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Cyprus bailout . Bank accounts frozen for the weekend !


Frederick
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The people of Cyprus are now paying the price for the preservation of the sacred euro. The people of Greece, Spain, etc, have been paying already in the form of mass unemployment; it's just a different kind of pain. Lose 10% of your savings, or lose your job; I'm not sure which is worse. But until the euro is abandoned, this chaotic nonsense will continue.

I think it's a tragedy that the EU, which is a worthy concept, is in danger of being wrecked by the obsession with a single currency. But – "We will do whatever is necessary to save the euro," says Mr Draghi. So we've been warned.
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What I find quite incredible is that some overpaid (presumably intelligent) faceless fuck in the Bundestat took this decision clearly based on his own agenda (dealing a blow to russian money launderers) without seemingly, any thought to the implications to all the other ordinary savers.

I'm just an normal bloke with no great knowledge of money-markets and, like thousands of others, it was pretty obvious to me that the sh1t was going to hit the fan.

Maybe the time has come for everyone to take their savings out of banks and bring these corrupt arseholes to their knees.

With interest rates as they are there is virtually nothing to lose by doing this.
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[quote user="allanb"]The people of Cyprus are now paying the price for the preservation of the sacred euro. The people of Greece, Spain, etc, have been paying already in the form of mass unemployment; it's just a different kind of pain. Lose 10% of your savings, or lose your job; I'm not sure which is worse. But until the euro is abandoned, this chaotic nonsense will continue.

I think it's a tragedy that the EU, which is a worthy concept, is in danger of being wrecked by the obsession with a single currency. But – "We will do whatever is necessary to save the euro," says Mr Draghi. So we've been warned.[/quote]

The choice you describe may be viable if you are of working age but its pretty tough for pensioners with their life savings in a Cyprus bank.
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If Cyprus had not been in the Euro and had similar problems (not that unlikely) then they would have had to devalue their currency. This would have a similar effect on people's bank balances in terms of purchasing power except that those with smaller amounts would have suffered the same as those with balances greater than the equivalent of €100 000.

People seem to think that devaluation does not diminish your bank balance. It does by increasing the price of all imported goods and in today's global market that does affect nearly everyone.

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 I never believe these things just pop up overnight .  There must have been some plan to do this raid on accounts laid down for some time .  IMO Cyprus is a testing ground .   It certainly sends a bad message round the world as to what the Euro Zone can impose on people .

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[quote user="Bugsy"]What I find quite incredible is that some overpaid (presumably intelligent) faceless fuck in the Bundestat took this decision clearly based on his own agenda (dealing a blow to russian money launderers) without seemingly, any thought to the implications to all the other ordinary savers.

I'm just an normal bloke with no great knowledge of money-markets and, like thousands of others, it was pretty obvious to me that the sh1t was going to hit the fan.

Maybe the time has come for everyone to take their savings out of banks and bring these corrupt arseholes to their knees.

With interest rates as they are there is virtually nothing to lose by doing this.[/quote]

From what I understand, interest rates in Cyprus are around 4.5%, (my mortgage is less than that) which is why so many people from overseas have been investing there, and then taking that money out of the country. So basically, people will be losing a year's interest, but perhaps they should only apply the tax to none residents?

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The way I read it on the BBC website was that Cyprus was given three options, do nothing and get no bailout money, tax the bonds sold by the banks to raise money or tax the personal accounts. Germany just assumed they would tax the bonds. Perhaps there is a game plan for Cyprus to get all the money by saying they will tax the personal account holders in that they will kick up such a stink that Germany will relent and pay them the lot. The problem is that normally those that hold the bonds usually ensure the bank behaves responsibly so they can get their money back and the interest. Many believe that the bonds rather than being held by institutions are held by the Russian Mafia who know nothing about banking. One thing that is being overlooked and which Richard touches on is where did all this bank money go and why have the banks ended up having to borrow money? The other question for me is why does Germany have to cough up yet again when I thought that this was the type of thing that led to all those trillions being put aside last year (or was it the year before) for just such problems?
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This is interesting from Febuary . The Lying Dutchman.

AP) -- For a second day in a row, the European Union's top financial official sought Tuesday to quash speculation that private bank depositors in Cyprus might be forced to take losses as part of a bailout deal — a suggestion that's fueled fears of large-scale withdrawals from the country's troubled banks

http://finance.yahoo.com/news/official-eu-not-working-private-150614212.html
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I just read on the BBC website that Russia has €31bn on deposit in banks in Cyprus, €13bn of which is from private Russians through banks, the rest is corporate deposits and some of those may be fronts for the Russian Mafia.

I was trying to find out who paid what towards the Greek bailout but couldn't find anything. What I did find was that Cyprus deregulated it's banks in Sept 2011 and were charging the third highest interest rate after Greece of 7% at the end of 2012. As somebody said this seems to have been on the cards for a few years.

 

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[quote user="honeybee"]Very interesting, Krusty.

Are you in Cyprus? If so, what is the mood there? And is there money in the ATMs?

Seems like fifty shades of Argentina[/quote]

Yes I am still in CY , there is still cash in the ATMs and they appear to be refilling them . As can be expected most people are hopping mad and threatening to empty thier accounts when the banks reopen.
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It seems complete madness!

Cyprus should gone down the Icelandic route and protected domestic depositors while giving a 100% haircut to the foreign non-EU ones.

I guess the politicians are worried about a 'visit' from the Russian mafia
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As I was pottering around this afternoon I wondered what would happen if the EU gave them all the money they wanted then three months later it came out that there were several billion Euros worth of Russian Mafia money in the accounts which had been secured by the bailout? What reaction would people have said then? Bet old UKip would have a field day on that one. Incidentally I have no idea if Russian (or any other) Mafia money is residing in Cyprus (or any other country come to that).
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Nobody seem to be asking the question ... "Is this going to be the norm when bailouts are needed ? "  From now on the cash has to come out of  deposits ... If they put Cyprus through this how can they not  handle other bailouts in the same way ? 

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[quote user="Frederick"]Nobody seem to be asking the question ... "Is this going to be the norm when bailouts are needed ? "  From now on the cash has to come out of  deposits ... If they put Cyprus through this how can they not  handle other bailouts in the same way ? 
[/quote]

Well according to the 'expert' on BBC1 1 o'clock news no because this is a unique set of circumstances and lets not forget the EU gave them a choice (not demanded as said in some newspapers) of routes to go down. From what they said on the news it seems there are other avenues open to them which is why they are taking an extra day.

As to if this sets a precedence then as I said no according to the 'expert' but if it did you would be no safer in the UK than anywhere else. Why, because the banks would ask the government for money in which case your savings are protected but if the government does not have the money and has to go t the IMF for it then the protection rules are videoed by the IMF. The UK can't go to the EU for the money because the fund was set up only for Euro countries. If for instance there is a triple or even quadruple dip the UK can't get money from the Euro fund so it will have to go to the IMF who incidentally are lending some of this money to Cyprus. Some say that this method of dealing with the situation in Cyprus is part driven by Germany and part driven by the IMF. Last time the UK got a bail out from the IMF, for that is were it would have to ask, it made the current Tory cuts look like loose change.

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[quote user="Renaud"]I am surprised that people leave large sums in the banks. Are the Cypriot bank interest rates so good that this is the best way to make their money work for them?[/quote]

Somebody said you get a lot of interest but searching and finding their rates I don't see any advatage over the UK.

http://www.bankofcyprus.com.cy/en-GB/Deposit-Accounts/RIGHT/Compare-the-deposit-products/

 

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