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Cyprus bailout . Bank accounts frozen for the weekend !


Frederick
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[quote user="Quillan"]

[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/

 

[/quote]

My hairdresser is here at our house; he has a property in Cyprus, and reckons he'll lose about £2,000. He reckons the interest rate was 4.5% - 5%, but at little exchange shops, which give (gave?) at least 1% over the bank rate.

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Now what is happening ?    An  EU country with huge gas reserves  about to be  sold off to Russia  ?     I thought the object in Brussels was to raid the Russian laundered cash for the bail out   Not send Cyprus hot footing it off to Russia to be saved !

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Watching the C4 News last night as well as the BBC News and rummaging around the various newspapers there is a whole lot more to all this than appears to meet the eye.

Cyprus and Russia have enjoyed a 'special relationship' since 1960 when Cyprus became independent from the UK. Russia signed an agreement with them to sell them a load of missiles at a basement price to 'protect' Cyprus from the Turks. They also have in place, for many years, a special banking deal with Russia.

It seems to me having digested and thought about this that at the core is this massive gas field. Cyprus has approached the EU bank for a loan to start getting the gas out but there is a disagreement with the Turks about who owns the gas. For many years now there has been talks between the EU and Turkey about Turkey joining the EU which for political reasons the EU is very keen on. So we have a dispute about the gas between Cyprus and Turkey with the EU wanting Turkey to join it. So I guess it is no surprise that when Cyprus asks for the money to get the gas out the EU says no.

Along comes Russia which has already lent Cyprus some €2bn plus Euros. Now you can see where this is going, give us our €2bn Euros back knowing Cyprus can't. So the Russians will go after assets, just like a bailiff and of course the prize for them is access to the gas field. But €2bn is nothing compared to the profit to be had from the gas so now Russia is upping it's offer. Today I read in the papers that actually the Russian government is not the one offering to bail out Cyprus but it is the Russian gas and oil company. Outside of the banks Russia has lent in total over €40bn to companies in Cyprus and of course could apply more pressure by asking for that money back as well.

America of course is not very happy with Cyprus because of it's links with it's arch enemy Russia and the fact that at one time Cyprus had rockets pointed at Turkey where America had early warning radar and missiles pointed at Russia, America also of course also hates the Euro with a vengeance. Now look at who was the prime instigator in making it difficult for Cyprus to borrow money. The papers would have us believe it is all down to the EU and in the main Germany in particular but if you read carefully and between the lines the IMF is heavily involved prodding from behind and who really controls the IMF, why America of course as several of the American directors also sit on the American White house financial committee. Poor old Cyprus in one way as it seems a web of deceit has been weaved just to get control of it's gas. But then can we really sympathise with the position Turkey finds its self in, I don't think so, my mums old saying of "you reap what you so" comes to mind.

There was one somewhat amusing thing to come out of this however. According to MSN today the President of Cyprus got the wrong idea about the UK sending €1m by plane for the troops to be paid. He texted the UK government saying "he was pleased we’d taken the place off his hands and that he’d send back the change on the next boat".

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 To add to what Q wrote :    Where is the Russian Med fleet likely to want to lay up when their Targus  Syria  base is lost to them ...As it is likely to be soon .

 If they get Cyprus out of the mire ... are they going to say to Putin   " You cant refuel your frigates here " 

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It's bad enough having tax on prudent savers, what's worse is the lock down on funds, and now the threat that it may all be swallowed up.
If ever there was a case for spreading savings to maintain fluidity surely this must be up there.
Cash (in any bank) is no longer King. What now for all the other savers in 'approved' schemes, stocks, bonds, and property? is all to be confiscated to support this unhappy currency? 

http://www.telegraph.co.uk/finance/debt-crisis-live/9945121/Cyprus-bailout-live.html

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[quote user="just john "]

It's bad enough having tax on prudent savers, what's worse is the lock down on funds, and now the threat that it may all be swallowed up.
If ever there was a case for spreading savings to maintain fluidity surely this must be up there.
Cash (in any bank) is no longer King. What now for all the other savers in 'approved' schemes, stocks, bonds, and property? is all to be confiscated to support this unhappy currency? 

http://www.telegraph.co.uk/finance/debt-crisis-live/9945121/Cyprus-bailout-live.html

[/quote]

Assuming you always believe what you read you might read the article properly to which you have given a link to. Just in case I will quote directly from it for you.

"10.52 Cypriot leaders have ruled out any sort of bank levy"

All this has absolutely nothing to do with the Euro currency. It is not the end of the Euro, it is not even the beginning of the end of the Euro. What it could be is the end of Cyprus who since 1960 have burnt both ends of the candle with a corrupt banking system. By far the biggest group to be effected is the Russians who live there, all 20,000 plus of them which is why there are talks in Russia between the two governments. I suspect Russia will come to their aid at the last minute once Cyprus has signed over it gas rights and given the Russian Fleet a new facility. Actually if you think about it cash is still king. If you don't have it and somebody else does they can rape you for all your worth.

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I have read the article Q, and my concerns are not Cyprus, but the thinking of the ECB, and what would happen to other members of the EU who fail, and the knock on effect of that.


 ''The European Central Bank will switch off the cash life support taps for banks in Cyprus wiping out £1.7 billion in British savings after next Monday unless the island signs off on a radical debt-cutting programme with the eurozone and International Monetary Fund.
Unless a deal is in place the euro's central bank will withdraw "emergency liquidity assistance" leading to the immediate collapse of the two largest Cypriot banks and a financial crash in Cyprus.
Cypriot banks are totally reliant on the ECB for funding and have taken over €9.1 billion in an emergency programme to ensure cash does not run out.

Jeroen Dijsselbloem's testimony before MEPs.

On agreeing a bailout package:

  So, I'm not sure that this package is completely gone and failed, because I don't honestly see many alternatives. There is of course a different way to do the levy, and we're very open to a more fair approach to the way the levy is structured.

On the bank levy:

The levy I can strongly defend, because it is a direct way to ask a contribution of the deposits of the banking sector in Cyprus, which is inevitable if you want to a build a package which doesn't bring more loans and more debt to Cyprus than the €10bn I mentioned before.

I still think it's probably inevitable there will be some kind of levy in the final package that we will agree upon.

The Eurogroup thinks it's very important that we should have a fair burden share, and that means a larger contribution from large depositors than, of course, from small depositors.

 

 

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The ECB can't give them the money unless all the members agree and Germany didn't (along with a couple of other countries and the IMF). Germany (and others) didn't agree because it is a widely held belief that much of the money placed in the banks came from illegal sources inside Russia because there are little an no money laundering laws in Cyprus. How do explain away the fact that you have just given money to save banks that survive on gangsters money without them contributing to bailing out the banks concerned to your voters? Can you imagine the fury of the Telegraph readers if they found out after the event.

Cyprus is a one off and it wouldn't happen in another Eurozone country. As I said earlier imagine if all the bank in the UK failed and the government didn't have the money to bail them out. Not being in the Euro they can't go to the ECB so they would have to go to the IMF. Imagine how much 'blood' they would want. But if your really worried then take your money out of your bank accounts and stick it under the mattress.

 

 

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Quillan wrote:

"But if your really worried then take your money out of your bank accounts and stick it under the mattress."

Businesses need current accounts as money comes and goes and deposit accounts if they are in surplus for a while, but private individuals have alternates to deposit accounts and their mattresses.

At the very least they could look at buying equities in FTSE 100 companies with a good track record in growth and dividends.
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I can't help thinking that the 'Iceland' solution was the way forward on this and something that should have been followed throughout Europe.

Let the banks fail, imprison the perpetrators and look after your citizens.

http://www.aljazeera.com/indepth/opinion/2013/03/2013318113350919558.html
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