Posted on 03/24/2013 7:11:45 PM PDT by blam
LIVE: Deal Reached On Cyprus Bailout
Matthew Boesler
March 24, 2013
The Eurogroup of euro zone finance ministers met in Brussels tonight to approve a plan to bail out the Cypriot banking system.
The new deal will see uninsured deposits at the country's two largest banks take a substantial haircut, but insured depositors – those with less than 100,000 euros in their bank accounts – will be spared from the one-off "tax" that was being considered just a week ago.
Reports of a deal between Cypriot and EU officials being reached prior to the Eurogroup meeting caused the euro and the Australian stock market to spike.
Now, the Eurogroup has signed off on the deal as well.
CNBC's Kelly Evans tweets that Cypriot President Nicos Anastasiades is pleased with the outcome:
Below are more details from Reuters on the plan:
It will mean that Popular Bank of Cyprus, the island's second largest bank which is also known as Laiki, will effectively be shut down.
Deposits below 100,000 euros in Laiki will be transferred to Bank of Cyprus, the country's largest bank. Deposits above 100,000 euros, which under EU law are not insured, will be frozen and will be used to resolve debts. It remains unclear how large the writedown on those funds will be.
No charges will be incurred against any Cypriot bank account with less than 100,000 euros in them, the officials said.
Because the process will be treated as a bank restructuring as opposed to a nationwide "tax" on bank deposits, it seems that the plan will not be subjected to another vote in the Cypriot parliament, which on Friday passed new laws enabling them to navigate the restructuring process more easily.
The Eurogroup press conference is now underway.
Dutch Finance Minister Jeroen Dijsselbloem,
(snip)
(Excerpt) Read more at businessinsider.com ...
40% on the amount over 100,000? ( I.e. 40% of 5,000?)
I’d read on Zero Hedge that anyone whose last name ends with “ov” can get as much as a 40% haircut.
Thanks!
So, when does Russia declare war? or just make a real good threat.
Tha should be good for the Cypress economy
That I am not sure of. It sounded to me like 40% of 105,000.
Scratch my previous, I think it’s 40% of the 5K.
BINGO!
It’s not stealing. It’s just a haircut.
“So it would be better if the entire country collapsed and people started slaughtering each other in the streets?”
I’ll take this one.
Yes.
Although your “slaughter in the street” comment is hyperbole, the best solution for Cypress would be to go through the real pain of a real insolvency now instead of make-believing everything is OK all the while ignoring the bills, debtor calls, and foreclosure notices for a few more months. This deal only serves to make things worse later.
Besides, an early ticket out of the EU most likely would ultimately be seen as a blessing in future years.
I might suggest you read The Road to Serfdom. This deal hasn’t saved the people of Cypress from anything. The reactions to this deal (like the drying up of private capital in the face of draconian state controls) will only serve to make an eventual recovery all the more difficult.
You cannot borrow your way out of debt - or towards prosperity.
The People of Cypress weren’t saved at all. The EU threw itself a lifeline and tied an anchor around the necks of the People of Cypress in the process. And they couldn’t give a tinker’s damn. If you think this deal was about saving Cypress, you haven’t been paying attention.
WHAT A SCAM!!!!!!!
Corruption...it’s everywhere.
exactly
They can simply confiscate your property without recourse. No due process of law. This will come to be seen as a watershed event.
Obama...
“Set course for the Euro system...Maximum warp...”
“Engage”
...should be lost 100%. That's what 'uninsured' means. No friggin' bailouts!
Whole lot of EU officials need to buy a Geiger counter.
I got it. Or watch for their glow in the dark appearance LOL
This isn’t going to end well.
Why would the entire country collapse?
Your math is way off. 105,000 * 0.4 = 42,000 (recall that 50% is half and 40 percent is slightly less than half).
Sorry, just noticed that it is being postulated that only the amount over 100K would take the haircut, so your math would be correct.
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