The plot thickens...The European Commission has told reporters in Brussels that large uninsured depositors could to be "bailed-in" to help rescue a bank, under a new draft EU law on bank resolutions.
The comments came as the EC fielded questions on Jeroen Dijsselbloem's (the governor of Ciprus designate) comments yesterday that Cyprus showing the way ahead for handling financial crisis.
Brandenburg civil servant pensions exposed to Cyprus.
The German state of Brandenburg has admitted that around €2m of its civil servants' pension fund is in Cypriot bonds. Much of the rest of the fund is in other crisis countries such as Ireland, Spain, Portugal as well as the Cayman Islands. Its finance minister Helmuth Markov from the far-left Linke party says he's confident their value will bounce back. (well, he has to say that, doesn't he?)Will perhaps trigger a bit of much-needed Schadenfreude in Cyprus?
Schäuble blames classroom jealousy...Remarkable comments from Germany's finance minister, Wolfgang Schäuble, this morning -- he's compared criticism of the tough German approach to the negotiations to classroom envy.
Here's the quotes (via Kathimerini) : "It always works out like that,” he told ZDF television. “This also happens in classrooms. Sometimes when you have better results, others have difficulties with this, sometimes they are even a little jealous."
Ironic timing, as children in Nicosia left the classroom to protest against the bailout terms.
His Cyprus counterpart, Michalis Sarris, looked like a man still reeling from a nasty encounter with an exam paper* this morning. He told Bloomberg that there's been little Esprit de corps during Sunday's negotiations. Europe Union should be about showing support to fellow members, but...We did get some support from some participants, but there was a definite hard line by others.
8 comments:
Cyprus unveils draconian capital controls in bid to avert bank run
Cypriots face a suspension of credit card payments for overseas goods and a ban on cashing cheques under draft capital controls designed to avert a run on the banks.
6 Comments
Cyprus bail-out: as it happened - March 27, 2013 Defiant EU demands extra £9.5b to cover its budget Cypriot 'solution' threatens further carnage among other PIGS
Cyprus unveils draconian capital controls in bid to avert bank run
Cypriots face a suspension of credit card payments for overseas goods and a ban on cashing cheques under draft capital controls designed to avert a run on the banks.
6 Comments
Cyprus bail-out: as it happened - March 27, 2013 Defiant EU demands extra £9.5b to cover its budget Cypriot 'solution' threatens further carnage among other PIGS
The government was expected to decree that cash withdrawals would be limited to €300 a day and Cypriots would not be allowed to transfer their savings overseas.
The measures were designed to prevent a run of the banks, after a tumultuous two weeks in which Cypriots learnt they would lose billions of euros from their accounts in an accord drawn up by the government to secure a €10bn euro bail-out from international lenders.
Businesses and individuals with more than 100,000 euros are in for a massive hit and could see at least 40 per cent of their savings forcibly converted into bank shares.
The two worst hit lenders are Laiki Bank, which is to be dissolved, and Bank of Cyprus, which will absorb Laiki’s assets.
Payroll transactions will be permitted so that businesses can pay their employees.
davet2
31 minutes ago
Will G4S be 40% short of guards to match the deposit accounts ?
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Mingtb
37 minutes ago
The government has nothing to fear.
The masses are naive, gullible, sheep thoroughly intimidated.
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BrownTrousers
55 minutes ago
Will they be paying the G4S bouncers cash in hand?
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ameliemaryann
Today 06:51 PM
How typical of Britain today: the only presence (of Security Guards) in Cyprus will be the boot stamping on the human face, for ever (to paraphrase Orwell). How utterly disgusting!
Police and private security guards will be on hand to make sure that customers do not physically or verbally abuse bank staff.
The 180 guards will be provided by G4S, a British company which was last year involved in a security debacle at the Olympics after it admitted two weeks before the Games started that it could not provide the 10,400 guards it had promised.
"Our presence there will be for the comfort of both bank staff and clients, but police will also be present," John Argyrou, the managing director of the firm's Cypriot arm, told AP.
He said he thought the chance of serious trouble was unlikely because Cypriots had had time to “digest” what had happened to their banking and financial sector.
"There may be some isolated incidents, but it's in our culture to be civil and patient, so I don't expect anything serious," he said.
Correspondents say some fear a stampede as banks in Cyprus reopen between noon and 18:00 local time (10:00-16:00 GMT), nearly two weeks after they closed and progressively stricter limits were placed on withdrawals at cash machines.
Armed police are on guard and hundreds of staff from the private security firm G4S will be guarding bank branches and helping to transport money, said the AP news agency.
Severe new rules have been imposed on money movements to prevent a torrent of money leaving the island and credit institutions collapsing.
As well as the 300-euro daily withdrawal limit, Cypriots may not cash cheques. They can spend up to 5,000 euros on debit and credit cards.
Payments of over 200,000 euros require prior approval by a specially established committee - only the Cypriot government and its Central Bank are excluded.
There is a cap of 5,000 euros on transactions with other countries and travellers leaving the country will only be allowed to take 1,000 euros with them.
On Wednesday night, hundreds of protesters rallied outside the presidential palace, chanting: "I'll pay nothing; I owe nothing," the Reuters news agency reported.
Allegedly the ECB transferred up to 5bn in physical cash by plane to Cyprus last night. Seems a bit much for physical cash as it is multiple times the usual circulation.
While the 7 day term for capital controls seems unrealistic, they really need to lift the capital controls as early as humanly possible, becaue (a) people will get more creative in getting around the controls thereby making them ineffective (b) businesses will be damaged even further (c) it would raise further doubts about Cyprus remaining in the EZ.
They can't keep them for the 5 years Iceland had, that's certain.
Looks like former Eurogroup chief Juncker isn't too happy about his successor Dijsselbloem, reports SpiegelOnline.
Jean-Claude Juncker, primeminister of Luxemburg and former head of the Eurogroup criticised his successor, Jeroen Dijsselbloem, for creating the impression that savings in Europe might not be save.
Moreover the primeminister of Luxemburg rejected comparisons of his country with Cyprus. "There are no parallels between Cyprus and Luxemburg and we do not let people impose such parallels on us."
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