49 2 mins 9 yrs

It is so obvious that the EU is getting more daring at showing JUST how draconian it wishes to be with savers deposits!

Cypriot Central Bank Governor Panicos Demetriades suggested yesterday that the large uninsured depositors in the Bank of Cyprus could lose up to 40% of their money. Cypriot Finance Minister Michalis Sarris later suggested that large depositors in Laiki Bank may, at best, get 20% of their money back in several years’ time.

Sarris also stated that capital controls will be in place for seven days and will then be re-assessed – and will not apply to all banks. The controls are likely to include: weekly limit on cash withdrawals, limit on cashing cheques, extension of fixed term deposits and a limit on the cash export of euros.

So, savers in at least ONE bank will lose 80% of their assets and will not get the balance of 20% back for YEARS! And this is all aimed at appeasing the Germans and keeping the Euro afloat. Madness!

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49 thoughts on “EIN VOLK, EIN REICH, EIN EURO.

  1. What’s your alternative?

    The banks are insolvent- the savers’ assets are not there. Do you want the ECB or other Cypriots / Europeans to give them free money to make up the loss?

  2. The Germans? Pleasing the Germans!?? David – do you really think that ‘the Germans’ who are working in Hamburg or Duesseldorf are remotely interested in swindling Cypriots out of their money?

  3. The Germans want a stable system.

    They’d prefer not to have any more people pick their pockets, either.

    The ECB solution is correctly referred to as a ” bail in ” not a ” bail out “. Large depositors are not getting free money from Brussels or Germany. I understand how painful it all is, but the critics of the ECB still have no solution. If one is to be critical of the ” theft ” of deposits, you have to say what should have been done. There is no free lunch.

  4. As has been stated many times, the Euro is one of the largest financial and political errors that have ever been made.

    You can’t have one currency unless you have a coordinated fiscal policy.

    But none of this is a reason why anyone should give depositors in Leiki Bank free money.

    There is no free lunch, there has been no theft.

  5. “As has been stated many times, the Euro is one of the largest financial and political errors that have ever been made.”

    You’ve changed your tune.

  6. No, you just don’t pay attention!

    I’ve noted the popularity of the Euro and its advantages – not having zillions of currencies in a small region.

    I’ve never said that it was a good idea. I have said that having one currency and multiple, uncoordinated budgets, was an error.

    There is a good and bad to it. But in retrospect it was a huge error, in how it was done. The UK was very wise to stay out of it – which I have also said more than once.

  7. I’ve also said, from afar, that the idea of a European Union itself was an error.

    A European confederation, or a looser, much more voluntary union, with little or no oversight of anything from Brussels, was the way to go.

  8. As for ‘the Germans’, they never wanted the Euro. Every German with whom I had spoken at the time of the advent of the Euro and ever since told me that he/she was and is against the Euro. But no vote was allowed.

  9. Allan

    I can vouch for that, I have stated this before, in meetings the Euro is hailed .. in private I have never yet met one single German, Friend & colleague who hate and detest the Euro.

    If you want to wind a German Taxi driver up, just mention the Euro currency, but you had better strap yourself into that seatbelt .

    Allan is correct, Ze Germans did not get a say on the matter.

  10. Did the people who put their money in these banks not understand what the word uninsured meant?

  11. Pete at least is consistent on this – he wants no bailout for anyone. And you can make a case for that.

    Allan wants the depositors to be bailed out by all the other Cypriots – about as unfair a solution as you could find.

    The rest are complaining about the depositor haircut but aren’t proposing anything else.

    This ECB move actually is a needed step in the direction of pain being shared by bondholders and by some of the depositors.

  12. The theft/haircut has already happened. The banks assets do not match the liabilities. Now the argument is about who suffers from that.

  13. I think Allan is hinting that it’s the jews who are behind Cyprus’s financial woes.

    As always.

    Basically no one else has agency, and are just pawns of the ravenous jews.

  14. It is harsh to criticise Germany- if Cyprus wants to receive money from German taxpayers then the German government is entitled to impose conditions. No one forces countries to ask for German money.

    Having said that German power is now a problem for Europe- you can’t have a situation where one country makes the decisions for the other 26 without provoking a backlash.

  15. Ross

    I’m curious.

    It is hard for everyone- the north of Europe is not loving this.

    I absolutely think that the criticism of the Germans here is wrong on every level. But lets say that the Germans and ECB they asked you what they should do here, what would you counsel them to do?

  16. Phantom- I would construct a mechanism by which countries can leave the Euro. Even that couldn’t be done neatly until the crisis is resolved though, so there is probably not a short term solution available.

  17. Ross

    But there’s all this talk – entirely mistaken in my book – about unfair, brutal treatment of depositors.

    Do you think that depositors should be made whole, or partly made whole , and if so, who should be paying for that?

  18. I agree with your Euro comment btw.

    The rich Euro world ( Germany, Holland, Finland, etc ) is not the same world that Greece and Cyprus and some other places live in. The differences are too great, and its unfair to both Germany and to tiny and very different economies such as Cyprus.

  19. //This ECB move actually is a needed step in the direction//

    It must be great to be a Cypriot: you can do anything you want and it’ll always be blamed on the Europeans or the Germans.

    All that the ECB and the IMF want from Cyprus is a credible plan for how the state and banking system can be straightened out. How it goes about that is its business. No it wants to fleece deposit holders, and it looks like they can not only do so but even make it look like it was someone else’s idea.

    //I have never yet met one single German, Friend & colleague who hate and detest the Euro.//

    Well done, Harry, you have finally got something right.

  20. Let’s look at what I really wrote and not the Phantomised version of it:

    Cyprus leaves the Euro, lets the banks collapse, repudiates its debts and produces its own national currency. It then creates its own national bank and gives the depositors back their money in the new Cypriot drachma. It will trade in its produce and earnings from tourism, and also has sizeable offshore assets yet to be developed. Cyprus won’t be poor but it must rid itself of the parasitism of finance

    Now, this is the bit that Phantom doesn’t like because, if Cyprus were to implement it, Phantom and his buddies in the bubble would be taking a ‘haircut’ –

    repudiates its debts and produces its own national currency

    However, it appears that the President’s cronies and the big Russian depositors have escaped the troubles in Cypriot banks:

    http://www.zerohedge.com/news/2013-03-25/have-russians-already-quietly-withdrawn-all-their-cash-cyprus

    No one knows exactly how much money has left Cyprus’ banks, or where it has gone. The two banks at the centre of the crisis – Cyprus Popular Bank, also known as Laiki, and Bank of Cyprus – have units in London which remained open throughout the week and placed no limits on withdrawals. Bank of Cyprus also owns 80 percent of Russia’s Uniastrum Bank, which put no restrictions on withdrawals in Russia. Russians were among Cypriot banks’ largest depositors.

    Banking – legalised criminalty, especially in the US and UK.

  21. Allan

    Did you not say that the depositors should be made whole in new Cypriot drachma that could be financed if needed by offshore oil rights.

    Is that not the fundamental statement that you made.

  22. The bondholders are already taking haircuts of up to 100%

    If that’s not enough, should the depositors be made to suffer any loss at all? If not, who in Cyprus or Europe should make them whole?

    Most harsh critics of the ECB / EU are completely avoiding this rather fundamental question.

    How do you balance the books?

  23. Phantom – what I wrote is above. There is no point in making things up. If I had said what you attribute to me, you would be able to link to it.

  24. It then creates its own national bank and gives the depositors back their money in the new Cypriot drachma.

    I was being nice to you.

    The depositors lost their money in private banks. That stinks, but it’s life.

    You want [ the Cyprus govt ] to ” give the depositors back their money “.

    But the Cyprus government doesn’t hold those deposits now, in Euro, or drachma. If the depositors are made whole now, it would be via a gift from the Cyprus state…paid for if necessary out of the national assets ( offshore and other ) that you mention.

    Otherwise how would you propose that Cyprus fund these accounts? Money doesn’t grow on trees you know.

  25. The main concern I have with taking depositors money is the possibility that savers in general will start to withdraw their money from banks and cause more bank collapses in vulnerable countries.

  26. Money doesn’t grow on trees you know.

    In reality, it pops up at the stroke of a keyboard – $trillions of it whenever it’s needed to swindle pensioners and savers. It’s called ‘quantative easing’.

    By renouncing its public debts and giving your friends a ‘haircut’, and allowing the squandering banks to fail then setting up its own national bank, the government of Cyprus will effectively nationalise the banks and create its own currency without any interest payments to those who currently hold it in thrall. The depositors who lost money will then be refunded in the new drachma. Now if other countries refuse to trade in that drachma, all the better as the depositors’ funds won’t be leaving the country.
    Cyprus has exports of food procudts and a good tourist sector. It won’t go to ruin any more than Iceland did – but your buddies in the banks will get the ‘haircut’ that they want others to take, and that is what you don’t want.

  27. Btw Phantom – you have opened up an area of discussion whih you usually prefer to keep closed: where does money come from?

  28. You want to give bondholders a haircut? Trust me they’re getting a big one that they won’t like one bit.

    So how do you propose the ” refund ” of the Cypriot bank depositors?

    Now you propose to print it? There’s a fine job waiting for you at the Federal Reserve, my lad.

    How can it be a refund if the Cypriot government never held the funds? It would be a present, paid out of all the Cypriot people’s assets – replacing one swindle ( it it is that ) with another swindle, now matter whether its done by printing or financed out of other national assets.

  29. Phantom – it’s simple. Cyprus simply creates its own money and as much as it needs to run its economy in a productive manner. It will have no debts because it has renounced them, just like Iceland. The reason why so many countries are in a debt-addled mess is because your banking buddies hold them in debt. A nation doesn’t need to be in debt – it simply creates the money it needs to fund itself, interest-free.

  30. Where did those Euro notes come from – they were printed, and the Teuro gave Germans a taste of everybody else’s inflation.

  31. Under your plan, the average Cypriot who does not have a big bank balance that is ” reimbursed ” still gets abused. He or she, by means of the new money that is created, is giving the depositors that a tax free cash present from the Cyprus government that they don’t get. If the principle is one of fairness, your plan is the unfairest of all. You are effectively taxing the poor and working class to make the rich Cypriot and foreign depositor whole.

    The rich depositors will like your plan much better than the bitter but maybe necessary medicine that the ECB is ladling out.

  32. ( revised )

    Under your plan, the average Cypriot who does not have a big bank balance in a broken bank still gets abused.

    By means of the new money that is created by fiat (!) you give the fat cat bank depositors tax free presents from the Cyprus treasury that the little guy does not get.

    If the principle is one of fairness, your plan is the unfairest of all. You are effectively taxing the poor and working class to make the rich Cypriot and foreign depositor whole.

    The rich depositors will like your plan much better than the bitter but maybe necessary medicine that the ECB is ladling out.

  33. The average Cypriot who does not have a big bank balance is seeing his country’s assets being corralled in preparation for a fire-sale, the offshore prospects (the target) being made ready for sell-off to the oil majors, just like Libya’s, and any money which the average Cypriot may have is being taxed to pay the usury of the national debt, a debt to the banking cartel. And now, with the ‘bail-out’ (remind me Phantom – the ‘bail-out’ is another loan i.e. gretaer debt?), the taxation will increase even further.

    The rich depositors have already got their money – that’s why I put up the link at 7.49pm which goes to a source report by Reuters.

  34. Allan: are you saying in your opinion, Cyprus will leave the Eurozone or that it should leave the Eurozone?

  35. Mairin – every country should leave the EU. Whether Cyprus will be ALLOWED to leave the EU is a different matter.

  36. Any EU country can leave it at will. There is no EU Army with an EU General Shetman marching towards Georgia to force you all to stay In it. Especially a big country with options like the UK.

    You do want to tax the poor to bail out the rich depositor. Pete’s plan at least is consistent – bail out no one.

  37. The Russians have been moving into that region big time for years – you can’t have missed the large Russian presence in Istanbul, and there are also strongly involved in smaller places Cyprus and Montenegro.

    The latter is a very curious European entity. It has an Italian climate, eastern orthodox religion and very many of the ways of Saudi Arabia, as least in the position of women. Both Russian and Italian mafia money seems to be keeping the economy afloat. Although not even in the EU, it has now made the Euro the official currency. The ECB has protested, but to no avail.
    A vast amount of money laundring – especially Russian – goes on there, and every year crowds of Russian tourists-business people hit the Montenegran coast likes the hoards of Attila.

  38. very many of the ways of Saudi Arabia, as least in the position of women.

    I’ve never heard of that before, is that just a Montenegro thing or is it true throughout much of the former Yugoslavia?

  39. Ross, it’s only Montenegro. Women are as free as anywhere in Europe in the rest of the former YU, (apart from Kosovo perhaps, and I dont know about Bosnia), but Montenegrans make over display of their macho attitudes and how they have reduced their women to mere servants. I was hyping a bit about Saudi Arabia, of course, but in M. every male is a minor king and behaves like one; while the women must do everything and say nothing.

  40. “The latter is a very curious European entity. It has an Italian climate, eastern orthodox religion and very many of the ways of Saudi Arabia,”

    Sounds like a mad place. Was reading recently about how the Kingdom of Montenegro/Tserna Gora was rail-roaded into joining the original Kingdom of the Yugoslavs by Serbia at Versailles. I wonder how different its recent history might have been as an independent entity.

  41. And it couldn’t happen here?

    http://www.alternet.org/economy/think-your-money-safe-think-again-confiscation-scheme-planned-us-and-uk-depositors

    Confiscating the customer deposits in Cyprus banks, it seems, was not a one-off, desperate idea of a few Eurozone “troika” officials scrambling to salvage their balance sheets. A joint paper by the US Federal Deposit Insurance Corporation and the Bank of England dated December 10, 2012, shows that these plans have been long in the making; that they originated with the G20 Financial Stability Board in Basel, Switzerland (discussed earlier here); and that the result will be to deliver clear title to the banks of depositor funds.

    Although few depositors realize it, legally the bank owns the depositor’s funds as soon as they are put in the bank. Our money becomes the bank’s, and we become unsecured creditors holding IOUs or promises to pay. (See here and here.) But until now the bank has been obligated to pay the money back on demand in the form of cash. Under the FDIC-BOE plan, our IOUs will be converted into “bank equity.” The bank will get the money and we will get stock in the bank.

  42. That most certainly will mean the end of ‘bank deposit accounts’ as a safe, zero risk haven for savers and commerce in general. No longer will depositors feeel that -0.5% interest is adequate, and what use or value will the phoney government savings guarantee be when we all know just how devious the BoE can, or is likely to be, in the future.

    What a strange world, where the thief and the insurer are one and the same.

    I wonder what system will be created to replace the everyday banking, whithout which everyday commerce cannot survive, perhaps something along the lines of Greenshield stamps or Nectar points, whose intrinsic value can be altered on a whim.

    This act of outright thievery, signals the death knell of everyday personal banking as we have always known it. This is a psychological and illegal step too far.

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