Author Topic: Cyprus: Protests Continue as Economic Crisis Deepens  (Read 2901 times)

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Offline Riney

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Cyprus: Protests Continue as Economic Crisis Deepens
« on: March 27, 2013, 17:01:49 PM »
Cyprus: Protests Continue as Economic Crisis Deepens
March 27th 2013
Democracy Now!

Protests are continuing in Cyprus as the country’s economic crisis has appeared to deepen following the negotiation of a massive European bailout. Officials are expected to unveil new controls before banks reopen to stave off a rush by people concerned about their savings. Large depositors in Cyprus are now reportedly facing losses of roughly 40 percent. On Tuesday, employees at the country’s largest bank occupied their workplace amid fears they could lose their jobs.
Andreas Vassiliou: "It is a big demonstration. The workers of the Bank of Cyprus have shown once more that they are demanding their rights. We are carrying out a very dignified and peaceful protest, and it is only to secure the rights of the employees of the Bank of Cyprus."

the link: http://www.democracynow.org/2013/3/27/headlines#3272
"Life shrinks or expands in proportion to one's courage" Anais Nin .. and yet we must arm ourselves with fear

Offline Riney

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Re: Cyprus: Protests Continue as Economic Crisis Deepens
« Reply #1 on: March 28, 2013, 17:35:03 PM »
Cyprus Banks Reopen with Tight Restrictions
March 28th 2013
Democracy Now!

Banks in Cyprus are reopening today after being shut for nearly two weeks with new controls now in place to prevent people from emptying their bank accounts. Cash withdrawals are limited to 300 euros, or $384, per person each day with limits also imposed on how much can be carried abroad. The electronic transfer of funds out of Cyprus is banned. Officials still fear mass withdrawals after it was announced major swaths of larger-size deposits would be used to pay off banking debts under a $13 billion international bailout. Mass protests against the bailout continued Wednesday as thousands took to the streets in the capital Nicosia.
Mathew Elefteriou: "I think we should leave the troika and do this on our own, because they forced us to take these austerity measures, and the people has done, in my opinion, nothing wrong. The banks, the banks should pay, not the people."

the link: http://www.democracynow.org/2013/3/28/headlines#3282
"Life shrinks or expands in proportion to one's courage" Anais Nin .. and yet we must arm ourselves with fear

Offline Riney

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Re: Cyprus: Protests Continue as Economic Crisis Deepens
« Reply #2 on: March 30, 2013, 22:59:04 PM »
Big Savers In Cyprus Stand To Lose Even More Than Thought
by THE ASSOCIATED PRESS
March 30, 201311:19 AM
NPR.org

Big depositors at Cyprus' largest bank may be forced to accept losses of up to 60 percent, far more than initially estimated under the European rescue package to save the country from bankruptcy, officials said Saturday.

Deposits of more than 100,000 euros (around $128,000) at the Bank of Cyprus would lose 37.5 percent in money that would be converted into bank shares, according to a central bank statement. In a second raid on these accounts, depositors also could lose up to 22.5 percent more, depending on what experts determine is needed to prop up the bank's reserves.

The savings converted to bank shares would theoretically allow depositors to eventually recover their losses. But the shares now hold little value and it's uncertain when — if ever — the shares will regain a value equal to the depositors' losses.

Europe has demanded that big depositors in the country's two largest banks — Bank of Cyprus and Laiki Bank — accept across-the-board losses in order to pay for Cyprus' 16 billion euro bailout.

Cypriot officials had previously said that large savers at Laiki — which would be absorbed in to the Bank of Cyprus — could lose as much as 80 percent. But they had said large accounts at the Bank of Cyprus would lose only 30 to 40 percent.

Analysts said Saturday that imposing bigger losses on Bank of Cyprus customers could further squeeze already crippled businesses as Cyprus tries to rebuild its banking sector in exchange for the international rescue package.

"Most of the damage will be done to businesses which had their money in the bank" to pay suppliers and employees, said University of Cyprus economics Professor Sofronis Clerides. "There's quite a difference between a 30 percent loss and a 60 percent loss."

With businesses shrinking, the country could be dragged down into an even deeper recession, he said.

There's also concern that large depositors — including many wealthy Russians — will take their money and run once capital restrictions that Cypriot authorities have imposed on bank transactions to prevent such a possibility are lifted in about a month.

Cyprus agreed on Monday to make bank depositors with accounts over 100,000 euros contribute to the financial rescue in order to secure 10 billion euros in loans from the eurozone and the International Monetary Fund. Cyprus needed to scrounge up 5.8 billion euros on its own in order to clinch the larger package, and banks had remained shut for nearly two weeks until politicians hammered out a deal, opening again on Thursday.

But fearing that savers would rush to pull their money out in mass once banks reopened, Cypriot authorities imposed a raft of restrictions, including daily withdrawal limits of 300 euros for individuals and 5,000 euros for businesses — the first so-called capital controls that any country has applied in the eurozone's 14-year history.

Under the terms of the bailout deal, the country' second largest bank, Laiki — which sustained the most damaged from bad Greek debt and loans — is to be split up, with its nonperforming loans and toxic assets going into a "bad bank." The healthy side will be absorbed into the Bank of Cyprus.

On Saturday, economist Stelios Platis dismissed the rescue plan as "completely mistaken" and criticized Cyprus' euro area partners for insisting on foisting Laiki's troubles on the Bank of Cyprus.

Clerides said it appears that some euro area countries such as Germany and Finland wanted to see the end of Cyprus as an international financial services center, while others, such as eurogroup chief Jeroen Dijsselbloem, wanted to use the country as an "guinea pig" to send the message that European taxpayers would no longer shoulder the burden of bailing out problem banks.

But German Finance Minister Wolfgang Schaeuble challenged that notion, insisting in an interview with the Bild daily published Saturday that "Cyprus is and remains a special, isolated case" and doesn't point the way for future European rescue programs.

the link: http://www.npr.org/2013/03/30/175779057/big-savers-in-cyprus-stand-to-lose-even-more-than-thought?ft=1&f=1001&sc=tw&utm_source=twitterfeed&utm_medium=twitter
"Life shrinks or expands in proportion to one's courage" Anais Nin .. and yet we must arm ourselves with fear

enrica

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Re: Cyprus: Protests Continue as Economic Crisis Deepens
« Reply #3 on: April 01, 2013, 19:14:45 PM »
Ty for updates Riney.

Very important stuff.

It seems EU countries push to import the "Cyprus model".

I think this would be potentially very dangerous for the right of property of citizens.

Offline Riney

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Re: Cyprus: Protests Continue as Economic Crisis Deepens
« Reply #4 on: April 03, 2013, 15:38:46 PM »
I.M.F. to Contribute 1 Billion Euros to Cyprus Bailout
By JAMES KANTER
Published: April 3, 2013

BRUSSELS — The International Monetary Fund said on Wednesday it would contribute €1 billion, or about 10 percent of a bailout package for Cyprus in exchange for widespread reforms of the Cypriot economy.

“This is a challenging program that will require great efforts from the Cypriot population,” Christine Lagarde, the managing director of the I.M.F., said in a statement.

The goal was to “stand by Cyprus and the Cypriot people in helping to restore financial stability, fiscal sustainability and growth to the country and its people,” Ms. Lagarde said in a second statement she issued jointly with Olli Rehn, the European Union commissioner for economic and monetary affairs.

The statements follow agreement on Tuesday between Cyprus and the so-called troika of international organizations — the European Central Bank, the European Commission and the I.M.F. — that painstakingly negotiated the €10 billion, or $13 billion, bailout and the terms of the deal.

“This is an important development which brings a long period of uncertainty to an end,” Christos Stylianides, a spokesman for the Cypriot government, said Tuesday in a statement made available on Wednesday.

“Undoubtedly, the completion of the agreement with troika should have taken place a lot sooner, under more favorable political and financial circumstances,” said Mr. Stylianides, who was apparently referring to infighting in Cyprus about responsibility for the financial debacle.

The memorandum of understanding between Cyprus and the troika outlines budget cuts, privatizations and other conditions Cyprus must meet to receive its allotments of bailout money. A parliamentary vote in Cyprus is needed to approve the deal, while Germany and Finland are also expected to seek the approval of their Parliaments.

Olivier Bailly, a spokesman for the European Commission, said Wednesday that the memorandum would not be made public while euro-area governments reviewed the document. But Cypriot authorities on Tuesday described elements of the agreement that they regarded as favorable.

Mr. Stylianides, the Cypriot spokesman, said the deal safeguarded important parts of the economy by keeping deposits of natural gas in offshore waters under Cypriot jurisdiction, and by winning two more years until 2018 to hit deficit targets and carry out privatizations.

Mr. Stylianides also said the government saved the jobs of contract teachers and of 500 civil servants, and had overcome demands by the troika to tax dividends.

Even so, the memorandum could be hotly contested in by the Cypriot Parliament, where many lawmakers have criticized crisis measures that already have been taken, like capital controls, which threaten to make a bleak economic outlook even worse.

In a move partly aimed at easing those tensions and smoothing parliamentary approval of the memorandum in Cyprus, the government in Nicosia on Tuesday appointed a new finance minister, Harris Georgiades, to replace Michalis Sarris, who resigned. Mr. Sarris has been blamed at home and abroad for his handling of the crisis. Mr. Georgiades was the deputy finance minister.

Over the course of the negotiations to reach a deal for Cyprus, the spotlight fell on whether the I.M.F. was too forceful in pressing countries like Cyprus to limit debt and force losses on investors. The approach of the I.M.F. strained relations with the European Commission, which had harbored concerns about the potentially confidence-sapping effects of such aggressive measures on other economies within the euro area.

The I.M.F. proportion of the package Cyprus is smaller than in some previous arrangements for countries like Greece, but that was not a sign of a change in the I.M.F.'s policy in the euro area, said Mr. Bailly, the commission spokesman. The sums given by the I.M.F. depend on “specific situation” in each country, he said, adding that the €1 billion, three-year loan for Cyprus “was unanimously agreed in the troika.”

Ms. Lagarde said substantial spending cuts would be needed “to put debt on a firmly downward path” including in areas like social welfare programs.

But she said the plan, which the I.M.F. could agree to early next month, sought fairness.

“The fiscal and financial policies of the program seek to distribute the burden of the adjustment fairly among the various segments of the population and to protect the most vulnerable groups,” she said.

More than 95 percent of account holders at Laiki Bank, which will be closed under the plan, and at the Bank of Cyprus, which is being restructured, were fully protected, she said. Bank of Cyprus and Laiki Bank are the two biggest banks in the island nation.

Key fiscal measures included raising the country’s corporate income tax rate to 12.5 percent from 10 percent, she said.

the link: http://www.nytimes.com/2013/04/04/business/global/imf-to-contribute-1-billion-euros-to-cyprus-bailout.html?partner=rss&emc=rss&smid=tw-nytimes&_r=0
"Life shrinks or expands in proportion to one's courage" Anais Nin .. and yet we must arm ourselves with fear