Courtesy of Mish.
EU officials are now swarming over Cyprus threatening to cut off funds to Laiki , Cyprus’ second largest bank if the deal does not go through. Nonetheless, Cyprian politicians are balking because they know what will happen to those who go along with EU blackmail threats.
Making matters difficult for President Nicos Anastasiades, the Cyprian government controls only 28 of 56 seats in the chamber and needs support and backing from two deputies of a small pro-European party.
Today’s vote was postponed for one obvious reason. The votes are not there.
As one would expect Cypriot authorities in revised deal talks.
Cyprus’ embattled president was on Sunday in talks with Brussels and political rivals to ease the terms of a planned levy on smaller deposit holders as he tried to scrape together a parliamentary majority for a €10bn bailout for the debt-laden island.
A revised deal being discussed in Nicosia, with the blessing of the European Commission, would shift more of the burden on to deposits larger than €100,000, according to officials involved in the talks.
“The ECB officials were very blunt,” said one Cypriot official familiar with the discussions. “There are serious fears of contagion regarding Italy and Spain if this legislation doesn’t go through.”
Cypriot officials insisted no levy on smaller depositors was impossible. One senior Cypriot official involved in the talks said that because about 35 per cent of all deposits are below the threshold, exempting them would mean a rate so high for the rest that it would no longer be viewed as a tax.
Archbishop Chrysostomos, the island’s influential spiritual leader, called for Cyprus to leave deposits intact, leave the eurozone and readopt its former currency, the Cyprus pound.
Lie of the Day
Cyprus President Nicos Anastasiades now states “depositors would be offered bank shares covering the full amount of their losses, while those who left their savings in banks for another two years would be rewarded with bonds backed by future income from exploiting Cyprus’s natural gas deposits.”
The Mish response is “Please be serious”. Bank shares are worthless, and if they are not, they should be and soon will be. As for leaving money in the bank for two more years, subject to still more confiscation at the whims of the EU, I also say “please be serious”.
“Bailout Math”…
