Guest pelmetman Posted March 16, 2013 Share Posted March 16, 2013 Anyone with savings in a Cyprus bank will lose some of their money under a ground-breaking bailout deal agreed by European finance ministers. Bank customers will pay a levy of up to 9.9% on their savings, a charge which will raise nearly 6bn euros (£5.1bn). Cyprus is the fifth country to seek a bailout following Greece, Ireland (OTC BB: IRLD - news) , Portugal and Spain but the terms of the deal are a radical departure from previous schemes. EU finance ministers have agreed to lend the indebted island 10bn euros but in return the public will be forced to forfeit part of their savings. Savers with more than 100,000 euros (£86,500) in the bank will be charged a one-off levy of 9.9%. Those with less will be charged 6.7%. It will apply to everyone from pensioners to Russian oligarchs, who are alleged to have billions stashed away in what officials say is a bloated Cypriot banking sector. Cyprus' finance minister Dimitris Sarris said in a statement: "We had to make some very painful decisions - and I believe that looking at the benefit of Cypriots and all the depositors of this age and the next, we took the less painful one. "The problem of Cyprus is different to the other countries that are under the support of Europe. It's to do with the magnitude of the bank system and the danger that exists from the effort that Europe demands from us to do to in order to reduce the cost of the adaption of the new situation." Private investors will also face a second hit under a "withholding tax" imposed on interest on bank deposits. The tax will apply to all deposits held in banks within Cyprus, including an estimated 2bn euros (£1.75bn) of British money, according to the European Central Bank. However, it will not affect deposits held in the UK branches of Cypriot banks, such as Bank of Cyprus, whose UK subsidiary is regulated by the Financial Services Authority. More than a third - 37% - of cash held in the Cypriot banking system belongs to non-residents and the country has a large British expat community. Queues of people gathered at cash machines on the island on Saturday as they tried to withdraw their money ahead of the move. And the country's cooperative banks had to shut their doors after seeing a rush of savers keen to protect their money. Savers could apparently withdraw money but were not able to carry out electronic transfers. British expat David Symonds, who lives in Limassol, told Sky News: "Everybody was surprised. We were assured only a few days ago that the haircut on the deposits was a red line for the government. "When we learned that it might become a possibility we were told it would only be on deposits above 100,000 euros. Now (Other OTC: NWPN - news) of course we know it affects everybody." British Cypriot Andy Georgiou, 54, moved his life savings to Cyprus last year after selling his home in London. "I am extremely angry. I worked years and years to get it together and now I am losing it on the say-so of the Dutch and the Germans," he said. Andri Menelaou, 25, had thought anything below 100,000 euros was protected by the state and said: "I don't have much but I don't see why I should pay for bank mistakes." The move is expected to generate 5.8bn euros (£5bn) for Cyprus, which first applied for a bailout in June 2012. Banks have already taken steps to freeze the required amount in deposit accounts and parliament is due to vote on the levy on Sunday. Nicholas Papadopoulos, head of parliament's Financial Affairs Committee, said: "My initial reaction is one of shock. "This decision is much worse than what we expected and contrary to what the government was assuring us, right up until last night." Mr Papadopoulos, Vice-Chairman of the Democratic Party, which is a coalition partner in government, said he did not want to predict how parliament would vote. "If we go ahead with this, there is a great risk it is not the end. The banking system will still face instability because it will face a significant capital flight," he said. Cyprus was badly hit by the Greek financial crisis because of its close links to the country. Its two largest banks saw combined losses of 4.5bn (£4bn) euros - equal to a quarter of the island's gross domestic product. The rescue package was agreed after 10 hours of talks in Brussels and was significantly less than the 17bn euros (£14.7bn) asked for. As part of the deal, the government will also have to hike corporate tax to 12.5% from 10% and sell off state assets to help balance the public finances. Dutch finance minister Jeroen Dijsselbloem said: "As it is a contribution to the financial stability of Cyprus, it seems 'just' to ask a contribution of all deposit-holders." French finance minister Pierre Moscovici added: "We did what we had to." Well that's given the EU ideas 8-)........... Link to comment Share on other sites More sharing options...
Mel B Posted March 16, 2013 Share Posted March 16, 2013 I just heard about it on a snippet of news ... gonna be lots of very unhappy people there. :-| Link to comment Share on other sites More sharing options...
nowtelse2do Posted March 16, 2013 Share Posted March 16, 2013 And if things got very bad here................... (!) (!) They really stitched the Cypriots up, 3 day holiday period. Probably a run on their banks on Tuesday and could spread to the other PIGS..........not a very good idea methinks *-) Dave Link to comment Share on other sites More sharing options...
Guest pelmetman Posted March 17, 2013 Share Posted March 17, 2013 Another reason to leave the EU...... before they get the idea that raiding peoples savings is a good idea >:-) Link to comment Share on other sites More sharing options...
donna miller Posted March 17, 2013 Share Posted March 17, 2013 Well it's down to the voters of this country to make sure the EU loving servants who run the main 3 parties don't get into power then. Link to comment Share on other sites More sharing options...
CliveH Posted March 17, 2013 Share Posted March 17, 2013 This is effectively the negative interest rates (albeit by a different method) that was discussed on another thread. The tax effectively means that if you put 100,000 Euros on deposit you get just over 90,000 Euros back. And for those with less than 100,000 Euros the tax hit is 6.75%. And all so Cyprus can remain in the "Club" whose membership rates are beggaring them. (tho here the e and u are interchangeable) But it should also be said that the alternative (that I for one favour) could have very much the same short term effect - if not even worse but longer term the prospects would be far better. If Cyprus left the Eurozone then the Cyp£ (or whatever they went back to) would be a deeply devalued currency and so in the immediate aftermath you could see 100,000 Euros in a Cypriot Bank become worth half that. But the freedom to control their own destiny would enable a rapid recovery. This is what happened to the £ after we left the ERM - initial awful consequences then 10 months later we were reaping the rewards of being outside. If anyone thinks that it would be a good idea for we in the UK to join the Euro - then this should be a salutary lesson :-S Some have tried to make out that the Euro is more "stable" - what a load of spherical objects! When the only way for a country to remain part of this ridiculous club is for its citizens of that country to have money taken from them on the say so of other member countries then you can safely say that the cracks are no more - they are now deep fissures. Link to comment Share on other sites More sharing options...
CliveH Posted March 17, 2013 Share Posted March 17, 2013 Apparently al lot of the money is dodgy Russian crime proceeds. That will go down well! ............................. Almost half of the depositors, though, are believed to be non-resident Russians, which means those that did not pre-empt the action have been caught by the freeze. Cypriot Finance Minister Michael Sarris, who negotiated the package during ten hours of late-night talks in Brussels, will not be popular with his offshore investors. However, it is being said that, without a rescue, Cyprus would most certainly default, threatening another crisis in the eurozone to add to all the other crises they have to deal with. That has not mollified the unhappy citizens of Cyprus. In the coastal town of Larnaca, Andy Georgiou, 54, speaks for them all. "I'm extremely angry", he says. "I worked years and years to get it together and now I am losing it on the say-so of the Dutch and the Germans". He is a British-Cypriot who returned to Cyprus in mid-2012 with his savings. An unnamed pensioner was a little more direct. "They call Sicily the island of the mafia. It's not Sicily, it's Cyprus. This is theft, pure and simple", he says. But you just have to love Dutch Finance Minister Jeroen Dijsselbloem, who says that, without the levy, it would have been impossible to save Cyprus' financial sector "We are not penalising Cyprus ...,we are dealing with the problems in Cyprus", he says. ............................. "dealing with the problems in Cyprus" - by stealing peoples money? I am sure the dodgy Russian money will simply accept a 10% levy as "OK" as long as the money as "clean" when they want it. But for those genuine savers in Cyprus - a 6.7% "hit" just so that the idiot Dutchman can talk out of his backside about dealing with the problem of Cyprus - when the REAL problem is not Cyprus but those in charge of the biggest financial scam in history - i.e. him and his other unelected mandarins! You watch the run on the Banks in the PIIGS now. 8-) Link to comment Share on other sites More sharing options...
Dave225 Posted March 17, 2013 Share Posted March 17, 2013 Ah but I suspect the really interesting (bad) bit has not sunk in as yet. OK, as it seems that the Cypriot Government will do this deed tomorrow and the EU snaffles between 6.7 and 9.9% of all deposits. That is bad for deposit holders but................. On Tuesday when the banks open does anyone really think they will leave the other 90% in a Cypriot Bank?? I suspect there will be a huge run of capital out of Cyprus, especially the Russians who will move the 90% to Cayman Islands or any other tax haven and put it in US Dollars. That is estimated at €30 billion. This in turn will lead to even more problems for the Cypriots who will need a further bail out. Of course the Cypriot Government will have to impose currency restrictions, all very free market EU'ing I don't think. Plus citizens of any other EU country where things do not look too rosy will be wondering whether it will happen to them so i suspect a lot of Spanish/Portugese/Italian capital will start flowing to Germany and Austria, even more than it is already. Do the citizens of the EU really believe Brussels when the eurocrats state this is a one off??? would you?? All this chaos and uncertainty just so the idiots in Brussels can raise €6 billion and see a flood of capital out. Talk about back of fag packet thinking. By the way it may be an idea to wait to buy euros for the holiday trips as there could be a run on the euro against the Pound, at least until Wednesday when Osborne screws it all up yet again. Link to comment Share on other sites More sharing options...
Guest pelmetman Posted March 17, 2013 Share Posted March 17, 2013 EU......straw....... camels back..........comes to mind ;-)..................with a bit of luck >:-) The money markets reaction on Monday should be interesting :D Link to comment Share on other sites More sharing options...
malc d Posted March 17, 2013 Share Posted March 17, 2013 pelmetman - 2013-03-17 1:50 PM EU......straw....... camels back..........comes to mind ;-)..................with a bit of luck >:-) The money markets reaction on Monday should be interesting :D I really don't understand why people want to see the Eurozone fail. If it does it will be the " man in the street " who lives there that suffers for it - not the politicians / bureaucrats that cause it. :-( Link to comment Share on other sites More sharing options...
Guest 1footinthegrave Posted March 17, 2013 Share Posted March 17, 2013 I can only imagine many Europeans stuck with the euro, will start withdrawing their cash ASAP, and put their cash into gold, or other invest-able items, if the EU can do this once, they could do it again to any country. I personally think history will show this whole project has been in it's death throes for the last few years, only self serving politicians are keeping it going. ;-) If I was a gambling man, I'd lay odds that the whole thing will collapse in the next few months, or even weeks. As for the man in the street suffering, is it not true that it is happening right now ? Link to comment Share on other sites More sharing options...
nowtelse2do Posted March 17, 2013 Share Posted March 17, 2013 In most cases it was the man in the street who voted for their government who then voted to join the EU who then voted to join the eurozone. Cyprus, another none net contributor to the EU hoping for something for nothing. Dave Link to comment Share on other sites More sharing options...
Guest JudgeMental Posted March 17, 2013 Share Posted March 17, 2013 I imported a few vehicles from there is the good old days..bet they are regretting the euro now..Greece next? that would mean war I would think Link to comment Share on other sites More sharing options...
Dave225 Posted March 17, 2013 Share Posted March 17, 2013 Do not believe the euro will collapse but it may shrink back to the core countries with a few others sitting on the edge. If it did collapse then it would be very bad for us, regardless of your poltics, our best hope is a solution of sorts. The Cypriots, like others played the game for al it was worth but now are facing the consequences. However, that means bad news for all the Brits out there and I for one do not wish them harm, as they have at least been supporting Cyprus. Plus, if they all come home then it is bad news for us. As Laurel used to say "another fine mess you have got me into" Link to comment Share on other sites More sharing options...
Guest pelmetman Posted March 17, 2013 Share Posted March 17, 2013 Dave225 - 2013-03-17 3:31 PM Plus, if they all come home then it is bad news for us. Its alright ;-)................they won't be able to access the NHS they're not foreigners :D Link to comment Share on other sites More sharing options...
Guest 1footinthegrave Posted March 17, 2013 Share Posted March 17, 2013 For the life of me I've never understood how such differing countries could have a single currency without something giving sooner or later. Now let me think about, what have I ever bought that said made in Cyprus / Greece / Portugal, Bulgaria, some olive oil, a drop of Port and that's about it. Isn't the truth about the whole project that just like the average UK politician trying to deal with the economics of the UK, that nobody really has a clue how any of it works or what to do. ? I think it will shrink to a core country..............Germany. :D Link to comment Share on other sites More sharing options...
nowtelse2do Posted March 17, 2013 Share Posted March 17, 2013 1footinthegrave - 2013-03-17 4:06 PM I think it will shrink to a core country..............Germany. :D And this core country Germany, will it have in it's boundary's Austria, Belgium, Netherlands, Hungary, Latvia, Estonia, etc. etc. Dave Link to comment Share on other sites More sharing options...
Guest 1footinthegrave Posted March 17, 2013 Share Posted March 17, 2013 nowtelse2do - 2013-03-17 4:29 PM 1footinthegrave - 2013-03-17 4:06 PM I think it will shrink to a core country..............Germany. :D And this core country Germany, will it have in it's boundary's Austria, Belgium, Netherlands, Hungary, Latvia, Estonia, etc. etc. Dave Isn't that what they were after in 1939 :D Link to comment Share on other sites More sharing options...
nowtelse2do Posted March 17, 2013 Share Posted March 17, 2013 1footinthegrave - 2013-03-17 4:32 PM nowtelse2do - 2013-03-17 4:29 PM 1footinthegrave - 2013-03-17 4:06 PM I think it will shrink to a core country..............Germany. :D And this core country Germany, will it have in it's boundary's Austria, Belgium, Netherlands, Hungary, Latvia, Estonia, etc. etc. Dave Isn't that what they were after in 1939 :D Unfortunately......still are by the looks of it *-) Dave Link to comment Share on other sites More sharing options...
Guest JudgeMental Posted March 17, 2013 Share Posted March 17, 2013 at one time there where more Mitsubishi 4x4 coming into this country from Cyprus then from the the UK importer, and it served the greedy sods right :-D Link to comment Share on other sites More sharing options...
Guest pelmetman Posted March 17, 2013 Share Posted March 17, 2013 1footinthegrave - 2013-03-17 4:32 PM nowtelse2do - 2013-03-17 4:29 PM 1footinthegrave - 2013-03-17 4:06 PM I think it will shrink to a core country..............Germany. :D And this core country Germany, will it have in it's boundary's Austria, Belgium, Netherlands, Hungary, Latvia, Estonia, etc. etc. Dave Isn't that what they were after in 1939 :D Yep 8-).................. Even though large tracts of Europe and many old and famous States have fallen or may fall into the grip of the Germany and all the odious apparatus of EU........... 8-) We shall defend our island..................We shall fight them in the ballot boxes.............We will fight them in the EU............We will never NEVER surrender.........to subjugation >:-)....... Signed Winston Pelmetman :D Link to comment Share on other sites More sharing options...
nowtelse2do Posted March 17, 2013 Share Posted March 17, 2013 And we will fight them on the beach's when there's a shortage of deckchairs :-D Dave Link to comment Share on other sites More sharing options...
nowtelse2do Posted March 17, 2013 Share Posted March 17, 2013 Not done and dusted yet, the deal has to go before the Cypriot parliament (and the German one too 8-) ) to be approved and it could be close. Trouble is that the seed as been sown so a lot of distrust is brewing, understandable I think. Dave Link to comment Share on other sites More sharing options...
CliveH Posted March 17, 2013 Share Posted March 17, 2013 The germans also know that with a major German election later this year (and it looks as tho the germans could vote in a less rabid pro Euro Chancellor than Merkel) an agreement set up now could well hit problems later on. Hence the indecent haste to get Cyprus stitched up / "sorted" well in advance. Link to comment Share on other sites More sharing options...
Mel B Posted March 17, 2013 Share Posted March 17, 2013 Dave225 - 2013-03-17 3:31 PM As Laurel used to say "another fine mess you have got me into" It was actually Oliver Hardy who said it to Stan Laurel who would then usually scratch his head and Hardy would bash him with his bowler hat! :D Link to comment Share on other sites More sharing options...
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