French authorities search Christine Lagarde's flatAway from Cyprus and indeed the UK Budget, it seems French authorities have searched the Paris flat of IMF boss Christine Lagarde.
The move is part of an investigation into her handling of a 2008 compensation payment of €285m to businessman Bernard Tapie. There are claims that Lagarde, then finance minister, acted illegally in approving the payment. She denies any wrongdoing.
CYPRUS GOVERNMENT SPOKESMAN DENIES REPORTS OF DEAL TO SELL CYPRUS POPULAR BANK TO RUSSIAN INVESTORS...Confusion over reported Cyprus bank sale...there are reports that Cyprus Popular Bank has been sold to Russian investors, something which has gave a lift to markets and the euro. However, in this atmosphere of speculation and rumour, it may not be correct.
Merkel regrets Cyprus vote decision and awaits new proposals...Angela Merkel regrets the outcome of last night's vote in the Cypriot parliament, according to snaps on Reuters.
But the German chancellor accepts the decision and now awaits a proposal from the Cypriot government to the Troika. She will look at all the proposals the government makes.
Hammering home the point made by the ECB earlier, she said Cyprus does not have a sustainable banking sector. Savers in Cyprus with more than €100,000 in the bank should be ready to contribute to any bailout (it was the plan to hit savers with more than €20,000 that scuppered the vote).
4 comments:
A deal WILL be agreed. The EU has blinked first, don't believe otherwise.
But what will be the result?
How many people with deposits in these 2 Cypriot banks will happily leave it in there?
Any large depositors who have not had to pay this tax, especially with thousands of Euros, will remove it as fast as allowed. If they cannot who in their right mind would deposit further funds.
But in the corridors of the EU none of this matters, Cyprus will still be in the Euro and therefore it proves what a strong and successful currency it is.
So, if the EU are to provide Cyprus with a further 10,000,000,000 Euro's of debt (loan) ..liquidity. Is the EU prepared to also state:-
(a) who holds the debt (presumably the taxpayers of mainly northern Europe, Pension funds etc..), and
(b) more specifically, when that loan will be repaid by Cyprus?, and
(c) what risk assesment has been performed as to the likelyhood that the new debt holders will never see their money again?.
If a+b+c is not forthcoming, its not a very bright thing to be doing is it?, provide more debt that simply needs to be written off later.
Is'nt it better to face the situation now & write down the existing (element of unmanageable) debt?. Recognise previous loans were the wrong thing to do as it placed debt holders in bad loans, and let Cyprus re-introduce their own currency again.
More EU debt can't fix this.
18.22 As a reminder, that levy of more than 10pc on deposits greater than €100,000 would be even higher than the 9.9pc proposed in the original Eurogroup plan.
18.16 Reuters reports that Cypriot leaders are discussing with their international lenders the adoption of a levy of more than 10pc on bank deposits over €100,000.
"We're trying to safeguard the provident [pension] funds in Cyprus Popular Bank, which are valued at over €600m," a source told the newswire
18.01 AFP has kindly translated a tweet from Cypriot president, Nicos Anastasiades. He apparently took to his Twitter account to send out a distress signal:
The country must be saved...The House of Representatives will soon be called upon to make difficult decisions. There will be painful aspects, but the country must be saved.
A Government spokesperson told AFP that the authorities were locked in "hard negotiations with the troika" over the bailout.
17.52 Jeremy Warner, assistant editor at The Telegraph, has blogged on the Cyprus situation. He argues that if capital controls are introduced in Cyprus, it is the end of the single currency in all but name:
The point is that if capital controls are introduced, it basically makes Cypriot euros into a national currency, rather than part of wider monetary union. The capital controls will severely limit your ability to get your euros out of Cyprus, rending them essentially worthless in the wider eurozone. It would be a bit like telling Scots they can't spend their UK pounds in England. Monetary union is many things, but above all it is about free movement of money and a uniform value wherever it is spent. When these functions are disabled, then you cease to be part of a single currency.
Russians in Cyprus are getting tired of suggestions from Germany that anyone with a Russian accent here is a Mafioso. They say that claims that the island is simply a money-laundering post for Mob cash are wide of the mark, and that the EU strategy has been purely a political one.
"Since this started happening the German, Dutch, and Scandinavian treasuries have been doing very well while the quotes for southern European ones have gone down," says Andrei Surikov, 30, a financial manager from Moscow who moved to Cyprus three years ago.
"The whole thing is just a dirty political game, and I don't think the EU has estimated the impact of what they have done. The trust has gone now in the whole system."
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