A poisonous cloud containing a potentially cancer-causing chemical was accidentally released over Frankfurt on Tuesday, with residents of two districts warned to stay indoors throughout the afternoon. The cloud of nitrobenzene escaped after an accident at a chemical plant belonging to the firm Clariant in an industrial park near the Hochst district of the city. The leak was only stopped after half an hour, a spokesman for the Frankfurt fire brigade said, adding that measurements outside the park suggested there were no immediate health risks. Nevertheless, a spokesman for the industrial park operator Infraserv said the cloud drifted over the Hochst and Unterliederbach districts, where residents were told to stay at home and keep doors and windows shut during the afternoon. Police also closed off the centre of Hochst and shut down a local railway station. Many people in the area were seen holding their hands or cloth in front of their mouths. The all-clear was only given in the early evening. Nitrobenzene, a substance used in the production of car paint, is considered highly dangerous if breathed in or swallowed, and can easily be absorbed through the skin. It is also considered carcinogenic and prolonged exposure can damage the liver, lungs, and central nervous system. Both the cause of the accident and the exact quantity of the chemical released were not initially revealed, though the Infraserv spokesman spoke of a “small amount.” The fire brigade sprayed water onto the chemical in an attempt to contain the leak.
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Toxic chemical cloud drifts over Frankfurt
Published: 15 May 13 11:12 CET
A poisonous cloud containing a potentially cancer-causing chemical was accidentally released over Frankfurt on Tuesday, with residents of two districts warned to stay indoors throughout the afternoon.
The cloud of nitrobenzene escaped after an accident at a chemical plant belonging to the firm Clariant in an industrial park near the Höchst district of the city.
The leak was only stopped after half an hour, a spokesman for the Frankfurt fire brigade said, adding that measurements outside the park suggested there were no immediate health risks.
Nevertheless, a spokesman for the industrial park operator Infraserv said the cloud drifted over the Höchst and Unterliederbach districts, where residents were told to stay at home and keep doors and windows shut during the afternoon. Police also closed off the centre of Höchst and shut down a local railway station. Many people in the area were seen holding their hands or cloth in front of their mouths.
The all-clear was only given in the early evening.
Volunteers have pulled 25 tonnes of dead carp out of a lake in eastern Germany – there are so many, locals are running out of boats. Regional officials have admitted they are baffled – only carp seem to be dying in the lake.
Dead silver carp started being found floating belly up on the surface of the Heyda lake, Thuringia, in mid-April. Since then, volunteers have scooped 25 tonnes of cadavers from the water, which is near the town of Ilmenau south of Erfurt.
On Saturday alone volunteers largely from the local angling club filled an 18,000-litre container more than half way, Der Spiegel magazine said. Helpers told the magazine that they expected the amount to double.
Tests performed on the fish showed no sign of bacteria or infection and no other fish have been found – just relatively mature silver carp, many of which had already started rotting.
This has left both town residents and experts baffled. A spokesman for the Ilm area administration, Eckhard Bauerschmidt, told The Local the council had been flooded with calls asking about the mass deaths, but they were still in the dark as to the cause.
A common killer of fish is poisonous algae, and although there are no obvious signs of deadly plant life, the head of the district authority has ordered that the water be tested every day to monitor any changes.
By Agence France-Presse
Friday, May 3, 2013 18:15 EDT
Three new cases of a new SARS-like virus have been detected in Saudi Arabia, the World Health Organisation reported Friday.
“The Ministry of Health in Saudi Arabia has informed WHO of an additional three laboratory confirmed cases of infection with the novel coronavirus (nCoV),” the UN body said in a statement.
“They are currently in critical condition,” it added.
The organisation said the latest report brought to 27 the global total of laboratory confirmed cases, including 16 deaths.
The virus was first detected in mid-2012 and is a cousin of Severe Acute Respiratory Syndrome (SARS), which triggered a scare 10 years ago when it erupted in east Asia, leaping to humans from animal hosts.
File picture shows a lab technician testing blood samples. Five Saudis have died of a new SARS-like virus during the past few days and two more are being treated in an intensive care unit, the health ministry said.
AFP – Five Saudis have died of a new SARS-like virus during the past few days and two more are being treated in an intensive care unit, the health ministry said.
In a statement cited by the Saudi SPA agency late on Wednesday, the ministry said that all the deaths occurred in the Ahsaa province in the oil-rich eastern region of the kingdom.
Known as novel coronavirus or hCoV-EMC, the virus was first detected in mid-2012 and is a cousin of Severe Acute Respiratory Syndrome (SARS), which triggered a scare 10 years ago when it erupted in east Asia, leaping to humans from animal hosts.
The health ministry said it is taking “all precautionary measures for persons who have been in contact with the infected people… and has taken samples from them to examine if they are infected.”
However, the ministry gave no figures for how many people have been examined to see if they have the lethal disease.
Sixteen people have now died from 23 cases detected in Saudi Arabia, Jordan, Germany and Britain. Riyadh has accounted for most of the deaths, with 11 people including the five new fatalities.
Berlin – Chancellor Angela Merkel has said there is no German hegemony in Europe, but insisted that euro countries cede more sovereignty to overcome the crisis.
“To me this hegemonial [concept] is completely foreign,” she said on Monday (22 April) during a debate with Polish Prime Minister Donald Tusk hosted by the Deutsche Bank in Berlin.
Merkel admitted that Germany has “sometimes a complicated role” in the EU and said that as a large, “but not the richest country,” it seeks to involve other states – like Poland – in the decision making process.
Having witnessed the collapse of East Germany under the Soviet Union, which ran the country’s economy into the ground, Merkel said she did not want the EU to fall apart too.
But the she rejected criticism voiced particularly in southern countries which suffer most from what is perceived to be a German-led austerity drive.
Biological Hazard in Germany on Sunday, 21 April, 2013 at 15:44 (03:44 PM) UTC.
Description
A mild form of bird flu has broken out in Lower Saxony. Avian influenza virus subtype H7 has been detected in 2 turkey farms in the district of Osnaburg. This was confirmed by the Ministry of Agriculture on Thu 18 Apr 2013. All 27 000 turkeys in these f arms must now be culled. There should not be human health risk by this mild form of avian flu.
Biohazard name:
H7, LPAI
Biohazard level:
1/4 Low
Biohazard desc.:
Bacteria and viruses including Bacillus subtilis, canine hepatitis, Escherichia coli, varicella (chicken pox), as well as some cell cultures and non-infectious bacteria. At this level precautions against the biohazardous materials in question are minimal, most likely involving gloves and some sort of facial protection. Usually, contaminated materials are left in open (but separately indicated) waste receptacles. Decontamination procedures for this level are similar in most respects to modern precautions against everyday viruses (i.e.: washing one’s hands with anti-bacterial soap, washing all exposed surfaces of the lab with disinfectants, etc). In a lab environment, all materials used for cell and/or bacteria cultures are decontaminated via autoclave.
Mario Draghi, president of the European Central Bank: his analysis of the euzozone crisis is flawed, argues Andrew Watt. Photograph: Lisi Niesner/Reuters
Over the course of the last week’s tense negotiations over a Cyprus bailout deal, much of the commentary has focused on the role of Europe’s finance ministers. But perhaps closer attention should be paid to Mario Draghi, the president of the European Central Bank. On 14 March Draghi made a presentation to heads of state and government on the economic situation in the euro area. His intent was to show the real reasons for the crisis and the counter-measures needed. In this he succeeded – although not in the way he intended.
Draghi presented two graphs that encapsulate his central argument: productivity growth in the surplus countries (Austria, Belgium, Germany, Luxembourg, Netherlands) was higher than in the deficit countries (France, Greece, Ireland, Italy, Portugal, Spain). But wage growth was much faster in the latter group. Structural reforms and wage moderation lead to success; structural rigidities and greedy trade unions lead to failure. QED.
According to the Frankfurter Allgemeine Zeitung, which reported the affair approvingly, the impact of Draghi’s intervention was devastating. François Hollande, the French president, who had earlier been calling for an end to austerity and for growth impulses, was, according to the newspaper, completely silenced after the ECB president had so clearly demonstrated, with incontrovertible evidence, what was wrong in Europe – or rather in certain countries in the eurozone – and what must be done.
Things are not as they seem, however. Draghi’s presentation contains a simple but fatal error – or should that be misrepresentation? As the note to the graphs indicates, the productivity measure is expressed in real terms. In other words, it shows how much more output an average worker produced in 2012 compared with 2000. So far so good. However, the wage measure that he uses, compensation per employee, is expressed in nominal terms (even if, interestingly, this is not expressly indicated on the slides). In other words, the productivity measure includes inflation, but the wage measure does not.
Cyprus Salvaged After EU Deal Shuts Bank to Get $13B
By Rebecca Christie, James G. Neuger & Patrick Donahue – Mar 25, 2013 10:24 AM CT
Cyprus dodged a disorderly sovereign default and unprecedented exit from the euro by bowing to demands from creditors to shrink its banking system in exchange for 10 billion euros ($13 billion) of aid.
Cypriot President Nicos Anastasiades agreed to shut the country’s second-largest bank under pressure from a German-led bloc in an overnight negotiating melodrama that threatened to rekindle the European debt crisis and rattle markets.
“It’s been yet another hard day’s night,” European Union Economic and Monetary Affairs Commissioner Olli Rehn told reporters in Brussels early today. “There were no optimal solutions available, only hard choices.”
It was the second time in nine days that Cyprus struck a deal with its euro partners and the International Monetary Fund, capping a tumultuous week that underscored the contradictions of euro-crisis management that has dominated European policy making for more than three years. Cyprus, the euro area’s third- smallest economy, is the fifth country to tap international aid since the crisis broke out in Greece in 2009.
The first Cypriot accord, reached March 16, fell apart three days later when the parliament in Nicosia rejected a key plank, a tax on all bank accounts that sparked the indignation of smaller depositors. Efforts to win an alternative bailout from Russia, which loaned Cyprus 2.5 billion euros in 2011 when the nation was shut out of international markets, failed.
‘Playing Games’
“Nobody knows where we are heading,” said Epifanos Epifaniou, 50, who used to drive a delivery truck in Nicosia and has been unemployed for six months. “People are playing games with Cyprus. We are alone. Nobody is supporting us.”
The euro retreated 0.4 percent, trading at $1.2935 at 2:33 p.m. in Frankfurt, after initially rising as much as 0.5 percent. Stocks gained, with the Stoxx Europe 600 Index rising 0.5 percent. Italian 10-year bonds erased their decline since last month’s inconclusive election.
German Chancellor Angela Merkel lauded the agreement as lawmakers in her coalition embraced the package, which should go to a vote in Berlin in the coming weeks. The agreement goes a “long way” toward satisfying Germany’s Bundestag, Christian Democratic lawmaker Norbert Barthle said in an interview.
Bartering
The breakthrough came after Anastasiades bartered with officials including EU President Herman Van Rompuy, European Central Bank President Mario Draghi and IMF Managing Director Christine Lagarde. It was then sealed by the finance ministers, some of whom went out to dinner while the talks were ongoing.
With the ECB threatening to cut off emergency financing for tottering banks as soon as today, Cyprus’s leaders engineered another way of shrinking the island’s financial system.
The revised accord spares bank accounts below the insured limit of 100,000 euros. It imposes losses that two EU officials said would be no more than 40 percent on uninsured depositors at Bank of Cyprus Plc, the largest bank, which will take over the viable assets of Cyprus Popular Bank Pcl (CPB), the second biggest.
Cyprus Popular Bank, 84 percent owned by the government, will be wound down. Those who will be largely wiped out include uninsured depositors and bondholders, including senior creditors. Senior bondholders will also contribute to the recapitalization of Bank of Cyprus.
Debt Doubts
The squeezed banking industry will likely lead to a “sharp drop” in Cyprus’s gross domestic product this year and next, according to Reinhard Cluse, a London-based economist at UBS AG. As a result, the euro group’s debt-to-GDP ratio target of 100 percent by 2020 “must be doubted,” he said.
The Cypriot Finance Ministry said in a January presentation that bailing out the country may push debt to a peak of about 140 percent of GDP next year.
“Cyprus’s sovereign debt problems will remain an issue of concern — for European policy makers and for the markets,” Cluse wrote in a note to clients today.
Banks in Cyprus, which have been shut for the past week, will remain closed until further notice. Lawmakers in Cyprus voted last week to impose capital controls to prevent a run on deposits when they reopen.
The union representing Cypriot banking workers said today the Mediterranean island is faced with a “painful compromise,” according to a statement posted on its website. It urged employees to be ready to return to work when banks reopen.
Better Solution
“This solution we reached tonight doesn’t have the downsides that the solution of last week did,” said Dutch Finance Minister Jeroen Dijsselbloem, chairman of the euro ministers’ panel. He said the deal was beyond the range of “political possibilities” a week ago.
The Cypriot parliament won’t have to vote again because it has already passed laws on bank restructuring, officials said. On the creditors’ side, legislatures in Germany, Finland and the Netherlands may hold votes to approve loans to Cyprus from the European Stability Mechanism, the 500 billion-euro rescue fund.
Klaus Regling, managing director of the rescue fund, said approval by creditor governments in mid-April will pave the way for the first payouts to Cyprus in early May.
Lagarde said she will recommend that the IMF provide loans, without giving a figure. “There might have been a bit of friction here and there,” she said of the talks.
Solvent Banks
The next step lies with the ECB, which needs to keep funds flowing to solvent Cypriot banks to enable them to open. While Draghi and Executive Board member Joerg Asmussen left Brussels without commenting to reporters, a statement by the ministers said the bank will channel liquidity to Bank of Cyprus “in line with applicable rules.”
The seizure of larger deposits may spark tensions with Russia, the source of an estimated $31 billion in holdings in Cypriot banks according to Moody’s Investors Service. A Cypriot mission to Moscow last week failed to yield an alternative to the European-sponsored bailout.
Still, Russian President Vladimir Putin ordered his government to discuss restructuring a 2011 loan to Cyprus, Russian news service RIA Novosti cited a spokesman as saying.
The effort to go after insured deposits, while abandoned, may have harmful repercussions, said Moody’s in a note early today. “Policy makers’ recent decisions raise the risk of deposit outflows, capital flight, increased bank and sovereign funding costs and broader financial-market dislocation throughout the euro area in the future,” Moody’s said.
Nine Months
In a replay of tensions over aid for Greece at the outset of the crisis, European governments had wrangled over aid for Cyprus for nine months, exposing holes in the revamped economic management system that was built in three years of emergency policymaking, often at all-night summits.
A tightening of Europe’s budget-deficit restrictions and new rules to penalize countries with unbalanced economies or asset bubbles failed to stop the rot in Cyprus, which makes up less than 0.2 percent of euro-region output.
Hundreds of protesters massed outside the floodlit presidential palace in Nicosia late yesterday, one group brandishing a banner that said: “It’s capitalism, stupid.”
Protesters during an anti- bailout rally in Nicosia, Cyprus, on March 24, 2013. Photographer: Petros Karadjias/AP Photo
0:17
March 25 (Bloomberg) — International Monetary Fund Managing Director Christine Lagarde says the so-called troika of the European Central Bank, European Commission and IMF is “doing fine” when asked by reporters about its future backing of bailouts. She spoke earlier today alongside Olli Rehn in Brussels following an emergency meeting of euro-area finance ministers, who agreed to a 10 billion-euro ($13 billion) bailout for Cyprus. (Source: Bloomberg)
March 22 (Bloomberg) — Bloomberg Television’s Ryan Chilcote reports on how the Russian population living and banking in Cyprus could be affected by the current crisis. He speaks from Limassol, Cyprus, on Bloomberg’s “The Pulse.” (Source: Bloomberg)
1:35
March 25 (Bloomberg) — As Cyprus dodges a disorderly default and unprecedented exit from the euro currency by winning a 10 billion-euro ($13 billion) bailout, Cypriots are finding cash hard to come by. Bloomberg Television’s Ryan Chilcote reports from Nicosia. (Source: Bloomberg)
9:21
March 25 (Bloomberg) — Christopher Pissarides, the head of Cyprus’s economic policy council, talks about the island nation’s bailout package and the outlook for its future membership of the euro zone. He speaks from Nicosia with Guy Johnson and Francine Lacqua on Bloomberg Television’s “The Pulse.” (Source: Bloomberg)
6:36
March 25 (Bloomberg) — Stelios Platis, managing director of MAP S.Platis, talks about Cyprus’s deal with the European Union to shrink its banking system in exchange for a 10 billion-euro ($13 billion) bailout. He speaks from Cyprus on Bloomberg Television’s “Countdown.” (Source: Bloomberg)
4:49
March 25 (Bloomberg) — Nicholas Papadopoulos, Cypriot lawmaker and chairman of the parliamentary finance committee, discusses the consequences of the nation’s 10 billion-euro ($13 billion) bailout. He speaks in Nicosia with Ryan Chilcote on Bloomberg Television’s “The Pulse.” (Source: Bloomberg)
4:48
March 26 (Bloomberg) — Philippe D’Arvisenet, chief global economist at BNP Paribas SA, talks about Europe’s sovereign debt crisis and the outlook for the euro. Cyprus dodged a disorderly sovereign default and unprecedented exit from the euro by bowing to demands from creditors to shrink its banking system in exchange for 10 billion euros ($13 billion) of aid. D’Arvisenet speaks in Singapore with Haslinda Amin on Bloomberg Television’s “On the Move.” (Source: Bloomberg)
Jeroen Dijsselbloem, the Netherlands’s finance minister and president of the Eurogroup, center, speaks as Christine Lagarde, managing director of the International Monetary Fund, left, and Olli Rehn, economic and monetary affairs commissioner for the European Union, listen during a news conference following the Eurogroup meeting in Brussels on March 25, 2013. Photographer: Jock Fistick/Bloomberg
Cyprus Popular Bank, 84 percent owned by the government, will be wound down. Photographer: Simon Dawson/Bloomberg
The revised accord spares bank accounts below the insured limit of 100,000 euros. It imposes losses that two EU officials said would be no more than 40 percent on uninsured depositors at Bank of Cyprus Plc, the largest bank, which will take over the viable assets of Cyprus Popular Bank Pcl, the second biggest. Photographer: Simon Dawson/Bloomberg
Is it just me or does anyone else see the Sadistic Farce that is being perpetrated upon the American People? So many are ignorantly falling for these mind games.
Yes, Newton was a tragedy and 27 lives were lost and yes we should call for a better way of protecting innocents. However, it has been brought to light at naseum that no matter how many laws are passed only those who obey the law will follow it’s mandates. The criminals , those outside the law will continue to do just as they have done all along. Breaking the law and taking innocent lives.
Is that to rational a thought for the knee jerk response crowd to handle? Then how about this kind of rationale ? Those criminals by the very act of being criminal could care less what the law says is legal. Perhaps if those who are in charge of enforcing the laws would work harder to make sure the lawbreakers are reigned in and that the laws already on the books are adhered to . We would go quite a bit further than by creating more laws and regulations that will serve only to strangle the law abiding citizen. While doing absolutely nothing to address the amount of illegal guns already on the streets. Some of which may very well have been provided by the very same law enforcement agencies claiming to prevent it. Is that such a crazy thought?
And just who in the hell does he think he is to offer such sanctimonious judgements on anyone? Obama and his Administration have forgotten a tragedy far worse than Newton. How many of those who are calling for these ridiculous measures have also forgotten? Conveniently forgotten so they have no remorse over following the man who has not only given aid and assistance but weaponry and the power to kill more innocent victims to the criminals who perpetrated this tragedy on American Soil. The very same entities that were used to justify the invasion of a sovereign country and an endless War on Terror. The hypocrisy has gone on long enough and people have forgotten the truth. It is time they wake up and understand one thing. ANYONE that gives aid to the organization known as Al Qaeda is not only guilty of Terrorism, but of murder and any American by association is guilty of Treason!!
Any American who forgets September 11th and the over 3000 lives lost that day or the fact that the government claimed that it was Al Qaeda who committed the crime. Anyone who goes along with what is being done around the world in the name of democracy by putting money and weaponry in the hands of these murderers is a Traitor, not only to their Country but to humanity.
Are you going to allow this hypocritical doublespeak to continue ?
Before you say to yourself , that you are innocent of the crimes being perpetrated by your government ……Understand that with your silence you are complicit with their crimes of murder and terror.
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All that is necessary for evilto succeed is for good men/women to do nothing
~ Edmund Burke~
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It is time for rational thinking and goodness to speak up against the evil and crimes that are being perpetrated not only at home but abroad. The time has come to stand up and be counted. No more of this “Do as I say and not as I do” garbage. It is time for the criminals to be held accountable. Time for their enablers to be called to task. Time for us to reclaim our Republic….. The time has come!!!
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“When bad men combine, the good must associate; else they will fall one by one, an unpitied sacrifice in a contemptible struggle.”
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“Public life is a situation of power and energy; he trespasses against his duty who sleeps upon his watch, as well as he that goes over to the enemy.”
~Edmund Burke~
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Do not fool yourselves, if you quietly support the criminals who commit these crimes then you are as responsible as if you pulled the trigger or dropped the bomb yourself. Understand that and know that when all is said and done you will be held accountable for your crimes!
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Those who would give up Essential Liberty
to purchase a little Temporary Safety,
deserve neither Liberty nor Safety.
~Thomas Jefferson~
restore the republic
Uploaded on Dec 16, 2007
Must see on the political warnings of past presidents and how the current administration is doing things, according to the warnings.
Ron Paul did not win but the ideals which he stood for and still stands to defend are those that would empower us as Sovereign Citizens of This Republic, Our home. Ignorance is no longer a viable excuse. Our immobilizing fear only brings death to those in other Nations and to us here on American soil. When will you stand up and be counted for the cause of Liberty and Justice for All? Following the lies will not get you there. Only the truth will do that.
President Barack Obama on Thursday sternly rebuked opponents of pending gun control measures, accusing them of “running out the clock” and hoping that the nation forgets last year’s Newtown school shooting in order to keep popular reforms from passing into law.
“The entire country was shocked, and the entire country pledged we would do something about it and that that this time would be different,” the president said of the gun massacre that killed 20 children and six adults. “Shame on us if we’ve forgotten.”
Flanked by Vice President Joe Biden and a group of mothers who have lost their children to gun violence, Obama accused gun rights groups of rooting for amnesia.
President Barack Obama delivers remarks Thursday at the White House regarding gun reform in America.
“The reason we’re talking about it here today is because it’s not done until it’s done,” he said. “And there are some powerful voices on the other side that are interested in running out the clock or changing the subject or drowning out the majority of the American people to prevent any of these reforms from happening at all. They’re doing everything they can to make all our progress collapse under the weight of fear and frustration or their assumption is that people will just forget about it.”
Obama’s remarks came on the same day that authorities released new information about Newtown shooter Adam Lanza, including the list of guns and ammunition that he stockpiled for the attack. Lanza fired 154 bullets from a Bushmaster .223 caliber model XM15 rifle, the documents said.
Citing poll numbers that show broad support – as high as 90 percent in some polls — for universal background checks, the president urged voters to “make yourself unmistakenly heard” to members of Congress in the days before the Senate takes up gun legislation next month.
“I ask every American to find out where your member of Congress stands on these ideas,” he said. “If they’re not part of that 90% who agree that we should make it harder for a criminal or somebody with a severe mental illness to buy a gun, then you should ask them why not.”
The legislation working its way through the Senate has hit numerous snags, with the threat of a filibuster now looming from lawmakers who say the president’s framework would restrict Second Amendment rights.
Different faces but the same old story is being replayed in a small part of the Euro-zone, Cyprus, and that story is one of the Cypriot banking crime syndicate gambling with depositor funds on the debt markets, this time it’s Greek bonds, yes, these master-eds of the universe used depositor funds to pile into soon to go bankrupt Greece because of the high yields they offered so that the bankster’s could bank bonuses on the basis of fictitious profits as illustrated by the fact that they have dumped an infinitely pile of losses (Greek Bond’s ) onto Cypriot tax payers, far beyond anything that any other Euro-zone member has had to face to date.
The Damage Has Been Done Expect a Bank Run
The emerging details early Monday morning in the face of a literally eye popping deadline are that of at least 40% of deposits over Euro 100k will be stolen in the two largest cypriot banks, one of them Laiki (2nd largest) will definitely be wound down, many mainstream commentators have jumped onto the fact that the depositors will receive shares in the banks which might be fine if the shares were given AFTER the banks were restructured i.e. bad assets being written down, but they are not instead the depositors are likely to be handed what amounts to worthless toilet paper in exchange for their hard cash.
The damage has been done, as the one thing that the banking system relies on has been destroyed and that thing is confidence. No depositor in Cyprus has any confidence in any cypriot bank and will try to transfer out of the Cyprus tax haven at the earliest possibility so there will be a bank run on cypriot banks the unfolding of which will be inline with the capital controls have been put in place.
The damage has been done to the Cypriot economy as its biggest industry the finance sector has been destroyed to result in huge job losses.
The damage has been done as all businesses have been impacted severely due to both many businesses having had their bank deposits stolen and for Cyprus having become a cash economy, where credit is scarce and not trusted by suppliers, so expect many non finance related business to go bust over the coming months.
The damage has been done to the reputation of Cyprus, where it is now seen as a high risk destination for tourists and investors for the reason of perceived instability, just as Greece’s tourist industry has suffered.
The damage has been done geopolitical as Turkey profits from this crisis as Northern Cyprus is not only stable, but like the mainland is prospering. Also there is the potential for conflict with the suggested sale of Natural gas deposits around Cyprus as they effectively belong to both North and South Cyprus, whilst this does not mean a military conflict it will make investors more reluctant to enter a potential conflict zone given the flammable nature of natural gas.
Why Should Germany Bailout the Cyprus Tax Haven?
As ever the blame is being leveled at Germany for German tax payers not digging deeper into their pockets to bailout Cyprus as illustrated by the Cypriot born Dragon’s Den star Theo Paphitis laying the blame at the Germans for not finding the extra Euro 6 billion rather face the truth that the Cypriot Bankster’s and the Cypriot politicians are WHOLLY responsible for the current crisis because this crisis has its roots in actions several years AFTER the 2008 financial crisis i.e. Cypriot bankster’s used depositor funds to gamble on Greek bonds and off course lost heavily which is why the banks went bankrupt.
Bank Holiday Financial Armageddon – The Path to Hyperinflation
Well over a year ago I attempted to map out how euro-zone financial armageddon might play out for the UK that would start with a Bank Holiday that would keep getting extended until the Government had worked out the mechanisms for stealing your savings. The big difference between the UK and euro-zone members is that the UK can and would print an unlimited amount of currency to prevent nominal loss to depositors Cyprus style, the consequences of which would be a collapse in sterling and resulting very high inflation whereas that option has not been available to the likes of Cyprus by virtue of having the Euro so it is forced to outright steal depositor funds.
What is Probably Likely to Happen IF the Euro-zone Collapses
I expect the UK government would nationalise the bankrupting banks either in part or full as they did with Northern Rock, Lloyds and HBOS, for if depositors in any significant number actually started to lose any of their deposits then that would result in a catastrophic loss of confidence in the UK financial system and spark runs on all banks.
My best minimum advice is to prepare for the worst rather than leave it to chance, because if the government is facing a bank rescue bill that runs in the trillions it may decide that the pain of closing the banking system for a few weeks (Extended Bank Holiday Month) is better than the implications of more than doubling the national debt which would make George Osbourne’s £140 billion annual deficit look like peanuts.
A closure of the banking system (Bank Holiday Month) will result in a huge drain on cash in the economy, therefore I suspect the Bank of England has already secretly prepared itself for this eventually by printing a huge quantity of actual bank notes by the container load, ready to ship out as soon as the crisis bites, which would be necessary to cover a closure of the banking system the effect of this would be highly inflationary, because printing actual bank notes is the same as that which happened during Weimar Germany sparking hyperinflation when people ended up buying loafs of bread with Wheel barrows full of worthless currency, this is what would happen, inflation would go through the roof, forget 5% per year, we would be at 5% per month! So a closure of the banking system would probably not be the worst of what could follow.
Similarly the Cyprus banks have been on a Bank holiday since 18th March that keeps getting extended with the latest news suggesting that they will re-open on Tuesday 26th March, though I wouldn’t bank on it, given that a bank run by frightened depositors is certain, they will likely remain closed for the whole of this week.
Meanwhile the ECB keeps shipping in cash to distribute at falling withdrawal limits from Euro 500 per day to 100 from today per account via ATM cash machines that tend to run dry within minutes of their daily refills.
THIS IS HIGHLY INFLATIONARY. As I have explained several times over the year that printing and distributing actual bank notes is the road to Hyper inflation because it sends the velocity of money through the roof as no one wants to hold onto money that is constantly losing its value. Whilst inflation can be contained in Cyprus due to its small economy, however Germany KNOWS from its own experience of what the contagion risks are if the same started to take place in larger Euro-zone nations that would require infinitely more bank notes to be printed in the event of banking crisis bank holidays, which most obviously points to Greece as being next. Therefore the ECB will likely enact severe cash withdrawal limits right across the euro-zone due to the inflationary consequences.
Whilst Cyprus dithers its away through the current crisis, this will however set a dangerous destabilising precedent in that bank deposits can no longer be deemed to be SAFE anywhere! for the fundamental reason that it is impossible for bankrupt states to guarantee anything! Let alone 100% of deposits. Instead at the crunch point they will seek to STEAL ALL OF YOUR WEALTH as I originally warned several years ago in the Inflation Mega-trend Ebook of Jan 2010 (FREE DOWNLOAD) (and earlier in articles), which is why people need to seek to protect their wealth by removing it from banks and parking it in assets that are less susceptible to the Inflation stealth theft such as property that I will seek to illustrate again later in this article.
Risk of Contagion
The risk is now of contagion of bank runs spreading across the euro-zone because the likes of Spanish Banks are STILL BANKRUPT! The People of SPAIN Understand this, they also now understand that they could be NEXT to have their savings stolen by a state that cannot guarantee anything! As one thing is virtually guaranteed that Cyprus is NOT the end of the story, for after the bailout of the cypriot banks within a few months another euro-zone countries banks will also explode in spectacular style, the warning signs of which will be made manifest in that nations bond markets.
Know this truth – NO BANK Holds Funds to even pay out 1/10th of Depositors!
What You Need to do to Protect Your Bank Deposits
I have been warning of the risk that the periphery sovereigns pose to the bank deposits for several years now and repeatedly suggested that all depositors in PIIGS banks should move funds out of periphery banks and into either hard assets or the likes of German bonds with detailed steps of what should be done as illustrated in this article – How to Protect Your Bank Deposits, Savings From Euro-zone Collapse Financial Armageddon
In which respect I enacted my emergency Financial Armageddon plan last week, where the focus was to move funds from high risk euro-zone banks to low risk wholly UK owned banks. Everything went smoothly apart form one transaction of early Friday afternoon for £16,000 which has gone awol! The transaction was supposed to leave Santander early Friday afternoon and arrive at a small UK private bank in about 2 hours time (Faster Payment service). Whilst logging in later in the afternoon I could see that the transaction had been marked as having left Santander but there was no sign of arrival of funds at the destination bank.
Now well over 60 hours later the funds have still not arrived, further more attempting to log into Santander since late Friday has resulted in the following maintenance message.
Whilst Santander states it is scheduled maintenance, however there was NO prior warning of maintenance nor does it explain the fact that funds that were supposed to take a couple of hours to arrive have still not arrived well over 48 hours later. I guess all will be revealed early Monday when either the opening shots of Financial Armageddon have been averted or not.
This illustrates the risks that the whole banking sector poses in that when it shuts down it will be in an instant, and then it will be too late to draw your funds out so you really need to act well before Financial Armageddon strikes. And certainly d not pay attention to any soothing words out of the Bank of England as illustrated by the fact that one of the last statements out of the central bank of Cyprus prior to freezing the banking system was that depositors money was safe in Cypriot banks.
The key message is stick to the depositor guarantee limits of Euro 100,000, £85,000 per banking licence.
UK Stealth Theft of Bank Deposits
For countries such as UK the theft has been by STEALTH by means of high inflation that equates to approx 14% STOLEN from UK savers over the past 4 years i.e. the amount that savers have lost after REAL Inflation (CPI+1.5%) and Taxes (20%) as savings interest rates have been artificially depressed by the Bank of England so as to funnel wealth into the bankrupt banks and monetize the governments large budget deficit. All Cyprus is doing is stealing directly from depositors because as being in the euro-zone it CANNOT PRINT MONEY AND INFLATE as the UK and US have been doing.
UK Budget Detonates its Latest Inflation Nukes
Forget all of the propaganda that spouts from politicians or its economic propaganda mouth piece the OBR. For the truth remains as I voiced right at the beginning that the coalition government would continue to increase debt, each and every year of the coalition government towards a target of £1.33 trillion by March 2015 which is set against coalition / OBR propaganda for paying down debt.
The German media and Saudi Arabia’s health ministry have reported two new novel coronavirus (NCoV) cases, one in a patient hospitalized in Munich and the other a mild illness in a Saudi Arabian resident. According to an early report today in German from Abendzeitung, a news source based in Munich, the German patient arrived in Germany from the Middle East by medical transport. It says the patient is in isolation in the intensive care unit (ICU) at Munich Municipal Hospital. The patient is a 73-year-old man from the United Arab Emirates who was first treated in an Abu Dhabi hospital on Mar 19, another German news source, TZ Online, reported today. It said medical authorities are monitoring about 50 people who had contact with the patient. The case appears to be Germany’s second NCoV case. In October a Qatari man was hospitalized and treated in Germany but has since recovered. The man’s NCoV infection wasn’t detected until almost a month after he was hospitalized, and so far no evidence of infection has been found in any of that case-patient’s German contacts.
Saudi Arabia’s health ministry said its new case is a contact of a 39-year-old man who died in early March from the disease in that country, according to a Mar 23 World Health Organization (WHO) statement. The patient had a mild illness, recovered, and has been discharged from the hospital. It said there isn’t enough information to allow a conclusive assessment of the mode and source of transmission. The WHO provided no other details about the patient’s NCoV infection. However, Ziad Al-Memish, undersecretary with the health ministry, said the patient is from Riyadh, Arab News, an English-language newspaper based in Jeddah, reported yesterday. He added that the ministry has taken prevention measures and is monitoring the disease. The latest infection in Saudi Arabia appears to represent yet another instance of a mild illness in a person who had contact with another infected patient. Though the disease has been fatal for many patients infected with NCoV, the emergence of mild cases has raised questions about surveillance for the disease and whether people with asymptomatic or mild disease could be playing a role in the spread of the virus.
In a related development, the index patient in a recent three-case British family cluster has died, according to a Mar 23 Birmingham Mail report. The man died at Wythenshawe Hospital in Manchester on Mar 19, and his body has been taken to Pakistan for burial. The 60-year-old man got sick at the end of January after traveling to Pakistan and Saudi Arabia and has remained hospitalized. The Saudi Arabian case pushes the number of WHO-confirmed NCoV cases to 16, and the UK death raises the fatality count to 10. That count does not include Germany’s new case.
Biohazard name:
NCoV (novel coronavirus)
Biohazard level:
4/4 Hazardous
Biohazard desc.:
Viruses and bacteria that cause severe to fatal disease in humans, and for which vaccines or other treatments are not available, such as Bolivian and Argentine hemorrhagic fevers, H5N1(bird flu), Dengue hemorrhagic fever, Marburg virus, Ebola virus, hantaviruses, Lassa fever, Crimean-Congo hemorrhagic fever, and other hemorrhagic or unidentified diseases. When dealing with biological hazards at this level the use of a Hazmat suit and a self-contained oxygen supply is mandatory. The entrance and exit of a Level Four biolab will contain multiple showers, a vacuum room, an ultraviolet light room, autonomous detection system, and other safety precautions designed to destroy all traces of the biohazard. Multiple airlocks are employed and are electronically secured to prevent both doors opening at the same time. All air and water service going to and coming from a Biosafety Level 4 (P4) lab will undergo similar decontamination procedures to eliminate the possibility of an accidental release.
Germany and The Central Bank are Pressuring Cyprus to steal from it’s citizens as and answer for fiscal irresponsibility. The Central Bank has ordered banks to block citizens access to their own personal accounts. Thereby barring access to their own money. I suppose they are biding their time making sure that people do not empty their accounts before the decision to allow them to steal the money is reached.
Since when is this kind of blatant theft not an unlawful act? Who do they EU and the Central Bank think they are to be coercing the government to commit this crime against it’s people?
Cyprus’s central bank has written to the island’s lenders to ask them to block customer’s transfers and payments, according to reports on the island.
Cypriot website 24h revealed on Sunday that the Central Bank of Cyprus wrote to Cypriot lenders on Saturday, March 16 to ask them to stop all form of payments from their accounts, even those that were from one account at the bank to another.
The measure comes after the Eurogroup asked Cyprus to impose a one-off tax on depositors as part of its bailout.
Kathimerini English Edition understands that the capital controls do not apply to the units of Cypriot banks in Greece. Normal restrictions on cash withdrawals and electronic transfers are in place.
The depositor tax will not apply to Cypriot bank units in Greece but the branches are set to be absored by a Greek lender by Tuesday.
The proposed levy had caused an outcry among many Cypriots
Germany’s finance minister has warned Cyprus that its crisis-stricken banks may never be able to reopen if it rejects the terms of a bailout.
Wolfgang Schaeuble said major Cypriot banks were “insolvent if there are no emergency funds”.
He was speaking after the Cypriot parliament rejected an international bailout deal that would have imposed a one-off tax on bank deposits.
Frantic talks are under way to try to agree an alternative plan.
Leaders of political parties in Cyprus are due to meet later after parliament rejected the controversial levy, proposed as part of a 10bn-euro (£8.7bn; $13bn) bailout package.
The BBC’s Mark Lowen, in Nicosia, says the country is in turmoil and the eurozone’s plan has completely unravelled,
Analysis
Mark Lowen BBC News, Nicosia
There may have been jubilation among many Cypriots at Tuesday night’s parliamentary defeat of the hated banking tax, but now the country faces a tough reality.
The EU bailout has been derailed and Cyprus is edging towards bankruptcy. But talks are also continuing with the EU to find a credible alternative.
The eurozone’s third smallest economy has just sent a resounding message of defiance to Brussels. And the impact will spread far beyond this tiny island.
Not a single MP voted in favour of the controversial deal, sending a clear message to Brussels that the strategy needs a drastic rethink, our correspondent adds.
Late on Tuesday, Mr Schaeuble said that he “regretted” the vote.
“The ECB (European Central Bank) has made it clear that without a reform programme for Cyprus the aid can’t continue. Someone has to explain this to the Cypriots and I think there’s a danger that they won’t be able to open the banks again at all,” he said.
“Two big Cypriot banks are insolvent if there are no emergency funds from the European Central Bank,” Mr Schaeuble added.
Cypriot President Nicos Anastasiades called the talks between party leaders when it became clear that the measure would not be passed by parliament.
Fearing a run on accounts, Cyprus has shut its banks until at least Thursday. The local stock exchange also remains closed.
Cyprus’ banks were badly exposed to Greece, which has itself been the recipient of two huge bailouts.
People line up at an ATM in Nicosia to withdraw cash on Thursday.
Patrick Baz/AFP/Getty Images
The clock is ticking on Cyprus’ fiscal cliff.
The European Central Bank has given the Mediterranean country just four days to come up with its own bailout plan, or a eurozone lifeline to its struggling banks will be severed.
The ultimatum comes after Cypriot lawmakers on Tuesday rejected a highly unpopular proposal put forward by the European Central bank, the European Commission and the International Monetary Fund to give the country’s banks half of a $13 billion bailout package if they can raise the other half from a steep levy on the country’s personal savings accounts.
Since then, the Cyprus government has been struggling to come up with a “Plan B” that will satisfy international lenders. If Cyprus can’t do it by Monday, the ECB will pull the plug on Cypriot banks, which would likely precipitate a collapse of the island’s financial institutions and send shock waves through European and world markets.
Update at 2:40 p.m. ET: Cyprus Bank To Be Restructured:
NPR’s Joanna Kakissis reports that the governor of Cyprus’ central bank, Panicos Demetriades, says country’s second largest bank, Cyprus Popular Bank, will be restructured to forestall its imminent collapse next week. Cyprus Popular Bank has placed a $336 (260 euro) limit on ATM withdrawals.
Our original post:
Kakissis, reporting from the Cypriot capital Nicosia, says the country’s banks were drained by exposure to the Greek debt crisis. But EU and IMF leaders see the island as a haven for offshore investment, especially by wealthy Russians, and want depositors to pay for part of a bailout.
Banks have been closed until Tuesday to prevent a bank run, but ATMs have been restocked so people can withdraw money, Kakissis says.
The Parliament in Cyprus could vote on a plan to raise the $7.5 billion as early as Thursday
Of course people will protest. They have closed the banks and block access to their money. I would dare say it is a very logical reaction to being robbed,wouldn’t you ?
And yet it is typical of this type of strong arm tactic for the victim to be treated as the criminal,while the criminal is protected. Truly ironic is it not ?
Demonstrators outside the House of Representatives yesterday wearing Angela Merkel masks
AROUND 1,000 people gathered outside Parliament yesterday despite a vote on the proposed haircut being postponed until today at 6pm.
Around half of the protesters dispersed quite quickly after receiving news that the vote had been put back, planning on regrouping outside the House today.
“I’m here for the same reason as everyone else to protest the bill and we will come tomorrow and the next day if required,” 56-year-old insurance salesman Lambros Kannaouros said.
“The decision to make the people pay is unfair,” he added.
Petros Heracleous a 26-year-old unemployed protester believed that attempts to restructure the haircut were pre-planned to make the people think that the politicians were trying to change something. “We prefer to keep our pride instead of suffering the repercussions of a haircut,” he said.
Forty-year-old telecommunications regulator, Yiannos Demetriou felt that a haircut would go against human rights and against the Cyprus constitution. “They are trying to take advantage of us so they can take our natural gas and impose a solution to the Cyprus problem that will suit foreign powers,” he said. “If Anastasiades is assuming the political cost of the haircut then he should call for a referendum or even call a general election,” he added.
Cyprus finance minister Michalis Saris arrives to meet his Russian counterpart in Moscow. Photo:
Banks in Cyprus are to remain closed on Thursday and Friday, the government has said, amid continuing uncertainty over an EU bailout that required a 10 per cent tax on savings.
President Nicos Anastasiades will chair a meeting with the parliamentary party leaders tomorrow at 9.30am at the Presidential Palace.
Russian Prime Minister Dmitry Medvedev has criticised the EU and Cyprus’ handling of the country’s ongoing economic crisis, saying they are acting “like a bull in a china shop”, the state-run news agency RIA Novosti reported.
Meanwhile, Prime Minister David Cameron has reaffirmed that any British military or government personnel in Cyprus would not lose their savings due to the crisis.
Local news in Cyprus is reporting an escalation in the protests that have begun in the wake of attempts by EU chiefs to confiscate the savings of depositors. The news of possible bank closures has enraged the public. It appears that in order to keep things under control, the Central Bank is discussing a possible bank merger rather than a full shut down.
The Central Bank of Cyprus today intervened to quash frantic reports that Cyprus Popular Bank is to be closed down.
The reports sent hundreds of Cyprus Popular Bank employees and holders of the bank’s bonds out into the streets. Police deployed a strong force outside the Bank’s headquarters in the capital Nicosia to prevent them smashing into the building. (Source)
Here is a video showing police in riot gear on the scene:
Cyprus Broadcasting Corporation says the following:
The European Central Bank today said it had decided to allow the Central Bank of Cyprus to keep providing banks with emergency funding until this coming Monday.
An ECB statement said that thereafter, Emergency Liquidity Assistance can only be considered if a rescue programme is in place that would ensure the solvency of the banks involved. (Source)
Meanwhile, President Anastasiades supposedly has a Plan B ready:
Cyprus’s political leadership today decided on a package of measures dubbed “plan B” to avert a financial meltdown, as the finance minister is engaged in rescue talks with Russian officials in Moscow….
No details of the plan were immediately announced, but Averof Neophytou, a close associate of President Nicos Anastasiades said that there had been a unanimous decision to establish a “Solidarity Fund”. (Source)
Recent photos of the protests were posted at ZeroHedge, which you can see HERE. One protester can be seen holding a sign that says, “Where is the solidarity?”
We’ll keep you posted as this develops. Previous updates and videos can be found below…
ATMs in Cyprus were drained over the weekend, electronic transfers were halted, and riots ensued following a decision by European Union chiefs to raid private savings accounts to help pay for the country’s $13 billion bailout. It was believed that there were plans to stretch a bank holiday to at least one week, while the exact measures were decided upon. However, yesterday the Cypriot parliament rejected the scheme outright, leading many to speculate that this would be the start of something even worse.
Sure enough, much like the U.S. Federal Reserve threatened martial law and blood in the streets if Congress didn’t accept sweeping bailouts in 2008, now Germany is saying that Cypriot banks might never reopen after parliament’s decision:
Germany’s finance minister, Wolfgang Schaeuble said major Cypriot banks were “insolvent if there are no emergency funds,” according to a BBC report, meaning savers might lose all their money if no deal was reached. (Source)
There is extreme worry that if the banks do reopen, capital flight is all but assured. Meanwhile, similar confiscation schemes are being proposed for Italy and New Zealand (more on that below), spurring questions about which other nations are in line for a “haircut” . . . perhaps better called “the chopping block.”
Whether or not Cyprus gets its bailout in one form or another — perhaps from Russia — this is a precedent-setting crisis that is already leading to such a level of distrust in Cyprus that merchants are even refusing credit card payments. This is indeed shaping up to be a potential “Lehman Brothers Moment” with ramifications that could extend even beyond the troubled nations of Europe.
The euro zone agreed on Saturday to hand Cyprus a bailout worth 10 billion euros ($13 billion), but demanded depositors in its banks forfeit some money to stave off bankruptcy despite the risk of a wider run on savings.
….
In a radical departure from previous aid packages – and one that gave rise to incredulity and anger across the country – euro zone finance ministers forced Cyprus’ savers to pay up to 10 percent of their deposits to raise almost 6 billion euros.
Cyprus president Nicos Anastasiades agreed to the deal, which completely reversed his previous assurances that it would not happen. It sets a very dangerous precedent for future bailouts. As if brutal austerity wasn’t enough, the EU is now demanding a bailout tax making citizens and expat depositors alike personally liable for government and private bank debts. Reuters also notes that according to a draft of the legislation, criminal penalties of up to 3 years in jail and 50,000 euros could be imposed upon anyone who doesn’t comply.
Most of the 10 billion euros will go to bail out Cypriot banks, which took a blow when their substantial holdings of Greek government bonds were written down as part of that country’s second bailout.
Britain has 60,000 depositors in Cypriot banks, including thousands of military and government personnel stationed on the island. George Osborne highlighted that Cypriot banks in England would not be subjected to the tax (originally proposed at 6.75% for accounts under 100,000 Euros; 9.9% for those over 100,000), but expat depositors apparently will – government and military excluded:
George Osborne vowed today that those serving in Britain’s military or government in Cyprus will be protected after European finance chiefs ordered an unprecedented raid on personal bank accounts.
Up to 60,000 British savers are to lose thousands of pounds each as expats in Cyprus have their savings decimated in part of a painful bid to bail out the bankrupt island.
The Chancellor said the financial situation in Cyprus was ‘an example of what happens if you don’t show the world that you can pay your way’, adding: ‘We are not part of the bailout.’ (Source)
The tax is being justified as a last-ditch effort to raise money and keep Cyprus from supposedly causing a domino effect across the Eurozone as indebted nations begin to collapse. Cyprus had set itself up as a strong banking center for investors, but many are outraged over Anastasiades’ about-face:
Those affected will include rich Russians with deposits in Cyprus and Europeans who have retired to the island, as well as Cypriots themselves.
“I’m furious,” said Chris Drake, a former Middle East correspondent for the BBC who lives in Cyprus. “There were plenty of opportunities to take our money out; we didn’t because we were promised it was a red line which would not be crossed.”
“I’ve lost several thousand,” he told Reuters.
ZeroHedge reports that it is those “rich Russians” who could wind up angriest. Eurogroup had suggested that depositors under 100,000 euros should maintain their insurance against such a scheme, but it is possible that larger depositors will absorb their percentage by moving the top percentage tax to 15.6%.
The Eurogroup will give Cyprus more flexibility on bank levy, and that Cyprus should safeguard depositors under €100,000, even as the full €5.8 billion deposit goal must still be hit.
….
(The) Russian response to the discovery that haircuts on big deposits just rose from 9.9% to over 15.6% will hardly be warm and cuddly. Now may be a good time to ban gun (and plutonium) sales to angry Russian billionaire oligarchs. (Source)
However, the changes continue today, 3/19.
The President just proposed the ‘levy’ on deposits begin at EUR 20,000 just hours ahead of today’s planned vote.
CYPRUS REVISED BILL SEES NO LEVY ON DEPOSITS UP TO EU 20,000
However, it is still theft of private property which appears to be the philosophical stumbling block for the parties involved and therefore today’s vote appears to be delayed:
ANASTASIADES TO MEET PARTY LEADERS 9 AM TOMORROW: SPOKESPERSON
CYPRUS PARLIAMENT BANK-LEVY VOTE MAY HAPPEN TOMORROW, CYBC SAYS (Source)
Members of the troika of international lenders arrive at the Presidential Palace yesterday (Christos Theodorides)
THE government yesterday ordered banks to stay shut until next week as it toyed with the idea of re-submitting a proposal on tax deposits – at a much lower rate than the previous scheme – as it scrambled to avert a financial meltdown.
The government was yesterday trying to find alternative solutions after parliament on Tuesday rejected the terms of a bailout from the European Union and turned instead to Russia for a lifeline.
“We don’t have days or weeks, we have only hours to save our country,” Averof Neophytou, ruling DISY deputy chairman, told reporters as crisis talks in Nicosia dragged into the evening.
Neophytou tried to get the message through to other parties.
“I believe we will not be the cursed generation of politicians who will let our country go bankrupt,” Neophytou added.
It was suggested yesterday that the government may submit a bill today proposing a haircut on deposits but at lower rates than legislation that was rejected by parliament on Tuesday.
MPs threw out a proposed tax on bank deposits in exchange for a €10-billion bailout from the EU, a stunning rejection of the kind of strict austerity accepted over the past three years by crisis-hit Greece, Portugal, Ireland, Spain and Italy.
The tax — 6.7 per cent on deposits under €100,000 and 9.9 per cent on deposits over €100,000 — was designed to fetch the government €5.8 billion.
The shortfall from the lower rates could be covered by nationalising the provident funds of semi-state companies.
Bank of Cyprus vice president Evdokimos Xenophontos said the situation could be reversed but warned against touching foreign deposits.
“We cannot do it to foreign depositors who trusted us. This could be theft,” he told reporters after meeting President Nicos Anastasiades last night.
Xenophontos said only Cypriots must foot the bill in exchange for bank warrants, better interest rates, etc.
“If we protect them (foreigners) even if they leave, they will come back. We lived through an invasion and we overcame the difficulties on our own,” he said.
THE NUMBER of non-Cypriots living on the island number over 170.000, the vast majority of whom would have Cypriot bank accounts and are would be affected by a deposit haircut.
The full figure of 170,383 is from the population census carried out by the statistical services in October 2011, published in January this year.
Of the 170,383 non-Cypriots living in Cyprus at the time, 106,270 were EU citizens and 64,113 were non-European. From the European citizens, statistics show that the number of Greeks was the highest at 29,321, then Britons at 24,046, Romanians 23,706, and Bulgarians 18,536.
From the non-European citizen, Filippinos numbered 9,413, Russians 8,164, Sri Lankans 7,269, and Vietnamese 7,028.
Greeks, Romanians and Bulgarians mainly resided in Nicosia while most UK citizens resided in coastal areas such as, Paphos during the research period. The majority of Russian citizens resided in Limassol.
From the non-European citizens the majority lived in Nicosia.
“The population census is carried out once every ten years,” Georgia Ioannou, a statistics officer said. “Since 1982, we have been conducting this survey on October 1. We do not do the survey during the summer period as many people are on holiday and we also do not want to visit people’s homes during Christmas or Easter,” she said.
“We use the traditional method of going from home to home with a questionnaire. We mark down all residents of Cyprus who have been in the country for more than one year or are planning to stay for over a year,” Ioannou said.
The population of Cyprus during the latest population census was 840,407 people, 431,627 were women compared to 408,780 men. From the 106.270 European citizens, 53,607 were men and 52,663 were women. From the 64,113 Non-European citizens, the women were 41,114 and men were 22,999.
ATMs in Cyprus were drained over the weekend, electronic transfers were halted, and riots ensued following a decision by European Union chiefs to raid private savings accounts to help pay for the country’s $13 billion bailout. It was believed that there were plans to stretch a bank holiday to at least one week, while the exact measures were decided upon. However, yesterday the Cypriot parliament rejected the scheme outright, leading many to speculate that this would be the start of something even worse.
Sure enough, much like the U.S. Federal Reserve threatened martial law and blood in the streets if Congress didn’t accept sweeping bailouts in 2008, now Germany is saying that Cypriot banks might never reopen after parliament’s decision:
Germany’s finance minister, Wolfgang Schaeuble said major Cypriot banks were “insolvent if there are no emergency funds,” according to a BBC report, meaning savers might lose all their money if no deal was reached. (Source) There is extreme worry that if the banks do reopen, capital flight is all but assured. Meanwhile, similar confiscation schemes are being proposed for Italy and New Zealand (more on that below), spurring questions about which other nations are in line for a “haircut” . . . perhaps better called “the chopping block.”
Whether or not Cyprus gets its bailout in one form or another — perhaps from Russia — this is a precedent-setting crisis that is already leading to such a level of distrust in Cyprus that merchants are even refusing credit card payments. This is indeed shaping up to be a potential “Lehman Brothers Moment” with ramifications that could extend even beyond the troubled nations of Europe.
The euro zone agreed on Saturday to hand Cyprus a bailout worth 10 billion euros ($13 billion), but demanded depositors in its banks forfeit some money to stave off bankruptcy despite the risk of a wider run on savings.
….
In a radical departure from previous aid packages – and one that gave rise to incredulity and anger across the country - euro zone finance ministers forced Cyprus’ savers to pay up to 10 percent of their deposits to raise almost 6 billion euros.
Cyprus president Nicos Anastasiades agreed to the deal, which completely reversed his previous assurances that it would not happen. It sets a very dangerous precedent for future bailouts. As if brutal austerity wasn’t enough, the EU is now demanding a bailout tax making citizens and expat depositors alike personally liable for government and private bank debts. Reuters also notes that according to a draft of the legislation, criminal penalties of up to 3 years in jail and 50,000 euros could be imposed upon anyone who doesn’t comply.
The Cypriot central bank has denied reports today that stricken Cyprus Popular Bank, the island’s second-largest lender, is to be closed down, Reuters is reporting.
“We deny these reports. Efforts are under way right now to find the best possible solution for this bank,” Central Bank spokeswoman Aliki Stylianou told state television.
A man reads a note on the shutters of a Cyprus Popular Bank (CPB) branch informing customers that the bank will remain closed. Credit: Reuters
Cyprus pins hopes on creation of solidarity fund as ECB threatens to cut off lending
Political leaders in Cyprus have agreed that their country should form an investment fund to raise the capital needed to agree a bailout with the eurozone and International Monetary Fund and avert a collapse of its banking system.
The deputy leader of Cyprus’s conservative DISY party Averof Neofytou announced the agreement within a few hours of the European Central Bank saying that it was set to cut off lending to insolvent Cypriot banks on Monday.
“We will find a solution,” said Neofytou. “We have no other choice. We are making a united effort to avoid our country’s bankruptcy and I think we will succeed.”
Nicosia plans to create a fund collateralized by state assets, possibly including natural gas revenues, church property and social security fund reserves. A proposal is due to be submitted to the House of Representatives on Thursday evening.
A government official who declined to be named told Bloomberg that some kind of deposit tax was not being ruled out.
Meanwhile, Finance Minister Michalis Sarris continued talks in Moscow, with Cyprus hoping there would be Russian interest in Cypriot banks or in contributing to the investment fund being created.
Sarris told Cypriot state broadcaster that he would meet two Russian ministers on Thursday evening and that the main aim would be to convince Moscow to invest in the wealth fund to be set up by the Nicosia government.
“We are asking for help clearly, but something that would make also economic sense for Russia,” Sarris told reporters earlier.
Cyprus is also asking Moscow to extend the maturity of an existing 2.5-billion-euro loan. Sarris said that Russia was unable to provide Cyprus with a new loan.
Neofytou said that Cyprus would welcome Russian assistance but still needed to balance this against the requirements of remaining in the eurozone.
“We cannot reject any form of help but we are in the euros and we need the continue support of the ECB for liquidity,” he said. “Any support is welcome but we should not forget that we are in Europe and we need European institutions to stabilize our economy.”
I seem to recall a country that was also being pressured to accept the terms of a bailout. Its people were upset and angered over the aspect of having to bailout a bank for their fiscal irresponsibility. The government listened to it’s People and rejected the terms of the bailout. Lo and behold the world did not implode and they are still there. Doing quite nicely I might add….
When I first heard Iceland was allowing its taxpayers to vote on whether or not they should repay $5.7 billion that one of its defunct banks owes the U.K. and Netherlands, the angry taxpayer in me took hold and I hoped that they’d vote against repaying.
Turns out the Icelanders felt the same the resentment and said so today when they voted down a deal to repay the British and Dutch. Their rejection essentially revolts against the idea that taxpayers should be held responsible for banks’ financial problems.
Think about it this way, if given the choice back in 2008, would you have paid your share to save AIG, or any other financial institution, and in turn its creditors?
The situation in Iceland is a little trickier than that since the institution in question was a bank, Landsbanki Islands, whose depositors included folks from Britain and the Netherlands. When Landsbanki Islands blew up in 2008 leaving depositors without their money, the British and Dutch government stepped in and bailed out their respective depositors to keep them from panicking.
Now though, those governments want that money back. And since whatever assets are left of Landsbanki Islands are not enough to recover the total $5.7 billion, the people of Iceland are left footing what remains of the bill–estimated to be around $2 billion.
Help comes from Finland, Norway, Denmark and Sweden
The IMF will pump about $827 million into the Icelandic economy immediately
The goal is to stabilize the country’s finances and shore up its currency
Iceland is facing severe recession after a series of bank failures in October
(CNN) — Nordic countries agreed to lend struggling Iceland $2.5 billion to help it recover from a series of crippling bank failures, bolstering a $2.1 billion aid package from the International Monetary Fund, their governments announced Thursday.
Prime Minister Geir Haarde has been trying to drum up support for Iceland’s bailout.
“This is a first step to get Iceland out of its current serious financial and economic situation,” the governments of Finland, Norway, Denmark and Sweden announced in a joint statement. “The banking crisis in Iceland is of unprecedented proportions and has serious implications for the country’s economy.”
The statement follows the IMF’s decision on Wednesday to pump about $827 million into the Icelandic economy immediately, with another $1.3 billion coming in eight installments. Both moves are aimed at stabilizing Iceland’s finances and shoring up its currency, which plummeted after a series of bank failures in October.
Iceland sought IMF help after its government was forced to nationalize three banks to head off a complete collapse of its financial system. Trading on the country’s stock market was suspended for nearly a week, economic growth nearly flatlined and inflation jumped to more than 12 percent.
“As a result,Iceland is facing a severe recession, given the high debt level in the economy and significant dependence of the private sector on foreign currency and inflation-indexed debt,” John Lipsky, the IMF’s acting chairman, said in a statement announcing the decision.
A look at what Putin gains—newfound economic might
It’s mere coincidence, of course. But to Vladimir Putin, the man who called the Soviet Union’s demise the “greatest geopolitical catastrophe” of the 20th century, just the thought of saving Iceland’s hide must seem like redemption.
In 1986 Iceland hosted the Reykjavik summit between Ronald Reagan and Mikhail Gorbachev, a meeting momentous for its unplanned evolution into a conversation on nuclear disarmament between the two leaders—but also as a catalyst for the 1991 August coup against Gorbachev that sparked the USSR’s implosion.
“It was a sign of change in the Soviet Union, in many ways in the decline of the Soviet Union,” says Shamil Yenikeyeff, a Russia expert at the Oxford Institute for Energy Studies.
ARC DE TRIOMPHE
Now Reykjavik is asking Moscow for a $5.5 billion emergency loan to prop up its economy after its banking system collapsed two weeks ago amid the global credit disaster. And Russia is positioned, as a revitalized once-superpower flush with cash, to rescue Iceland, a NATO member praised for its chart-topping living standard! To Putin and the Kremlin, could there be a sweeter arc to the last two decades of Russian history?
That may be putting it a bit too strongly: even if Moscow grants the loan, Iceland will need a lot more cash, probably from the International Monetary Fund’s pocket. Still, Putin’s famous lament suggests a partial answer to the question that’s abounded since reports of the loan surfaced: What’s Russia after here?
True, $5.5 billion isn’t a staggering sum for a country with around 100 times as much in cash reserves. Nor is the loan a done deal: agreement wasn’t reached in the first round of negotiations last week. But the gesture alone—even the possibility—is significant. After all, Russia was a financial and political basket case just 10 years ago and has its own economic woes at the moment.
Pride, surely, isn’t the only prize: the seas of the “High North” are rich in fish and energy resources, and Moscow needs to show the world it’s a good global citizen after trouncing Georgia this summer. But for a leadership keenly aware of Russia’s less than auspicious place in modern history texts, this is an opportunity to further demonstrate that indeed there is a new world order, and it’s not the one George H.W. Bush foresaw in 1990.
Different faces but the same old story is being replayed in a small part of the Euro-zone, Cyprus, and that story is one of the Cypriot banking crime syndicate gambling with depositor funds on the debt markets, this time it’s Greek bonds, yes, these master-eds of the universe used depositor funds to pile into soon to go bankrupt Greece because of the high yields they offered so that the bankster’s could bank bonuses on the basis of fictitious profits as illustrated by the fact that they have dumped an infinitely pile of losses (Greek Bond’s ) onto Cypriot tax payers, far beyond anything that any other Euro-zone member has had to face to date.
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