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Cyprus

Post by Miles1 on Wed Mar 20, 2013 10:05 am

Chaos as Cyprus votes down bailout bank grab

CYPRUS plunged Europe into fresh crisis as it became the first country to turn down a bailout since the economic crash began.

Its parliament forcefully rejected a critical draft bill that would have seized part of people's bank deposits in order to qualify for a vital international bailout.

It forced the European Central Bank to back away from earlier threats to withhold aid -- but brought the small Mediterranean island closer to banking meltdown.

The vote was also a setback for the eurozone after several other countries, including Ireland, accepted unpopular austerity measures.

Upping the ante last night, Cypriot government MP Marios Mavrides raised the prospect of leaving the euro and printing the Cyprus pound again. "That will be the end of Cyprus in the eurozone," he said on BBC 'Newsnight'.

Germany's finance minister warned that it was unclear whether the banks in Cyprus would ever be able to open again.

Wolfgang Schaeuble claimed two of Cyprus's big banks are currently being propped up solely by emergency liquidity from the European Central Bank.

"Someone needs to explain this to the Cypriots," he said.

The new crisis highlights political disagreements and piles pressure on Europe's leaders over their ability to take control of the financial crisis.

Stocks dropped and the euro fell to a three-month low against the dollar as the markets digested the prospect of impasse in Cyprus and new, bitter divisions in Europe.

The latest flare-up erupted when the island state's parliament voted overwhelmingly to reject the proposed levy on bank deposits.

With hundreds of demonstrators facing riot police outside parliament and chanting, "They're drinking our blood", the ruling party abstained from the vote.

Amid fears about what will happen next, the ECB quickly issued a statement in Frankfurt promising to provide liquidity to banks in Cyprus, within the central bank's rules.

But European leaders will be forced into feverish action today to hammer out some sort of deal.

The EU and IMF are demanding that Cyprus raise €5.8bn from depositors to add to the €10bn bailout and rescue its financial sector.

Last night's vote now puts Cyprus on a direct collision course with the rest of the EU.

Although Cyprus is the smallest eurozone country to be bailed out, the details of the proposed plan had already sent shockwaves through the single-currency area.

It was to be the first time savers' banks accounts have been directly targeted. Other bailed-out countries including Ireland, as well as Greece and Portugal, have raised funds by imposing new taxes.

Finance ministers had urged the Cypriot government to avoid hitting accounts below €100,000, and instead increase the levy on big accounts, which are unprotected by the state-deposit guarantee.

Newly-elected President Nicos Anastasiades earlier said he expected parliament to reject the tax on bank deposits "because they feel and they think that it is unjust and it's against the interests of Cyprus at large."

But EU countries said before the vote that they would withhold bailout loans unless depositors in Cyprus shared the cost of the rescue, and the ECB had threatened to end emergency-lending assistance for teetering Cypriot banks.

"There is no precedent for what would happen if Cyprus rejected the conditions," Holger Schmieding, an economist at Berenberg Bank in London, said before the vote.

"Our best guess is that Europe would give Cyprus a brief and final chance to rethink and vote again."

Banks were due to remain closed today to avoid a bank run where deposits flood out of the system. The island's stock exchange also suspended trading.

But both banks and the stock exchange were due to re-open tomorrow, creating a looming deadline for talks – but this now seems unlikely.

For worried Cypriots – who emptied the island's cash machines over the weekend in panic – the vote was seen as a victory, at least in the short term.

Jubilant crowds outside parliament broke into applause following the vote, chanting, "Cyprus belongs to its people."

"The voice of the people was heard," said Andreas Miltiadou, a 65-year-old pensioner among the demonstrators.

Dangerous

Cypriot Finance Minister Michael Sarris flew to Moscow yesterday to seek Russian financial assistance. He was forced to deny by text message reports that he had resigned, which rattled nerves as lawmakers were poised to vote.

Government spokesman Christos Stylianides said Prime Minister Anastasiades might also speak to Russian President Vladimir Putin, who had described the deposit levy as "unfair, unprofessional and dangerous."

But Russian authorities have denied rumours that the Kremlin might offer more money – possibly in return for a future stake in Cyprus's large but as yet undeveloped offshore gas reserves which have raised the island's strategic importance.

An influx of Russian money and influence since the collapse of the Soviet Union has led some Brussels officials to complain, privately, that Cyprus acts as a "Trojan donkey" for Moscow inside the EU.

However bad you guys say Obama is, at least no-one in the US us talking about going in and automatically raiding your bank accounts to fill the gaps....

Apparently one of the main reasons that the IMF were pushing for this is that Cypress is used as a tax haven by the big Russian oligarchs/mafiosi (same difference) to the tune of several billion, so they wanted grab some of that money before the russkis could pull it out....

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Re: Cyprus

Post by Marconius on Wed Mar 20, 2013 11:08 am

I've been watching this and your are right, i do not believe this would happen today in tUSA.

Of course we have to think about what would happen if our government keeps running massive debt. Our government has shown a total disregard for citizen's rights ever sense 9/11. Do not think that at some point, someone in DC will not attempt this if and when it gets bad enough. It may not be this admin, but I ain't gonna say it will NEVER happen.

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Re: Cyprus

Post by Sir Pun on Wed Mar 20, 2013 2:30 pm

The bad news is that once progressives come up with an idea they like, it NEVER goes away. They just keep repackaging it and trying again. So the very idea being floated out there is bad in and of itself

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Re: Cyprus

Post by Sir Pun on Wed Mar 20, 2013 2:31 pm

Btw, the sheer fact that cyprus could endanger the eurozone is testament to just how stupid the eurozone concept is.

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Re: Cyprus

Post by Marconius on Wed Mar 20, 2013 3:06 pm

Pun wrote:Btw, the sheer fact that cyprus could endanger the eurozone is testament to just how stupid the eurozone concept is.

With global trade currencies that are fiat currencies, it affects us all........that is a stupid concept.

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Re: Cyprus

Post by Sir Pun on Wed Mar 20, 2013 3:29 pm

Well yeah on the grander scale.

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Re: Cyprus

Post by Sir Pun on Wed Mar 20, 2013 3:31 pm

And i love how the imf, set up for third world countries, has become THE bailout dolers for europe. Primarily funded by us taxpayers of course. The globalists in action between them and brussels.

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Re: Cyprus

Post by Dennis324 on Wed Mar 20, 2013 6:34 pm

Miles1 wrote:

However bad you guys say Obama is, at least no-one in the US us talking about going in and automatically raiding your bank accounts to fill the gaps....
No one is yet, but I wouldnt be surprised if some of these Einsteins in Con gress did propose such a nutty idea. I'm not sureour laws would permit such a thing happening. But then again, I think FDR stole everyone's gold many years back. So...

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Re: Cyprus

Post by Sir Pun on Thu Mar 21, 2013 6:35 am

Were at the point now where the government can just about do anything it wants.

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Re: Cyprus

Post by Miles1 on Thu Mar 21, 2013 9:28 am

Pun wrote:The bad news is that once progressives come up with an idea they like, it NEVER goes away. They just keep repackaging it and trying again. So the very idea being floated out there is bad in and of itself

And where exactly does it say that it was progressives that came up with this? The president and majority party in Cyprus at the moment are conservative/Christian-democratic, and the IMF aren't exactly a champion of the people....

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Re: Cyprus

Post by Marconius on Thu Mar 21, 2013 9:30 am

Miles1 wrote:
Pun wrote:The bad news is that once progressives come up with an idea they like, it NEVER goes away. They just keep repackaging it and trying again. So the very idea being floated out there is bad in and of itself

And where exactly does it say that it was progressives that came up with this? The president and majority party in Cyprus at the moment are conservative/Christian-democratic, and the IMF aren't exactly a champion of the people....

Neither are the progressives. You (and most others) keep forgetting that the terms mean different things depending upon the established government.

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Had the Japanese got as far as India, Gandhi's theories of "passive resistance" would have floated down the Ganges River with his bayoneted, beheaded carcass. -- Mike Vanderboegh.
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Re: Cyprus

Post by Sir Pun on Thu Mar 21, 2013 9:59 am

And from what i understand it was the chprus go ernment that nixed the deal, which was dreamed up by the imf. At least thats my understanding of it

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Re: Cyprus

Post by Miles1 on Fri Mar 22, 2013 8:46 am

Pun wrote:And from what i understand it was the chprus go ernment that nixed the deal, which was dreamed up by the imf. At least thats my understanding of it

Well, it wasn't the government that nixed it, the plan was thought up by the cypriot government in response to the EU/IMF pressure, and parliament rejected it because of the huge public outcry. So, you see people power does work, even if only in small countries where a few hundred protesters can make an impact.

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Re: Cyprus

Post by Dennis324 on Sun Mar 24, 2013 12:57 pm

Ok help me out here. Why arecountries like Ireland, Greece and Portugal in such financial trouble? I mean...I dont fully understand why the US is in as much trouble as we are (other than digitizing money, weakening the dollar and wasting money). But I dont really understand the micro details of it.

Anyway, what it sounds like to me is that the EU/IMF has said they would bail out Cyprus os Cyprus raised part of the money themselves. So someone in Cyprus' govt decided the way to do it was to raid people's bank accounts. They would do this rather than impose a govt tax. Is that it? scratch

What empowers the govt to do that over there? I mean...here, the Constitution gives Congress the right to levy taxes...but does not give them the right to just go in and raid your bank accounts.

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Re: Cyprus

Post by Bryant on Sun Mar 24, 2013 1:03 pm

Dennis324 wrote:Ok help me out here. Why arecountries like Ireland, Greece and Portugal in such financial trouble? I mean...I dont fully understand why the US is in as much trouble as we are (other than digitizing money, weakening the dollar and wasting money). But I dont really understand the micro details of it.

Anyway, what it sounds like to me is that the EU/IMF has said they would bail out Cyprus os Cyprus raised part of the money themselves. So someone in Cyprus' govt decided the way to do it was to raid people's bank accounts. They would do this rather than impose a govt tax. Is that it? scratch

What empowers the govt to do that over there? I mean...here, the Constitution gives Congress the right to levy taxes...but does not give them the right to just go in and raid your bank accounts.

The US is in trouble because our leaders can't pull their heads out of their rumps. Remember, our credit rating wasn't reduced because of the size of our debt or our debt:GDP, but rather because of concern about the two parties not being able to work together to do the basic tasks of running a nation.

To my understanding several European nations overextended themselves, borrowing too much and taxing too little.
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Re: Cyprus

Post by Dennis324 on Sun Mar 24, 2013 1:44 pm

Are we not also borrowing a lot of money and over extending as well? This is weird because, if we are just gonna print money like we're doing...why borrow money from anyone?

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Re: Cyprus

Post by Sir Pun on Sun Mar 24, 2013 3:22 pm

Wow i cant even believe this debate

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Re: Cyprus

Post by Marconius on Sun Mar 24, 2013 11:19 pm

Neither can I.

I won't touch the why borrow if we can print thing.

Some need to research recent(by recent I mean since 2009) exectutive orders. Pres Obama signed one giving government the explicit power to raid our accounts. So far they have only used it on "terror suspects".


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Re: Cyprus

Post by Sir Pun on Mon Mar 25, 2013 9:36 am

So they came up with a last minute deal and the cypriot economy is expected to drop 10% now. Cant any of you left thinkers see that all these bailouts are just like trying to pull the bandaid off slowly? Its strething it out. I mean christ the recession began 5 years ago! We should already be well out of it by now.

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Re: Cyprus

Post by Dennis324 on Mon Mar 25, 2013 1:18 pm

I dunno which 'left thinkers' you are referring to. Let me rephrase for some of you who didnt get it.

If we are just gonna borrow money and get further into debt...what's the point of the Fed printing money and devaluing and weakening the dollar?

Rolling Eyes (sarcasm intended)



Last edited by Dennis324 on Mon Mar 25, 2013 1:46 pm; edited 1 time in total

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Re: Cyprus

Post by Sir Pun on Mon Mar 25, 2013 1:44 pm

Wasnt talkig abt u denny

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Re: Cyprus

Post by Dennis324 on Mon Mar 25, 2013 1:45 pm

Embarassed Oops...my bad.

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Re: Cyprus

Post by Miles1 on Wed Mar 27, 2013 11:46 am

Dennis324 wrote:Ok help me out here. Why arecountries like Ireland, Greece and Portugal in such financial trouble? I mean...I dont fully understand why the US is in as much trouble as we are (other than digitizing money, weakening the dollar and wasting money). But I dont really understand the micro details of it.

Am not an economist but I'll give it a go:

Am not 100% sure about Greece & Portugal, but the problem here was that during the boom times the banks were lending money to anyone who could fog a mirror with not much thought as to whether or not they could pay it back, and everyone was spending the money on building & buying houses. So, house prices were going though the roof, but it was OK, they were still seen as a good investment so ppl kept buying them, and builders kept building them. As a result, a huge percentage of our economy (and therefore the government's tax take) was based on the construction industry. Then the whole sub-prime mortgage thing in the US blew up and the economic tailspin caused by the fall-out from that caused the bottom to drop out of the housing market. Suddenly no-one wanted to buy houses any more, prices dropped like a stone, and so the construction industry went into a flaming death spiral, taking a significant chunk of our economy with it. That had a few different effects. One was the govt's tax take dropped by about 1/5th between 2007 and 2008, and that's gonna hurt your economy no matter who you are or what you're spending your money on. Second was all the previously high roller builders & property developers were out of business and weren't spending money any more, which had a knock on effect to other businesses who had to close down as no-one was buying any more, so unemployment started going up on other sectors besides just construction. Third was people who'd bought during the boom were now stuck in negative equity, where their house was worth maybe 1/3 less now than what their mortgage was set at, so they were stuck paying a high mortgage on a house they couldn't sell - and a lot of them would have lost their jobs or had pay cuts so were stuck with debts they couldn't afford. Fourth was that a lot of the loans that banks had made during the boom times were now worth diddly squat to them as they'd never get them back, so the banks started going belly-under as banks make more money off lending to each other than lending to actual people, and no-one is going to want to touch a bank that has so many bad debts on its books (pretty much what happened to Lehmans in the US).

That's pretty much what happened across Europe, with Ireland, Greece, Spain and Portugal being the worst hit as we were the ones that went the maddest with buying houses we couldn't really afford. Then though, when we thought we'd hit rock bottom and things couldn't get much worse, the Irish Government pulled out the heavy digging equipment and fucked us all over by bringing in a Bank Guarantee Scheme where they basically said that they would back the debts of our 4 biggest banks so as to ensure that they'd stay afloat. In other words, what was previously around €73bn of private bank debt became €73bn of national debt, so as a nation we all ended up paying the debts of a relative few. And that's pretty much why we "needed" the bailout and all the austerity measures since.

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Re: Cyprus

Post by Miles1 on Fri Mar 29, 2013 5:50 am


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Re: Cyprus

Post by Dennis324 on Sat Mar 30, 2013 12:21 am

Miles1 wrote:
Dennis324 wrote:Ok help me out here. Why arecountries like Ireland, Greece and Portugal in such financial trouble? I mean...I dont fully understand why the US is in as much trouble as we are (other than digitizing money, weakening the dollar and wasting money). But I dont really understand the micro details of it.

Am not an economist but I'll give it a go:

Am not 100% sure about Greece & Portugal, but the problem here was that during the boom times the banks were lending money to anyone who could fog a mirror with not much thought as to whether or not they could pay it back, and everyone was spending the money on building & buying houses. So, house prices were going though the roof, but it was OK, they were still seen as a good investment so ppl kept buying them, and builders kept building them. As a result, a huge percentage of our economy (and therefore the government's tax take) was based on the construction industry. Then the whole sub-prime mortgage thing in the US blew up and the economic tailspin caused by the fall-out from that caused the bottom to drop out of the housing market. Suddenly no-one wanted to buy houses any more, prices dropped like a stone, and so the construction industry went into a flaming death spiral, taking a significant chunk of our economy with it.

Crud...I knew somehow this was all gonna be our fault. Sad

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