And hundreds of people are gathering for planned rallies in central Athens Wednesday.
The country’s main labor unions are protesting soaring unemployment, which is the highest in the 27-country European Union, and the austerity measures the government is enacting in return for crucial bailout loans.
Greece nearly went bankrupt in 2010 and has since depended on money from its euro partners and the International Monetary Fund, granted on condition the government pursues deep spending cuts and wide-ranging economic reforms.
While the austerity has succeeded in reducing high budget deficits, it has been at a huge cost. The country is now in its sixth year of a deep recession.
(Reuters) – The Portuguese government approved around 800 million euros of new spending cuts on Thursday to put its EU/IMF bailout back on track after some of its austerity plan was thrown out by the constitutional court.
Budget Secretary Luis Sarmento told a news briefing after an all-night cabinet meeting that the latest cuts and some other measures would allow Lisbon to meet this year’s budget deficit target of 5.5 percent of gross domestic product and secure the next 2 billion euro tranche of its bailout.
The government will hope its new plan is resistant to fresh court challenges, but the cuts could still stoke public anger which brought hundreds of thousands of people onto the streets last month in opposition to austerity.
Keeping Portugal on course for a full return to the debt markets is an important goal for the euro zone, which has seen its path out of crisis blocked in recent months by a political stalemate in Italy and a financial collapse in Cyprus.
Representatives of Lisbon’s lenders from the European Union and International Monetary Fund were in Lisbon this week to help the government identify measures to compensate for the court’s ruling and work on wider structural cuts through 2015.
The government had been forced to cut spending further after the court on April 5 overturned a range of austerity measures set out in this year’s budget, leaving a hole of around 1.3 billion euros.
The new spending cuts that affect expenditure on public sector workers and other current spending are worth 0.5 percent of gross domestic product.
But the government said it would also use European Union structural funds, further renegotiate public-private partnership contracts and bring forward some structural spending cuts planned for 2014 and 2015 to plug the hole. The cuts will be detailed on Tuesday.
“These measures will guarantee that the eighth tranche of the bailout is disbursed to Portugal. The tranche depended on Portugal honoring the budget limits and that’s what we are after with these measures,” Regional Development Minister Miguel Poiares Maduro told the news briefing.
Portugal, which is in the grips of its worst recession since the 1970s, has already imposed the biggest tax hikes in living memory to try and bring down its deficit and exit its bailout program in 2014 as planned. In January it issued its first bond since the 2011 bailout and has been preparing another issue this year to regain full access to market financing.
Filipe Garcia, head of Informacao de Mercados Financeiros consultants in Porto said the new demonstration of the government’s will to comply with its bailout commitments and the fact that the court ruling had failed to trigger a political crisis supports Portugal’s credibility abroad.
“As for the measures themselves, it’s too early to say if they will be enough to meet the goals because there are no details and because some depend on third parties,” he added.
The center-right coalition government has a comfortable majority in parliament to pass bills and earlier this month easily defeated a no-confidence motion by the main opposition Socialists who have ruled out cooperating with the government on further austerity measures.
In a statement, Portugal’s lenders said they would continue to discuss the measures with the government and hoped to complete the latest review in a timely fashion.
The government will submit amendments to this year’s budget to parliament by mid-May.
The country’s benchmark 10-year bond yields that spiked to around 6.7 percent after the court ruling have since slipped back to about 6.2 percent – not far from January’s levels of 5.9 percent – the lowest since late 2010. They were little changed on Thursday.
(Reporting By Andrei Khalip and Daniel Alvarenga; Editing by Toby Chopra)
Sharon Connor stands to lose upwards of €50,000 after her profits from a house sale remain frozen in a bank on the island
Tragedy first struck Sharon Connor when her husband, Gary, was killed by a heart attack in January last year. He had just turned 54. From running a successful scuba-diving business on Cyprus, the mother-of-two found herself catapulted into a world of grief, unable to even visit the ornate, two-storey villa the couple had bought on the island.
“It took me five months before I could set foot in the place,” said Connor, who was on her own when she found her husband dead in bed. “I still have flashbacks and see it in my head all the time.”
In March the widow decided to put the property on the market. In the space of three days she had found a buyer, located a new home in the UK and a job outside London. “I was trying to move forward with my life,” the 55-year-old told the Observer from Kent, “until I found myself caught up in the nightmare scenario that has befallen Cyprus”.
This weekend the Briton faces the prospect of financial ruin following the shattering news that the proceeds from her house sale – €181,000 (£155,000) – will remain frozen in the Bank of Cyprus as a result of capital controls enforced to contain the crisis.
As the size of Cyprus’s bailout requirements swelled from €17bn to €23bn, she learned that the money, deposited in a special account for the purposes of the transaction, could not be transferred to the UK. Now she lives in fear that, like other depositors with more than €100,000 in Cyprus, she will also fall victim to the raid on savings that the Cypriot government has been ordered to implement as the price of international aid.
“It is totally unfair. My funds should not be frozen, as they are not savings that have been accruing interest,” said Connor, whose misfortune was that the money hit her account two hours before the close of business on 15 March.
“It was money from a real estate sale that was supposed to be in the bank for a single day. The same day it went in, I sent an email instructing the bank to transfer the funds – some of which were in euros and some in sterling – to the UK, but on Saturday morning the news broke that Cypriot banks were in major financial difficulty.”
Ever since then Connor, who was due last week to buy a three-bedroom semi in Kent, has been battling to get her money released. She has written to “everyone who is anyone”, including David Cameron and Angela Merkel, and started a Facebook campaign called “Gary and Sharon v Merkel”.
“Every day is a struggle,” said the widow, who is from Welling in south-east London. “I was set on moving on after Gary passed last year and had everything in motion when, overnight, my world was turned upside down again … it is a scenario that had made me physically ill.”
Connor has calculated that she could lose €50,000 (£42,000) as a result of the emergency levy that Nicosia must now enact to qualify for financial assistance from the EU and the International Monetary Fund. Revelations that the beleaguered Cypriot government will have to find almost double the amount to meet the terms of the €10bn bailout – amid signs that the EU’s wealthy north has tired of rescuing the bloc’s heavily indebted south – have only sharpened her anguish. “Now I live in worry that with the latest news that Cyprus’s bailout requirements are going to be much bigger than thought, depositors will suffer even more,” she said.
Connor had hoped to be exempted from the levy – along with other special cases – but her appeal for dispensation was turned down by the island’s central bank last week. On Friday she was told by the Bank of Cyprus that it was seeking clarification. “I asked my representative at the Bank of Cyprus to put forward my appeal to the central bank, and in turn they asked for the contract of sale and solicitors’ details,” she recalled. “Last week the central bank committee declined the request. I was also told that I cannot transfer any funds from my accounts to the UK.”
In a cruel twist of fate, the sale was due to have been completed a week earlier. “A document was missing from the necessary paperwork that prevented the deal from being closed,” she said. “Had the transaction gone through as originally planned, the funds would now be in my British bank account.”
Connor, who also has five grandchildren, has now been forced to cash in her two private pension schemes to make ends meet. “I have my furniture in storage with no way of knowing when, or if, I can purchase my own property,” she said. “The local council will not put me on their housing register as I have funds from the sale of a house in the bank, albeit I cannot access them.”
Had it not been for the help of friends and family, she says, she might not have got through the ordeal. “If it was not for the goodness of my sister, Theresa, and other family members, I would be homeless,” she said. “I live in hope that common sense will prevail and I will receive what is rightfully mine. This is money that my husband and I have accumulated and worked for our whole lives.”
April 3, 2013
Following the criminal plot by the IMF, the EU and the European Central Bank to steal billions from depositors in Cyprus, the banksters have hatched a new plan to steal trillions, level the economic playing field and force millions into grinding poverty.
In order to save the earth and pay for social programs supposedly designed to help the victims of our alleged carbon crimes, the IMF says we need to pay an extra $1.40 per gallon in taxes.
“The time has come for subsidy reform and carbon taxation,” declared the IMF’s deputy director, David Lipton, last week. “The IMF will draw attention to the issue and help those who want to go forward.”
The IMF says impoverishing more people through burdensome taxation will reduce traffic jams and accidents by discouraging driving.
Gas in the U.S. is currently between $3.26 and $4.00 per gallon and the proposed IMF tax, if adopted, would inflict further damage on the economy.
“Good grief!” exclaimed Rep. Fred Upton, a Michigan Republican who chairs the House Energy and Commerce Committee. “Higher gas prices hit those who can least afford it the most as American families are forced to pay a larger percentage of their income on higher energy prices.
“Drivers across the country are already struggling to pay up to $4.00 a gallon for gas, and further price increases at the pump could be devastating to low and middle-class families and disastrous to our economic recovery. Instead of finding way to make gas more expensive, our focus needs to be on finding solutions to keep energy prices affordable.”
Protesters hold a banner during an anti- bailout rally outside of European Union house in capital Nicosia, Cyprus, Sunday, March 24, 2013. After failing for a week to find a solution to a crisis that could force their country into bankruptcy, Cypriot politicians turned to the European Union on Sunday in a last-ditch effort to help the island nation forge a viable plan to secure an international bailout. (AP Photo/Petros Karadjias)
BRUSSELS (AP) — Cyprus secured a 10 billion euro ($13 billion) package of rescue loans in tense, last-ditch negotiations early Monday, saving the country from a banking system collapse and bankruptcy.
“We’ve put an end to the uncertainty that has affected Cyprus and the euro area over the past week,” said Jeroen Dijsselbloem, who chairs the meetings of the 17-nation eurozone’s finance ministers.
In return for the bailout, Cyprus must drastically shrink its outsized banking sector, cut its budget, implement structural reforms and privatize state assets, he said.
The cash-strapped Mediterranean island nation has been shut out of international markets for almost two years. It needs the bailout to recapitalize its ailing lenders and keep the government afloat. The European Central Bank had threatened to cut crucial emergency assistance to the country’s banks by Tuesday without an agreement.
Without a deal by Monday night, the tiny Mediterranean island nation of about 1 million would have faced the prospect of bankruptcy, which could have forced it to become the first country to abandon the euro currency. That precedent would have roiled markets and spurred turmoil across the entire eurozone of 300 million people, analysts said, even though Cyprus only makes up less than 0.2 percent of the eurozone’s 10 trillion euro economy.
The finance ministers accepted the plan reached in 10 hours of negotiations in Brussels between Cypriot officials and the so-called troika of creditors: the International Monetary Fund, the European Commission and the European Central Bank.
“We believe that this will form a lasting, durable and fully financed solution,” said IMF chief Christine Lagarde.
Under the plan, Cyprus’ second-largest bank, Laiki, will be restructured and holders of bank deposits of more than 100,000 euros will have to take losses, Dijsselbloem said, adding that it was not yet clear how severe the losses would be.
“This will have to be worked out in the coming weeks,” he added, noting that it is expected to yield 4.2 billion euros overall. Analysts have estimated investors might lose up to 40 percent of their money.
Savers’ deposits with all Cypriot banks of up to 100,000 euros will be guaranteed by the state in accordance with the EU’s deposit insurance guarantee, Dijsselbloem said. Laiki will be dissolved immediately into a bad bank containing its uninsured deposits and toxic assets, with the guaranteed deposits being transferred to the nation’s biggest lender, Bank of Cyprus.
Large deposits with Bank of Cyprus above the insured level will be frozen until it becomes clear whether or to what extent they will also be forced to take losses, the Eurogroup of finance ministers said in a statement.
Dijsselbloem defended the creditors’ approach to make deposit holders take heavy losses, saying the measures “will be concentrated where the problems are, in the large banks.”
The international creditors, led by the IMF, were seeking a fundamental restructuring of the outsized financial system, which is worth up to eight times the country’s gross domestic product of about 18 billion euros. They said the country’s business model of attracting foreign investors, among them many Russians, with low taxes and lax financial regulation has backfired and must be upended.
For Cyprus, the drastic shrinking of its financial sector, the loss of confidence with the recent turmoil and the upcoming austerity measures means that the country is facing tough times.
“The near future will be very difficult for the country and its people,” acknowledged the EU Commission’s top economic official Olli Rehn. “But (the measures) will be necessary for the Cypriot people to rebuild their economy on a new basis.”
To secure a rescue loan package, Nicosia had to find ways to raise several billion euros so it could qualify for the 10 billion euro bailout package. The bulk of that money is now being raised by forcing losses on large deposit holders, with the remainder coming from tax increases and privatizations. The creditors had insisted that Cyprus couldn’t receive more loans because that would make its debt burden unsustainably high.
A plan agreed to in marathon negotiations earlier this month called for a one-time levy on all bank depositors in Cypriot banks. But the proposal ignited fierce anger among Cypriots because it also targeted small savers. It failed to win a single vote in the Cypriot Parliament.
In an illustration of the depth of the fear of a banking collapse, Cyprus’ central bank on Sunday imposed a daily withdrawal limit of 100 euros ($130) from ATMs of the country’s two largest banks to prevent a bank run by depositors worried about their savings.
Cypriot banks have been closed this past week while officials worked on a rescue plan, and they are not due to reopen until Tuesday. Cash has been available through ATMs, but long lines formed and many machines have quickly run out of cash.
The Cypriot government also voted a set of laws over the past week to introduce capital controls, to avoid a huge depositor flight once its banks will reopen.
After the eurozone’s finance ministers’ approval, several national parliaments in eurozone countries such as Germany then must also approve the bailout deal, which might take another few weeks. EU officials said they expect the whole program to be approved by mid-April.
ECB ratchets up pressure as party leaders met to agree a package that would satisfy its eurozone partners and the IMF
The Guardian, Thursday 21 March 2013
Cypriot politicians were racing to agree details of a “plan B” to rescue their economy on Thursday night, after the European Central Bank threatened to withdraw support for the country’s banking sector if a bailout was not agreed by Monday.
The country’s second-largest bank, Laiki, is to be restructured as part of the plan. It will avert bankrupcy and protect savers with up to €100,000, according to the country’s central bank governor, Panicos Demetriades.
The move came hours after the ECB ratcheted up the pressure on Nicosia as party leaders met to agree a package that would satisfy its eurozone partners and the International Monetary Fund. Tensions were rising on the streets, with crowds of bank workers demonstrating near the parliament building in Nicosia following reports that its second largest lender, Laiki, would be shut down and split into a good and bad bank.
On Thursday afternoon the president, Nicos Anastasiades, said parliament would receive a bill by the end of the night, outlining the creation of a state investment fund to meet the ECB’s ultimatum to raise billions of euros or face the loss of the bailout money and the collapse of its banking sector.
Another bill will pave the way for the imposition of capital controls – restrictions on taking money out of the country’s banks – according to reports from Nicosia.
The ECB confirmed it would not provide emergency liquidity assistance to the island’s banking sector beyond 25 March, unless a bailout had been agreed. Without its support, Cyprus‘s two largest banks, Bank of Cyprus and Laiki, could collapse.
There were lengthy queues at many Laiki cash machines on Thursday as banks and the domestic stock market remained closed.
The eurogroup of finance ministers were scheduled to hold a conference call from 6pm GMT on Thursday to discuss the situation in Cyprus.
Cypriot political leaders were involved in emergency talks on Thursday morning to find a way to raise the €6bn (£5.1bn) demanded by the IMF and EU in return for a €10bn bailout.
Averof Neophytou, the deputy leader of the ruling Disy party, confirmed the leaders had agreed to create the solidarity fund. Details of the scheme were not released, but it was believed the fund could use Cyprus’s energy resources as collateral, or include state assets, pension funds or the property of the Church of Cyprus. A vote on the package could come as early as Thursday night.
Parliamentary speaker Yiannakis Omirou, who leads the small Edek socialist party, said the issue of taxing bank deposits had not been discussed during the meeting, suggesting a savings levy could be off the agenda.
Two days ago, the parliament rejected the plan for a 6.75% tax on savers with more than €20,000 in the bank, rising to 9.9% for those with more than €100,000.
The ECB said a continuation of its emergency liquidity assistance “could only be considered if an EU/IMF programme is in place that would ensure the solvency of the concerned banks”.
Speaking after the ECB issued its ultimatum, Cyprus’s central bank governor said he was confident the country would reach a deal in time. “We will have a programme of support for Cyprus by Monday,” said Demetriades.
The Cypriot finance minister, Michael Sarris, has been in Moscow since Tuesday in an attempt to secure a rescue package, but hopes for a Kremlin-brokered deal appeared to be fading, as negotiations between Sarris and his Russian counterpart looked set to enter a third day with no results.
For the first time, Nicosia showed a public willingness to offer access to financial assets and gas deposits in the eastern Mediterranean as part of any agreement. “Understandably, if there is to be help, it has to be connected with a number of economic activities,” said Sarris ahead of discussions with Russian finance minister Anton Siluanov.
Russian officials have sought to downplay talk of large amounts of corrupt cash flowing through Cyprus, but the Mediterranean island is thought to play a key role in Russian money laundering operations.
The Russian prime minister, Dmitry Medevdev, has intensified his criticism of the idea of a compulsory levy on deposits in Cyprus, where Russian citizens are estimated to hold up to $19bn, and said the plan “looked like theft”.
Medvedev interrupted a conference in Moscow to read the news from his iPad that the Cypriot parliament had decided to drop the compulsory tax proposal — and the announcement was met with applause and shouts of “hurrah!” from delegates.
Despite alarm over possible expropriation, the Cypriot appeal to Moscow has given Russia an unprecedented opportunity to exert influence in an internal European Union matter. “It’s an opportunity for the Russians to make a major play,” said one western banker in Moscow.
But the parameters of any deal remain unclear. State-owned gas giant Gazprom is unlikely to be interested in operating Cypriot gas fields in the context of an over-supplied European market, according to Ildar Davletshin, an oil and gas analyst at Renaissance Capital in Moscow.
Russia’s three biggest state-owned banks — Sberbank, VTB and Gazprombank — have all denied they are interested in buying financial assets in Cyprus.
Cyprus has recently discovered significant offshore gas deposits, and major energy companies have shown an interest in tapping those resources.
With the Monday deadline imposed by the ECB, time is running out for Cyprus to conclude an agreement with the Kremlin, according to Dmitry Polevoy, ING Bank’s chief economist in Russia. “All these deals [involving energy or banking assets] require intensive due diligence processes … and usually require much more time than Cyprus has,” he said.
“But Russia is a country of surprises and nobody knows what is really at stake and whose money is at risk,” he added.
Medvedev also sought to find more unorthodox benefits for Russia in Cyprus’s crisis. The Kremlin should develop islands, including the Kurils and Sakhalin, off the country’s far east Pacific coast as alternative offshore banking destinations, Medvedev said.
Russian sovereignty of the Kuril Islands is disputed by Japan, while Sakhalin is the site of a former Tsarist penal colony.
The implementation of such a plan would have “ruinous consequences for Russia’s financial system,” former finance minister Aleksei Kudrin wrote on Twitter.
Cyprus is a beta test. The banksters are trying to commit bank robbery in broad daylight, and they are eager to see if the rest of the world will let them get away with it. Cyprus was probably chosen because it is very small (therefore nobody will care too much about it) and because there is a lot of foreign (i.e. Russian) money parked there. The IMF and the EU could have easily bailed out Cyprus without any trouble whatsoever, but they purposely decided not to do that. Instead, they decided that this would be a great time to test the idea of a “wealth tax”. The government of Cyprus was given two options by the IMF and the EU – either they could confiscate money from private bank accounts or they could leave the eurozone. Apparently this was presented as a “take it or leave it” proposition, and many are using the world “blackmail” to describe what has happened. Sadly, this decision is going to set a very ominous precedent for the future and it is going to have ripple effects far beyond Cyprus. After the banksters steal money from bank accounts in Cyprus they will start doing it everywhere. If this “bank robbery” goes well, it will only be a matter of time before depositors in nations such as Greece, Italy, Spain and Portugal are asked to take “haircuts” as well. And what will happen one day when the U.S. financial system collapses? Will U.S. bank accounts also be hit with a “one time” wealth tax? That is very frightening to think about.
Cyprus is a very small nation, so it is not the amount of money involved that is such a big deal. Rather, the reason why this is all so troubling is that this “wealth tax” is shattering confidence in the European banking system. Never before have the banksters come directly after bank accounts.
If everything goes according to plan, every bank account in Cyprus will be hit with a “one time fee” this week. Accounts with less than 100,000 euros will be hit with a 6.75% tax, and accounts with more than 100,000 euros will be hit with a 9.9% tax.
How would you feel if something like this happened where you live?
How would you feel if the banksters suddenly demanded that you hand over 10 percent of all the money that you had in the bank?
And why would anyone want to still put money into the bank in nations such as Greece, Italy, Spain or Portugal after all of this?
One writer for Forbes has called this “probably the single most inexplicably irresponsible decision in banking supervision in the advanced world since the 1930s.“ And I would agree with that statement. I certainly did not expect to see anything like this in Europe. This is going to cause people to pull money out of banks all over the continent. If I was living in Europe (and especially if I was living in one of the more financially-troubled countries) that is exactly what I would be doing.
The bank runs that we witnessed in Cyprus over the weekend may just be a preview of what is coming. When this “wealth tax” was announced, it triggered a run on the ATMs and many of them ran out of cash very rapidly. A bank holiday was declared for Monday, and all electronic transfers of money were banned.
Needless to say, the people of Cyprus were not too pleased about all of this. In fact, one very angry man actually parked his bulldozeroutside of one bank branch and threatened to physically bulldoze his way inside.
But this robbery by the banksters has not been completed yet. First, the Cypriot Parliament must approve the new law authorizing this wealth confiscation on Monday. If it is approved, then the actually wealth confiscation will take place on Tuesday morning.
According to Reuters, the new president of Cyprus is warning that if the bank account tax is not approved the two largest banks in Cyprus will collapse and there will be complete and total financial chaos in his country…
President Nicos Anastasiades, elected three weeks ago with a pledge to negotiate a swift bailout, said refusal to agree to terms would have led to the collapse of the two largest banks.
“On Tuesday … We would either choose the catastrophic scenario of disorderly bankruptcy or the scenario of a painful but controlled management of the crisis,” Anastasiades said in written statement.
In several statements since his election, he had previously categorically ruled out a deposit haircut.
The fact that the new president had previously ruled out any kind of a wealth tax has a lot of people very, very upset. They feel like they were flat out lied to…
“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.”
But apparently the wealth confiscation could actually have been far worse. According to one report, the IMF and the EU were originally demanding a 40% wealth tax on bank account holders in Cyprus…
As the President of Cyprus proclaims to his people that “we’ should all take responsibility as his historic decision will “lead to the permanent rescue of the economy,” it appears that the settled-upon 9.9% haircut is a ‘good deal’ compared to the stunning 40% of total deposits that Germany’s FinMin Schaeuble and the IMF demanded.
Could you imagine?
How would you feel if you woke up someday and 40% of all your money had been taken out of your bank accounts?
At this point, there is still some doubt about whether this plan will actually be adopted or not.
Right now the new president of Cyprus does not have the votes that he needs, but you can be sure that there is some high level arm twisting going on.
Originally the vote was supposed to happen on Sunday, but it was delayed until Monday to allow for some extra “persuading” to be done.
And of course the people of Cyprus are overwhelmingly against this wealth tax. In fact, one poll found that 71 percent of the entire population of Cyprus wants this plan to be voted down.
The funny thing is that Cyprus is not even in that bad of shape.
The unemployment rate is around 12 percent, but in other European nations such as Greece and Spain the unemployment rate is more than double that.
Cyprus has a debt to GDP ratio of about 87 percent, but the United States has a debt to GDP ratio of well over 100 percent.
So if they will go directly after bank accounts in Cyprus, what will stop them from going after bank accounts in larger nations when the time comes?
In the final analysis, this is a game changer. No longer will any bank account in the western world be considered to be 100 percent safe.
Trust is a funny thing. It takes a long time to build, but it can be destroyed in a single moment.
Trust in European banks has now been severely damaged, and that damage is not going to be undone any time soon.
A recent blog post by the CEO of Saxo Bank, Lars Christensen, did a great job of explaining how incredibly damaging this move by the IMF and the EU truly is…
This is a breach of fundamental property rights, dictated to a small country by foreign powers and it must make every bank depositor in Europe shiver. Although the representatives at the bailout press conference tried to present this as a one-off, they were not willing to rule out similar measures elsewhere – not that it would have mattered much as the trust is gone anyway. It is now difficult to expect any kind of limitation to what measures the Troika and EU might take when the crisis really starts to bite.
if you can do this once, you can do it again. if you can confiscate 10 percent of a bank customer’s money, you can confiscate 25, 50 or even 100 percent. I now believe we will see worse as the panic increases, with politicians desperately trying to keep the EUR alive.
Depositors in other prospective bailout countries must be running scared – is it safe to keep money in an Italian, Spanish or Greek bank any more? I dont know, must be the answer. Is it prudent to take the risk? You decide. I fear this will lead to massive capital outflows from weak Eurozone countries, just about the last thing they need right now.
This is the biggest moment that we have witnessed since the beginning of the European financial crisis.
Financial authorities in Europe could try to calm nerves by at least pretending that this will never happen again in any other country, but so far they are refusing to do that…
Jeroen Dijsselbloem, president of the group of euro-area ministers, on Saturday declined to rule out taxes on depositors in countries beyond Cyprus, although he said such a measure was not currently being considered.
Such a measure is “not currently being considered” for other members of the eurozone?
Yeah, that sure is going to make people feel a lot more confident in what is coming next.
The banksters have sent a very clear message. When the chips are down, they are going to come after YOUR money.
Is the financial rape of Cyprus another IMF riot waiting to happen?
News that the International Monetary Fund initially demanded to loot a shocking 40% of savings from the private bank accounts of Cypriots underscores how residents of the Mediterranean country could be the latest victims of the infamous “IMF riot,” as the chief economist of the German Commerzbank calls for Italians to be similarly plundered for 15% of their savings.
Paul Joseph Watson
The government of Cyprus is set to vote tomorrow on enforcing a “tax,” which in reality is nothing less than a confiscation of private wealth, that would hit savers with between 100,000 to 500,000 euros with a levy of 9.9%. Those with over half a million euros will face an even higher rate of 15%.
However, the scale of the robbery could have been far higher. As Zero Hedge reports, “It appears that the settled-upon 9.9% haircut is a ‘good deal’ compared to the stunning 40% of total deposits that Germany’s FinMin Schaeuble and the IMF demanded.”
Now that the dictatorial EU and IMF have simply set about stealing the privately accrued wealth of lifetime savers in Europe, everyone is asking one question – who’s next?
Joerg Kraemer, chief economist of the German Commerzbank, has called for private savings accounts in Italy to be similarly plundered. “A tax rate of 15 percent on financial assets would probably be enough to push the Italian government debt to below the critical level of 100 percent of gross domestic product,” he told Handelsblatt.
Although many Cypriots reacted with an anger over the theft of their savings, with one man threatening to drive a bulldozer into his local bank, the reaction has so far been noticeably calmer than one would expect in a country like Italy, which has already been hit with violent anti-austerity riots over the past year.
Are we now seeing yet another example of the “IMF riot” – where the banking elite deliberately fosters social dislocation as a ruse to seize control of a nation’s economy and begin the process of asset stripping, just as happened in Greece and Argentina? Are Cyprus and Italy now in the crosshairs?
As respected investigative reporter Greg Palast exposed in 2001, the global banking elite, namely the World Bank and the IMF, have honed a technique that has allowed them to asset-strip numerous other countries in the past – that technique has come to be known at the “IMF riot.”
In April 2001, Palast obtained leaked World Bank documents that outlined a four step process on how to loot nations of their wealth and infrastructure, placing control of resources into the hands of the banking elite.
One of the final steps of the process, the “IMF riot,” detailed how the elite would plan for mass civil unrest ahead of time that would have the effect of scaring off investors and causing government bankruptcies.
“This economic arson has its bright side – for foreigners, who can then pick off remaining assets at fire sale prices,” writes Palast, adding, “A pattern emerges. There are lots of losers but the clear winners seem to be the western banks and US Treasury.”
How long before the crisis engendered by the looting forces Cyprus to sell its precious assets in return for IMF debt, just as Greece has been doing over the last three years?
The looting of Cyprus, erroneously labeled a “tax,” has been spun by the Cypriot government, the IMF, the EU and the establishment financial media as a necessary evil to prevent the country’s banks going bust and the nation collapsing into bankruptcy.
Firstly, as Mark J. Grant explains, describing the maneuver as a “tax” is an insult to reality.
“Let’s be quite clear; the European Union has confiscated the private property of the citizens in Cyprus without debate, legislation or Parliamentary agreement,” he writes.
“A bank account is not a bond or a stock or any sort of investment. This seems to be lost on many people. A bank account is the private property of a citizen or a corporation and does not belong to the government or at least that was the supposition up until now in Europe.”
Secondly, the doomsday proclamation about Cyprus collapsing if the government is not allowed to loot private bank accounts is merely a cover story to justify what represents a brazen act of mass financial rape.
Instead of protecting the bankers responsible for the crisis while pillaging the people who bear no responsibility whatsoever for the debt, Cyprus should be following in the footsteps of Iceland.
Instead of bailing out bankers, Iceland arrested them. Instead of targeting its population with brutal austerity measures, Iceland paid off people’s underwater mortgages. Iceland also allowed people to pay off debts in foreign currency, which were declared illegal, with the devalued krona.
The result was that Icelanders had more money in their pocket, reinvested it into the economy and now the country has enjoyed a miracle financial turnaround.
The Cypriot government has seemingly chosen a different option – selling out its people to the gaping jaws of the European Union and the IMF and setting the stage for years of economic turmoil, civil unrest and dependency on a financial dictatorship which benefits not from stability but from sustained chaos.