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The Cypriot cabinet has declared Tuesday a bank holiday, for fear of capital flight, and this may even be stretched to Wednesdayas depositors are certain to withdraw huge sums from the Cypriot banks after the haircut imposed. Nicosia postponed from Sunday to Monday the tabling in Parliament of the bill including the measures for the Cypriot bailout – including a bank account haircut and a tax hike on interest and corporate earnings – but the European Central Bank insists on a rapid voting because there are already signs a domino effect will follow across European lenders and markets from Monday.There...

There's two bulls standing on top of a mountain. The younger one says to the older one: "Hey pop, let's say we run down there and f*** one of them cows". The older one says: "No son. Lets walk down and f*** 'em all".                           - Robert Duvall in ColorsThe world was shocked this weekend to learn that the European Union would fund the bailout of Cyprus by confiscating the assets of ordinary bank account holders.  Core Europeans and Americans no doubt comforted themselves that such a...

Cyprus's parliament on Sunday postponed an emergency session to discuss a levy on bank savings imposed to partially fund an international bailout needed to stave off bankruptcy. All meetings were postponed until Monday, the Cyprus News Agency reported. Earlier, Cypriot President Nicos Anastasiades postponed an informal meeting of lawmakers called for Sunday morning. Several parties in the 56-member chamber, where no party has an absolute majority, were meeting on Sunday morning to formulate positions over the bank levy. Three parties have already said they will not back the plan.

In the wee hours of the night, the Eurogroup of eurozone finance ministers agreed to bail out Cyprus, after a year of negotiations. Cyprus needed a 17 billion euro bailout loan for its banking system, but the Eurogroup was only willing to come up with about 10 billion euros, so the difference had to be made up by penalizing depositors: 9.9% on deposits above 100,000 euros, and 6.75% on smaller deposits.

You can be forgiven for thinking that you don't need to give a hoot about what's going on in Cyprus this weekend. After all, it's just a little island somewhere in the Mediterranean. But what's going on in Cyprus could actually matter--not just to the rest of Europe, but to the rest of the world. Here's the short version of what's happening: Cyprus's banks, like many banks in Europe, are bankrupt. Cyprus went to the Eurozone to get a bailout, the same way Ireland, Greece, and other European countries have. The Eurozone powers-that-be gave Cyprus a bailout--but with a startling...

British society is scared of offending “vocal and aggressive” Muslims, claims a former adviser to Barack Obama. Professor Lawrence Krauss made his comments after threatening to walk out of a debate hosted by an Islamic group at the University College London where organizers would not allow men and women to sit together. The Islamic Education and Research Academy (iERA) told women to sit at the back, while men and couples were sent to the front. Three people who objected were ordered to leave. … “People are not only afraid to offend, but afraid to offend a vocal and aggressive group...

Shocking! It is difficult to describe the weekend bailout package to Cyprus in any other way. The confiscation of 6.75 percent of small depositors' money and 9.9 percent of big depositors' funds is without precedence that I can think of in a supposedly civilised and democratic society. But maybe the European Union (EU) is no longer a civilised democracy? The consequences are unpredictable, but we are clearly looking at a significant paradigm shift. This is a breach of fundamental property rights, dictated to a small country by foreign powers and it must make every bank depositor in Europe shiver. if...

"Fitch predicts Cyprus will request aid from EU mechanism" headlines Politis. On Wednesday 10 August, the rating agency downgraded Cypriot debt by two notches, making the island a likely bailout candidate. Fitch Ratings’ initiative, coming a week after the appointment of a new minister of finance and a cabinet reshuffle, "is not reassuring" for Cyprus, which is currently in the throes of a serious institutional crisis, writes the Cypriot daily. On 10 August, the new government announced an austerity plan, but "failed to secure support from the opposition" explains rival daily Phileftheros, which amounted to "a double blow for the...

Dimitris Christofias had a serious look on his face as he spoke of a "gut-wrenching" decision, but a "necessary evil." The Cypriot president was not giving his people good news. Christofias, in his televised address last Tuesday, reminded viewers of his country's darkest hour, the Turkish invasion of northern Cyprus in 1974. In return for billions of euros, the "troika," made up of the European Commission, the European Central Bank (ECB) and the International Monetary Fund (IMF), will essentially take control of the Mediterranean island.The Cypriot government and representatives of the troika negotiated for almost five months over the terms...

FITCH GOES ON RAMPAGE: CUTS SPAIN, ITALY, BELGIUM, CYPRUS, AND SLOVENIA Simone Foxman January 27,2012 Fitch just cut the long-term issuer ratings of 5 EU countries: Belgium: AA+ to AA Spain: AA- to A Italy: A+ to A- Cyprus: BBB to BBB- Slovenia: AA- to A It affirmed Ireland's BBB+ rating with a negative outlook. Borrowing costs have been sinking for these countries lately–particularly for Italy and Spain—after the European Central Bank announced liquidity support measures in early December that have lessened mounting worries about the health of the banking system. While Fitch says that it supports EU leaders actions...

Cyprus' Ministry of Finance has called for consensus among political parties with a view to conclude to a fiscal consolidation package, as Moody's rating agency downgraded today Cyprus's government bonds to Baa1 from A2. In downgrading the Cypriot economy, Moody's sighted the ongoing concerns about Cyprus' fiscal position, which are amplified by the fiscal and economic consequences of the destruction of the Vasilikos power plant on 11 July 2011, caused by a massive explosion at the nearby ''Evaggelos Florakis'' naval base, the increasingly fractious domestic political climate, which has increased implementation risks to the government's new fiscal plans and the...

This island, once a magnet for money, is perilously close to running out of cash. Standard & Poor's, the ratings agency, has downgraded Cyprus twice since the beginning of August, citing "deteriorating domestic credit conditions and eroding consumer and investor confidence". With an election due in February and fears of a lurch to the left, a local café owner admitted to me that property buyers from overseas, many of them British, who in the past had been "robbed", would be foolish to rush back. Evidence of plunging fortunes is everywhere, with billboards offering two-bedroom apartments, originally priced at €150,00 (£122,000),...

International lenders assessing Cyprus's bailout needs found the economy in a "worse state than expected" and in need of painful adjustment in coming months, according to reports. Cyprus in ruins? Officials from the International Monetary Fund, the European Commission and the European Central Bank - known as the "troika" - have visited the island twice since Cyprus asked for financial aid on June 25, the fifth eurozone member state to do so. They told Cypriot lawmakers on July 27 that challenges to the island's economy did not only stem from its banking sector, which is heavily exposed to Greece, but...

OPPOSITION parties yesterday accused President Demetris Christofias of irresponsible populism a day after his televised news conference, in which he played down the possible ramifications of Cyprus missing its 2012 deficit target. “We will fight to reach 2.5 per cent but if we don’t, it would not be the end of the world,” he said, as he pledged that as long as he was president there would be no new measures affecting workers, nor would civil servants’ retirement bonuses and pensions be touched. President Christofias has described his relations with former CB governor as 'traumatic' Main opposition DISY said Christofias...

A week after the resignation of the government at a time when the country is under fire from ratings agencies concerned about the scale of its public debt, President Dimitris Christofias has presented his new team. "Ministers already nominated immediately set to work," headlines the daily Politis, which notes that some ministerial posts had yet to be attributed on the morning of 5 August. Supported by the communist party (AKEL), which has also provided the new Finance Minister, Kyriacos Kazamias, (a former member of the European Court of Auditors) and mainly composed of technical experts, the new government will take...

Fitch on Wednesday downgraded Cyprus one notch to BBB, stating that the country will likely need an EU bailout. The ratings agency expects Cyprus to struggle to meet its financing requirements into 2012. Fitch Ratings said on Wednesday Cyprus will probably be unable to meet its financing requirements during the rest of this year and early 2012 and will likely need an EU bailout. Fitch made the forecast in an announcement that it had downgraded Republic of Cyprus long-term foreign and local currency issuer default ratings to BBB from A-, with the outlook negative on long-term IDRs. It said financing...

Cash-strapped Cyprus yesterday (5 October) secured a massive financial loan from Russia, a country with serious financial interests on the island. Cyprus, whose president Demetris Christofias is the only Communist to lead an EU member and eurozone country, will hold the bloc's presidency in the second half of 2012. Cyprus' Council of Ministers approved an agreement with the Russian Federation for a €2.5 billion loan with a yield of 4.5%, government spokesman Stephanos Stephanou announced, according to the Famagusta Gazette. Since the deadly blast at Cyprus' main power station on 11 July, which wiped out 53% of electricity production, the...

It's been in the air for weeks — Nicosia is preparing to apply for €3bn to €4bn in emergency funding from the EU in order to recapitalise its struggling banks, highly exposed to Greek debt. But time is running out, writes the English-language Cyprus Mail. Now that we are no longer in denial about the possibility of applying for an EU bailout, we should perhaps give some thought to the timing which could prove of critical importance. As we have accepted that we will take the plunge, the sooner the better, even if this goes against the government’s philosophy of...

Cyprus looked poised to be the next eurozone economy to be bailed out, as its finance minister warned just days remain to meet a key deadline to shore up its banks. Cyprus Finance Minister Vassos Shiarly hinted a bail-out looms The island and its financial sector are heavily exposed to the problems in Greece, the recipient of two bail-outs totalling €247bn (£200bn). Locked out of the debt markets, Cyprus is under pressure to apply for aid to help its second-largest lender. The Cyprus Popular Bank needs €1.8bn (£1.5bn) before a regulatory deadline this month. “The issue is urgent. We know...

Cyprus is about to prove what anyone with common sense already knew, that Greece will not be the only country requiring haircuts on sovereign bonds. Today the Financial Times posted news of a Radical rescue proposal for Cyprus A radical new option for the financial rescue of Cyprus would force losses on uninsured depositors in Cypriot banks, as well as investors in the country’s sovereign bonds, according to a confidential memorandum prepared ahead of Monday’s meeting of eurozone finance ministers. The proposal for a “bail-in” of investors and depositors, and drastic shrinking of the Cypriot banking sector, is one of...