20/03/2013 06:59
President of the Republic, Nicos Anastasiades will be discussing with the party leaders today the proposal for the nationalization of the provident funds in the semi-governmental and private sector against the issue of bonds associated with natural gas, after the rejection of the haircut of deposits by the Parliament and ahead of the deliberations of Michalis Sarris in Russia.
Audit and law firms that are under strong pressures by their Russian customers presented to the President yesterday an alternative solution that significantly reduces the amount of haircut close to 3%.
The main source of funding, according to this plan, is the provident funds that are estimated to have €3.5-4.5 billion.
The money will go to the state against the issue of bonds associated with future revenues from natural gas.
The details of the project will be elaborated thoroughly after talks with the political leaders. At noon, President Nicos Anastasiades will meet with the troika delegation to present the counterproposals of the Cypriot government to cover the €5,8 billion.
The proposal aims to crystallize the troika’s intentions - whether they consider politically necessary the haircut of the Russian depositors or whether there could be different ways to cover the amount without affecting the Russians.
Many legislators believe that the rejection of the bill by the House strengthens the negotiating position of Cyprus towards the troika.
Eurogroup President yesterday hastened to emphasize, however, that the proposal of cutting the €5,8 billion is still on the table, while the German Finance Minister expressed his regret for the rejection of the proposal.
They were both criticized inside and outside for their handling at the Eurogroup on Friday, mostly for their insistence on the haircut to insured depositors.
Yesterday evening, an ECB member said the Bank will inject liquidity to the local banks within the existing legal framework – for as long as it believes that banks are solvent. The termination of the emergency liquidity to banks of the eurozone seems to be decided by a qualified majority of 12 out of the 17 central bankers.
The deadline given to Cyprus Popular Bank expires tomorrow and the issue will be discussed in Frankfurt among the members of the board of directors.
The Cypriot side continues to hope for positive developments in Russia, where Michalis Sarris will have contacts with private entities and the Russian government.
The objective is to sell Cyprus Popular or the two large banks to the Russian government over compensation associated with the natural gas.
The Russian government still keeps distance from the developments, expressing its disagreement with the decisions taken at the Eurogroup.
President Anastasiades and Vladimir Putin had the opportunity yesterday to discuss developments in a half-hour telephone conversation.
With a possible acquisition of the banks from Russia, the recapitalization of the large banks will be solved but liquidity pressures will remain.
The CB, nevertheless, promotes alternative scenario for the consolidation of the two banks with the creation of a bad bank to which the bad assets and uninsured deposits will be transferred.
The CB Governor said yesterday in Parliament that this scenario involves much more heavy losses for the uninsured depositors than the haircut agreed at Eurogroup. He said that even in this case, the liquidity pressures may be forcing Cyprus to leave the euro, printing the Cypriot pound to inject liquidity to banks.
The Cyprus issue remains, however, a headline in the international media and seems to affect the markets.
The euro fell yesterday to its lowest level in three months.
The decision of the Eurogroup, notably the imposition of losses to insured depositors has generated negative comments about the handling of the eurozone crisis, rekindling market concerns.
Audit and law firms that are under strong pressures by their Russian customers presented to the President yesterday an alternative solution that significantly reduces the amount of haircut close to 3%.
The main source of funding, according to this plan, is the provident funds that are estimated to have €3.5-4.5 billion.
The money will go to the state against the issue of bonds associated with future revenues from natural gas.
The details of the project will be elaborated thoroughly after talks with the political leaders. At noon, President Nicos Anastasiades will meet with the troika delegation to present the counterproposals of the Cypriot government to cover the €5,8 billion.
The proposal aims to crystallize the troika’s intentions - whether they consider politically necessary the haircut of the Russian depositors or whether there could be different ways to cover the amount without affecting the Russians.
Many legislators believe that the rejection of the bill by the House strengthens the negotiating position of Cyprus towards the troika.
Eurogroup President yesterday hastened to emphasize, however, that the proposal of cutting the €5,8 billion is still on the table, while the German Finance Minister expressed his regret for the rejection of the proposal.
They were both criticized inside and outside for their handling at the Eurogroup on Friday, mostly for their insistence on the haircut to insured depositors.
Yesterday evening, an ECB member said the Bank will inject liquidity to the local banks within the existing legal framework – for as long as it believes that banks are solvent. The termination of the emergency liquidity to banks of the eurozone seems to be decided by a qualified majority of 12 out of the 17 central bankers.
The deadline given to Cyprus Popular Bank expires tomorrow and the issue will be discussed in Frankfurt among the members of the board of directors.
The Cypriot side continues to hope for positive developments in Russia, where Michalis Sarris will have contacts with private entities and the Russian government.
The objective is to sell Cyprus Popular or the two large banks to the Russian government over compensation associated with the natural gas.
The Russian government still keeps distance from the developments, expressing its disagreement with the decisions taken at the Eurogroup.
President Anastasiades and Vladimir Putin had the opportunity yesterday to discuss developments in a half-hour telephone conversation.
With a possible acquisition of the banks from Russia, the recapitalization of the large banks will be solved but liquidity pressures will remain.
The CB, nevertheless, promotes alternative scenario for the consolidation of the two banks with the creation of a bad bank to which the bad assets and uninsured deposits will be transferred.
The CB Governor said yesterday in Parliament that this scenario involves much more heavy losses for the uninsured depositors than the haircut agreed at Eurogroup. He said that even in this case, the liquidity pressures may be forcing Cyprus to leave the euro, printing the Cypriot pound to inject liquidity to banks.
The Cyprus issue remains, however, a headline in the international media and seems to affect the markets.
The euro fell yesterday to its lowest level in three months.
The decision of the Eurogroup, notably the imposition of losses to insured depositors has generated negative comments about the handling of the eurozone crisis, rekindling market concerns.
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