eurozone and will go out of the crisis.”

Samaras added that Athens had achieved “significant improvement” in the deal on offer, and warned of “chaos” if the measures were rejected by MPs.

At the moment Greece is seeking to receive another €31.5bln tranche out of the second bailout package amounting €130bln. In return the country should save €13.5bln in two years, with the exact ways of reaching the target remaining vague. The so-called Troika of creditors that includes the European Union, the International Monetary Fund and the European Central Bank may ask Greece to implement around 150 reforms within 2 years, Germany’s Spiegel said last week. This will include certain changes to minimum wage rules, as well as abolishing professional privileges.

The announcement from Samaras has caused immediate reaction from bloggers on the internet.Comments largely grin at the PM’s calling negotiations ‘successful,’ while in fact “the scale of the austerity that will be heaped on Greeks has increased by billions of euros since the measures were originally mapped out after Greece's second bailout back in March,” the Guardian blogger said.

Greece austerity package went from €11.5bln to €13.5B, €5.5bln of cuts in 2013 that turned into €9.5bln.

Labor reforms that had long remained an outstanding issue were agreed earlier on Sunday, with no detail revealed.

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EU IMF give Greece until October 18 to implement reforms

 

President of the Eurogroup Council Jean-Claude Juncker (L) speaks with IMF cheif Christine Lagarde before a Eurogroup Council meeting in Luxembourg on October 8, 2012

Source: Press TV

http://www.presstv.ir/detail/2012/10/09/265651/greece-gets-deadline-for-reforms/

Greece's international creditors have given Athens until October 18, the start of next week's two-day European Union summit, to deliver on scores of broken promises in order to qualify for its next rescue loan payment.

"We stressed that before the next disbursement Greece clearly and credibly should demonstrate its commitment to fully implement the program -- and 89 prior actions from March should be implemented by the 18th of October at the latest," Eurogroup Chairman Jean-Claude Juncker said on Monday at the close of talks with eurozone finance ministers in Luxemburg, AFP reported.

Debt-stricken Greece has depended on bailouts from fellow countries in the 17-nation single currency bloc and the International Monetary Fund since May 2010. To get the loans, it implemented a series of deep income cuts and tax hikes, while increasing retirement ages and facilitating private sector layoffs.

IMF chief Christine Lagarde, who also attended the eurozone finance ministers meeting, said, "On Greece more work needs to be done… Acting means acting, not just speaking."

On Friday, Greek Prime Minister Antonis Samaras said that his country could not take more bitter medicine and if the next disbursement of 31.5 billion euros from a 130-billion second package of loans for the country did not arrive soon, the government will run out of cash next month.

The warning by Greece's bailout creditors came a day before German Chancellor Angela Merkel visits Greece to hold talks with Prime Minister Samaras and President Carolos Papoulias.

Merkel is likely to face angry protests in a country where many blame Germany for the Greek government's draconian austerity measures.

Public Order Minister Nikos Dendias appealed to protesters on Monday to "protect the peace, and above all our country's prospects and our international image."

Some 7,000 police officers will be deployed across Athens on Tuesday to maintain security during Merkel’s stay.

Greece has been at the epicenter of the eurozone debt crisis and is experiencing its fifth year of recession, while harsh austerity measures have left about half a million people without jobs.

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4 US warships to head to Spain as Madrid joins NATO missile shield

Source: Press TV

http://www.presstv.ir/detail/2012/10/06/265216/four-us-warships-to-head-to-spain/

Four US warships equipped with missile interceptors and Aegis defence systems along with 1,400 American military personnel are set to be deployed at a US naval base in Rota, southern Spain by 2013.

The Spanish government made the announcement on Friday after sealing a deal with the US to participate in NATO’s anti-missile shield.

According to a statement by the government, Spain authorized the signing of the deal at a cabinet meeting on Friday.

"Its principal activity will be to contribute to defending against ballistic missiles," the statement said.

Following the decision, Spain's Deputy Prime Minister Soraya Saenz de Santamaria told a news conference that the deal would help boost the economy in the region.

This comes as the left-wing political coalition in Spain has leveled criticism at the move, saying it makes the country “a military target.”

Leaders of the 28-member NATO alliance expressed their support in 2010 for the Europe-wide ballistic missile shield.

The system will later expand to include land-based interceptors in Romania, Poland, Turkey and The Netherlands.

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Spain ready to accept eurozone bailout: EU officials

 

Source: Press TV

http://www.presstv.ir/detail/2012/10/02/264568/spain-ready-to-accept-financial-aid-eu/

Spanish officials are ready to request for a euro zone bailout to help the country pay its debts, European officials say.

"The Spanish were a bit hesitant but now they are ready to request aid,” said a senior European official on condition of anonymity on Tuesday.

On Monday, the European Union Economics Chief Olli Rehn called on Spanish officials to immediately accept the EU bailout to repair the country’s deficit-laden finances.

“The choices will only get harder if they are postponed,” he added.

With an unemployment rate of nearly 25 percent, Spain is under pressure to get its public finances on track amid concerns in the markets over the state of the country’s banks and the wider economy.

The Spanish government has also been sharply criticized over the austerity measures that are hitting the middle and working classes the hardest.

The 2013 budget will freeze public sector salaries for the third year in a row and cut ministerial spending by an average of 8.9 percent. The country’s regions, which pay for health and education, must also scrape up seven billion euros in savings.

The government has confirmed that it will create a new fiscal watchdog to monitor the budgets not only of the central government but also the regional and municipal ones to make sure they comply with Madrid’s efforts to control spending and cut the country’s deficit.

On Friday, hundreds of Spanish nurses, policemen and other public workers took to streets near the Budget Ministry in Madrid to protest against having their pay frozen for the third year.

Battered by the global financial downturn, the Spanish economy collapsed into recession in the second half of 2008, destroying millions of jobs.

Spain, Greece, Italy, Cyprus and Portugal are all in recession and all five are receiving financial assistance from European bailout funds.

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'Democracy kidnapped!' Spanish protesters surround Congress in Madrid



Source Video: Russia Today

http://www.youtube.com/watch?v=0OXXe9B9THo

Spain's "indignant" protesters take part in a demonstration to decry an economic crisis they say has "kidnapped" democracy, on September 25, 2012 in Madrid. (AFP Photo / Dominique Faget)

Source: Russia Today

http://rt.com/news/spain-protests-parliament-crisis-942/

Thousands of activists have begun to congregate in Madrid’s Plaza de Neptune, 100 meters from the Congress building, to protest Spanish austerity measures. The demonstrators pledged to march around the building, and called for new elections.

Watch the protests LIVE

Demonstrators waved banners with the slogan ‘No’ written on them, in reference to the austerity policies of the Spanish government, but so far the protest has been peaceful.

Protesters said that today is a key day to level criticism against politicians and the Spanish government. The city stationed armored police vehicles bumper-to-bumper around the parliament building, and announced that around 1,300 police would be deployed to counter the protesters.

The organizers of the protest dubbed their movement ‘Surround Congress,’ and expressed hopes that thousands would turn out. The protestors called themselves ‘indignants’ and claimed that their democracy had been ‘kidnapped,’ calling for new elections and rallies against the austerity measures enacted by Mariano Rajoy’s government.

Some 200 demonstrators gathered near the city’s main railway station chanting “Rescue democracy,” and “This is not a crisis, it’s a swindle.”

Carmen Rivero – a 40-year old photographer who travelled overnight by bus from the southern city of Granada – said, “We think this is an illegal government. We want the parliament to be dissolved, a referendum and a constituent assembly so that the people can have a say in everything.”

Another 100 protesters were scattered across the city’s main square, the Plaza de Espana.

“This is not a real democracy. This is a democracy kidnapped by the parties in collaboration with the economic powers and the people have no say in it,” said Romula Barnares, a 40-year-old artist wearing sunglasses with a dollar sign on one lens and a euro sign on another.

But Miguel-anxo Murado, a journalist and writer, told RT that he thought their demands are too vague and that they would not be successful, “it seems that they are back with the same very vague and ambitious platform and in-fact they have been over shadowed by a different constitutional challenge, which is for the independence movement in Catalonia, which is more likely to change the constitution, although in a different way, so I’m afraid they will probably not have a huge success today.”

Spain is in the middle of its second recession in two years, and faces a 25 percent unemployment rate.

Madrid introduced the controversial austerity measures in a gesture meant to show that it intends to fix its debt and budgetary shortfalls. The European Central Bank granted Spain a 100 billion euro rescue loan for its banks, but the country has not decided whether to seek another bailout.

Europe’s financial leaders are pleading for Spain to reduce volatility in its markets by deciding whether or not to request the second loan.

During a September 15 protest, waves of some 50,000 anti-austerity demonstrators converged in downtown Madrid, blowing whistles and hoisting banners that read, “They are destroying the country, we must stop them.” Representatives from over 230 civic and professional organizations also turned out amid cries of “lies,” and “enough.”

 

People gather at the Plaza Espana square before taking part in a demonstration organized by "indignant" protesters to decry an economic crisis they say has "kidnapped" democracy, on September 25, 2012 in Madrid. (AFP Photo / Dominique Faget

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