Hundreds of protesters massed outside the floodlit presidential palace in Nicosia late yesterday, shouting for the bailout “troika” of the EU, European Central Bank and IMF to leave Cyprus, a country of 862,000 people.
The streets in Nicosia were quieter today because of a national holiday to celebrate Greek independence, with school children parading to the Greek embassy. Lines remained at Popular Bank’s cash machines after the daily limit was lowered to 100 euros yesterday from 260 euros.
Anastasiades was running out of options after failing to get help from the Russians, whose holdings in Cypriot banks Moody’s Investors Service estimated at $31 billion.
The deal imposes losses that two EU officials said would be no more than 40 percent on uninsured depositors at Bank of Cyprus Plc, the largest bank, which will take over the viable assets of Cyprus Popular Bank (CPB) as it’s wound down.
“I’m not happy with the agreement because it will be a destroyer for the Cyprus economy,” said Yannis Emmanouilidis, 50, a chemist. “Because if our bank system is destroyed, the whole economy will be destroyed.”
Bank assets in Cyprus swelled to 126.4 billion euros at the end of January, seven times the size of the 18 billion-euro economy, from 78 billion euros in 2007, data from the ECB and the EU’s statistics office show.
Emmanouilidis said he has an account at Popular Bank, or Laiki in Greek, and is thinking about withdrawing his money, though he doesn’t want to exacerbate the economic problems.
If he does, he will have to wait. Banks in Cyprus, which have been shut for the past week, remain closed and lawmakers voted last week to impose capital controls to prevent a run on deposits when they reopen.
“Maybe we won’t have the right to take out our money,” Emmanouilidis said. “This is a free market and the banks won’t let us take our money out? This is amazing in a democracy of the European Union.”
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George Osborne told MPs on the Treasury select committee that the government was looking at ways to stop the UK arm of Cyprus's second largest bank, Laiki, being "sucked" into the bailout of Cyprus.
"I can say the Treasury is working with the Cypriot authorities on a British solution to the branch of the Cyprus Popular Bank [Laiki]," the chancellor said.
"Those discussions are taking place at the moment, I can't say a great deal more about them, but we are engaged in negotiations to try to avoid the branch of Cyprus Popular Bank in the UK, or branches, becoming sucked into the Cypriot resolution process," he added.
Under the terms of the €10bn bailout for Cyprus, Laiki is to be wound down and customers with accounts below €100,000 transferred to the country's largest bank, Bank of Cyprus. Customers with more than €100,000 could lose as much as 40% as Cyprus contributes to its €17bn bailout.
George Orwell got there first (see here )
Doublethink means, according to George Orwell's dystopian novel Nineteen Eighty-Four:
... the power of holding two contradictory beliefs in one's mind simultaneously, and accepting both of them. ... To tell deliberate lies while genuinely believing in them, to forget any fact that has become inconvenient, and then, when it becomes necessary again, to draw it back from oblivion for just so long as it is needed, to deny the existence of objective reality and all the while to take account of the reality which one denies—all this is indispensably necessary. Even in using the word doublethink it is necessary to exercise doublethink. For by using the word one admits that one is tampering with reality; by a fresh act of doublethink one erases this knowledge; and so on indefinitely, with the lie always one leap ahead of the truth.
As Orwell explains in the book, the Party could not protect its iron grip on power without degrading its people and exposing them to constant propaganda. Yet knowledge of this brutality and deception, even within the Party itself could lead to disgusted collapse of the state from within, as the Soviet Union later fell in the late 20th century.
From Nicosia, Sky News's Ed Conway reports that there is still calm at the cash machines this morning..
Well what's the point in panicking at a cash machine that's only going to give you a 100 euro a day any ways? Let's see what happens when the bank opens. And can you please keep an eye on what's happening elsewhere in the periphery banking system after Dieselbombs foot in mouth chat with the FT or whoever it was...
Alternatives
Does it bother you as much as it does me when we get to hear "there are no alternatives" as the meagrest of explanations why we have to put up with yet another bank bailout?
It really flies in the face of reason to say a society of free and creative people cannot come up with alternatives to the current ideology (that of corporatism).
And it's a lie. What the very small number of people siphoning off vast amounts of wealth want, is that we don't even consider alternatives.
Alternatives to the monoculture we have with regards to money - a fiat based private controlled interest bearing currency - exist already. Switzerland has the succesful Wir, Japan has a currency besides the Yen that is used to provide healthcare and services to seniors, and there are many examples already. Bernaerd Lietaer, a former central banker and hedge fund manager, advocates very convincingly for alternative and complementary currencies. Check out the videos on his site.
Alternatives to the way in which we organise labor - which we have now left in the hands of corporations that have become larger than states and are able to capture enough of our politicians to become effectively above the law.
These alternatives exist. Richard Wolff analyses the austerity predicament here and proposes economic democracy as an alternative to corporatism.
And here, too, there are many existing and succesful alternatives. Check out the Mondragon Corporation!
Is a different kind of banking possible?
Yesterday here in Belgium "NewB" started raising funds through the sale of shares in order to set up a cooperative bank, that wants to invest in the real economy, be transparent, not chase high returns, pay out a 6% dividend max, be owned by the people and only invest in socially acceptable and understandable products.
They planned to get 10.000 cooperants in 100 days. They have almost achieved their target after 2 days...people are fed up. I bought a share, for 20 euro.
I propose, if we are to get past the usual bickering as displayed here and elsewhere about how to get out of the crisis, we will have to consider the system we are living in and alternatives to it. We can't solve our problems by thinking inside the box.
It's time to start voting with our money and feet. Nothing else will work, and it can't be stopped unlike a demonstration or a strike.
Our current leaders seem to all have a neoliberal education and their thinking is stuck in that mould. Strike out and you get sidelined, no career or anything. You survive but not as you might wish. Things will only change when the populations realise just how wrong the neoliberal economic thought actually is and how it just does not apply to the current world; it hasn't since 1971. For that to happen, we need a questioning media, people to challenge from a position of knowledge.
Our current leaders seem to all have a neoliberal education and their thinking is stuck in that mould.
yes, like you posted above, it's not just doublethink but also a very bad case of groupthink. Of course, with a media that is wholly owned, it's not that hard to set the debate.
There are sparks of hope though. Belgian state telly had a debate between the neoliberal Karel De Gucht (EU trade commissioner) and econ prof Paul De Grauwe, a "regular" liberal, about austerity.
De Gucht was totally pwned. And suddenly, where before not adhering to a 2,15% deficit was only called for by the "commie" PS and derided in Flanders, it's accepted that we will deviate slightly. We even asked Olli
President of the European Parliament Martin Schulz has published a statement on Cyprus, in which he heavily criticised the handling EU's handling of the situation, saying:
The way the Cyprus case was handled is no way to do business in the EU. Negotiations lacked transparency, democratic accountability and were badly communicated.
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