These days in Cyprus

[UtwigMU]

ATM_in_Cyprus.jpg

ATM these days in Cyprus

[Dr Mordrid]

So,

• If you save your money, it's selfish. You're refusing to stimulate the economy by spending. Therefore, you must be taxed - forcibly.

• If you spend your money, it's selfish. You're refusing to prepare for your retirement. Therefore you must be taxed.

Gotcha.

[UtwigMU]

So,

• If you save your money, it's selfish. You're refusing to stimulate the economy by spending. Therefore, you must be taxed - forcibly.

• If you spend your money, it's selfish. You're refusing to prepare for your retirement. Therefore you must be taxed.

Gotcha.

If you save your money it's either in savings account, bonds or stocks. In any order this money is lent or invested in businesses who use capital to expand economy.

[Umfriend]

So,

• If you save your money, it's selfish. You're refusing to stimulate the economy by spending. Therefore, you must be taxed - forcibly.

• If you spend your money, it's selfish. You're refusing to prepare for your retirement. Therefore you must be taxed.

Gotcha.

You see this as a tax?? Alternative is the Cypriotic government and the EU did not support the banks and you'd have lost much more. Moreover, I guess among the fat cats having more then EUR 100K in deposits, many relate to black market money, tax evasion, drug money etc. I just do not understand why they did not decide to leave small depositers alone and rip-off mainly foreign depositors...

[Dr Mordrid]

You see this as a tax?? Alternative is the Cypriotic government and the EU did not support the banks and you'd have lost much more.

If the govt. compels the payment of X% of your income or savings then Hell yes, it's a tax! If they were a church I'd call it a titheb but A=A.

Moreover, I guess among the fat cats having more then EUR 100K in deposits, many relate to black market money, tax evasion, drug money etc. I just do not understand why they did not decide to leave small depositers alone and rip-off mainly foreign depositors...

AIUI in Cypriot banks the crooked "fat cats" are mainly Russian gangsters etc.. I'm so sure the Cypriot people are pleased to have their system so influenced by those hoods. With Putin having a hissy fit over their share of this tax I'd be tempted to tell him to go fish, double their share and leave private depositors alone.

[Umfriend]

I see it as the introduction of a type of FDIC while assesing insurance premuims retroactively. But I guess you could argue the Cyprian case being one of subsidies and taxes as well. Of course, it has nothing to do with assumed selfishness being the argument for a "tax".

Agreed on the approach vis-a-vis the Russians.

[Brian Ellis]

It is chaotic here. No one knows what will happen; speculation is rife. What is fact?

That parliament voted overwhelmingly (not unanimously) against the "savings haircut". That is now out of the question. Whether the troika were bluffing or not will be seen today. If not, we have to conjure up, out of nothing, some €5.8bn before the end of this month.

Whatever, something nasty has hit the fan and I suspect it will end up by our selling off gas reserves at a knock-down 5 year futures.

Banks are closed. I managed to get €600 out of a 'hole-in-the-wall' last night as an emergency reserve and may try for some more today. Dunno how the shops are handling their takings: rich pickings for thieves.

Politically, the new President and his government are in a pickle. In a civilised country, after such a parliamentary defeat (0 for, 36 against, 19 abstentions), they would be forced to resign, but this is a banana republic (the bananas are at their best now; mebbe this is what we'll be eating shortly!). There is no constitutional means of forcing them out, unless he is incapable or commits an act of 'moral turpitude', whatever that means. There have been rumours about the FinMin resigning or being kicked out but nothing substantiated. No matter what, Anastasiades is not in an enviable position, inherited from the previous government, which spent all our €€€ like there was no tomorrow (which may still prove right). The poor bugger hasn't been sitting in the Presidential Chair for 3 weeks yet.

God! It's a mess!

[Umfriend]

Are those gas or oil reserves. As I understand it (but I am ignorant on this), gas is cheap and with the US, soon to be the no. 1 energy supplier in the world, pumping up gas-extraction through fracking, supply may well exceed demand soon if it does not already. Not sure you'd be able to get anything close to 5.8 bln given the current state of those fields.

My scenario: first something will be done so that foreigners can extracts their funds from Cyprian banks and then a savings haircut will severly hit the cyprians.

Alternative: default on all creditors, join Turkey and start over.

[Dr Mordrid]

Not enviable for other gas producers what with the US reserves closing in on 2 quadrillion cu/ft and still growing. (still can't adjust to that figure)

Politically / ethnically, how would a merger with Turkey go over? Or would it cause a civil war / conflict with Greece?

[Umfriend]

The greek-cypriots will never actually consider that of course. 'twas a joke.

[Brian Ellis]

There is no question Turkey in any shape or form would be an acceptable solution, no matter what.

The gas is still very hypothetical - there are 3-8 tcf high quality proven from a single well but much larger quantities are believed to be there, possibly 1 qcf, quality and quantity unproven.

[Brian Ellis]

Well, the crunch is coming. Parliament apparently voted through 9 bills last night but God knows what they contain. A team is flying to Brussels as I type, including President Anastasiades. I have a gut feeling that the end is nigh. Germany is fed up and Finland says it will veto any proposals. I'm pessimistic.

Yesterday, I tried to fill up the car with petrol: cash only! Went to 2 shops. A hard discounter (Lidl) accepted all credit/debit cards but a medium supermarket refused credit/debit cards issued by the Laiki and BoC banks but accepted other ones. I understand some other shops/supermarkets refuse all cards, cash only, while others accept all.

Hopefully, the banks will open on Tuesday so that I can feed my current account. I'm nearly in the red, while I have plenty in other a/cs but cannot access them. This means I'm in a cash only state, with only EUR 1023.00 available.

I hope the former government's conscience is hurting them hard for getting us into this mess. Unfortunately, I don't think they have any conscience

[Umfriend]

I assume you have accounts abroad as well? Could you wire through Western Union or somesuch?

[dZeus]

I wouldn't be too worried.

the recent dealings appear to me Germany's way of telling Cyprus that they need to take a big hit on their Russian side-business (offshore banking) in order to get money from the EU. Cyprus of course wants to check if they can get a better deal from Russia.

In the end, Cyprus is the one that gets to chose which deal is better (remain in EU and get hurt with the Russian business, or be closer friends with Russia). Either way, it's a manifestation of the EU being unhappy with Cyprus being a bit too cosy with Russian interests. In the end all the politicians involved are too scared to risk setting off a domino effect of an international banking panic.

[Umfriend]

Perhaps. Another explanation is that Cyprus is small enough to drop so as to give a signal to other weak members that they do need to get their act together. I'm leaning towards that hypothesis.