Help, Not Kill Cyprus
19/03/2013
Before World War II the German Nazis have nationalized Jewish bank deposits claiming various grounds including that the Jews were involved in «dirty dealings». On December 21, 2012 Mr Schneider of SDP announced that the money of German taxpayers will not secure illegal bank deposits of Russians in Cyprus. On March 16, 2013 German Chancellor Angela Merkel said that those responsible (for the Cyprus insolvency) will have to pay, not just European tax payers. Why are Russian bank depositors being singled out and held responsible for Euro zone problems? Cyprus banks lost money not because of the Russians but because of the terms on which Euro zone officials decided to restructure Greek debt to protect European investment inGreece. This has nothing to do with the Russians. To the contrary, thanks to Russian money, in the last ten years Cyprus has developed into a modern European country and joined the Euro zone from which it is now receiving problems. On what legal basis do German officials call all Russian bank deposits in Cyprus illegal? The answer to all these questions is clear. German government officials are pushing an illegal scheme aimed at discrimination against Russian bank depositors for the simple reason thatRussiahas no voice in Europe because it is not a EU member. And neither does Cyprus, evidently, although it is a EU member, because it is small. Germanyis pushing Cyprus to confiscate Russian bank deposits (many of them Jewish, by the way) and to make this look better some German officials are claiming publicly that Russian money in Cyprusis illegal. I guess, being a Russian or Ukrainian makes it illegal according to some Germans. The Minister of Finance of Germany, aided by the minister of finance of the Netherlands and Finland, have developed an illegal scheme and black mailed Cyprus government with an ultimatum: rob the Russians or be killed. Cyprus is stuck between the old friend (Russia) and the new EU partners (who are not so friendly now) who are willing to giveCyprus some money if Cyprus forgets the old friend. This is nothing but a Cold War thinking which incidentally puts Europe on the brink of recession again because from now on everybody knows: not one bank deposit in Europe is safe while this German government is calling the shots in the EU. EU is willing to sustain stability of the banks and give as much money as needed to the banks in order to cover any amount that will flow out of the banks and maintain liquidity the day the banks will open which will naturally be HIGHER than 6 Billion which ECB is not willing to give now. The matter is not financial but rather political against Russia and Cyprus. First, EU has to wake up and stop this nonsense of expropriating bank deposits through confiscatory taxation. EU cannot hold together if, at the crucial moment, its decisions are made from a national (German) rather than all-European point of view. Second,Russia has to stand up to Germany and fight back. International law provides good basis for holding governments and individual officials liable for inducing expropriation. Third,Russia should help Cyprus financially. Cyprus needs 16 Billion Euros. Europe is willing to give 10 Billion Euros. Russia should loan the other 6 Billion Euros and secure this loan with rights to offshore gas reserves which have been discovered inCyprusrecently.Cyprus could also collateralize the loan with land and real estate and bank stocks. Confiscation of bank deposits will kill Cyprus economy. If the «levy» on deposits is imposed this week, on the first banking day after everyone will transfer what is left of their money out of Cyprus. Nobody will ever start a bank account in this country again. Cypriots will have to go back to the hills as farmers. A beautiful European nation will be thrown back to the Middle Ages. A proper solution for Cyprus should instead involve all interested parties including Russia. Such solution should promote further development of Cyprus so that the country can pay back its debts rather than stiffle business opportunity and kill the banking system. A loan should be made to Cyprus secured by its mineral resources, land, real estate and banking stocks. These interests should then be securitized and privatized. Private interests will then drive the further economic development of Cyprus which will make the creditors happy and make Cypriot people a wealthy nation again. Dimitry Afanasiev Chairman Egorov Puginsky Afanasiev and Partners, the largest law firm in Russia,Ukraine and Belarus
35 comments
on 19/03/2013
I enjoyed your article.
It would be nice to have a firm commitment from Russia in order to achieve a different outcome.
Without such a firm commitment we are out of options...
It would be nice to have a firm commitment from Russia in order to achieve a different outcome.
Without such a firm commitment we are out of options...
on 19/03/2013
well said. couldn't agree more.
on 19/03/2013
"A proper solution for Cyprus should instead involve all interested parties including Russia. Such solution should promote further development of Cyprus so that the country can pay back its debts rather than stiffle business opportunity and kill the banking system. A loan should be made to Cyprus secured by its mineral resources, land, real estate and banking stocks. These interests should then be securitized and privatized. Private interests will then drive the further economic development of Cyprus which will make the creditors happy and make Cypriot people a wealthy nation again."
I just quoted your last paragraph. No need to say any further.
I just quoted your last paragraph. No need to say any further.
on 19/03/2013
This is excacly how thinks are. Excelent article. Thank you.
on 19/03/2013
Very well said, Mr. Afanasiev. But how fast can Russia act, if decides to assist Cyprus, in order to prevent a death foretold?
on 19/03/2013
Excellent ideas, Chairman Afanasiev.
But why were they nor proposed - and implemented - last year when ex-president Christofias was desperately asking for help from the Russian Federation? It was the Russian Federation that then insisted that any help should come through the Troika.
Has there been a policy change? Is this a message from the RF?
But why were they nor proposed - and implemented - last year when ex-president Christofias was desperately asking for help from the Russian Federation? It was the Russian Federation that then insisted that any help should come through the Troika.
Has there been a policy change? Is this a message from the RF?
on 19/03/2013
This is actually a responsible point of view by Mr Afanasiev. The option for Cyprus should be clear, either EU help us as an equal member or Cyprus should declare bankrupt leaving all other EU members exposed to consequences. If they don't help us we should not help them, is simple as that. If they want us to suffer, they should also suffer the consequences of their decisions.
on 19/03/2013
Very well said. Thank you for sharing it with us.
on 19/03/2013
Dimitry
Very well said, and we all agree. We would like though that our 'old friend' now shows tomorrow its true friendship to the Cyprus Minister of Finance by offering finacial assistance especially since the EU has now played its hand. Even better, if Russia lends Cyprus 17bn then this country avoids the Troika altogether, and will strengthen even further the ties with Russia.
Very well said, and we all agree. We would like though that our 'old friend' now shows tomorrow its true friendship to the Cyprus Minister of Finance by offering finacial assistance especially since the EU has now played its hand. Even better, if Russia lends Cyprus 17bn then this country avoids the Troika altogether, and will strengthen even further the ties with Russia.
on 19/03/2013
"Going back to the hills as farmers" is a bit harsh comment.
Who said Troika will give 10bn if other 6 is taken as a loan from Russia?
Merkel clearly said, Cyprus should seek financial help only from EU & IMF.
This is a deliberate and forceful downsize of bank sector imposed by Germany. This "Cyprus project" which is a question of few billions is actually costing EU tens of billions and it looks like they won't step back until its downsized.
Who said Troika will give 10bn if other 6 is taken as a loan from Russia?
Merkel clearly said, Cyprus should seek financial help only from EU & IMF.
This is a deliberate and forceful downsize of bank sector imposed by Germany. This "Cyprus project" which is a question of few billions is actually costing EU tens of billions and it looks like they won't step back until its downsized.
on 19/03/2013
Downsizing is the requirement. We will not get there from a loan from Russia. The real choice is to choose between Europe or Russia. The irony is, if we choose Russia, the first to leave us will be the Russians who are now in Cyprus.
on 20/03/2013
I am afraid Savvakis is right! We have deep historical roots with Russia and consider them our closest friend and allies. However, the fact of the matter is that right now we are Forced to Choose between Europe and Russia. Maybe this is a political decision and not an economical... but maybe we simply took too long to make a solid decision about our economy... as a result we are forced to destroy our Business Model! History will show!
on 19/03/2013
Great article with good a good historical perspective. Thank you for your understanding and support. Undoubtely there's a lot more going on here than just economics. There is no other way to explain why the EU/ECB put the credibility of its entire banking system at risk; saving 6 billion, or 50 for that matter, does not explain it.
It is our hope that Russia, steps up to the plate and puts up the remaining 6 billion that is needed. Assuming that Russia moves fast enough to help Cyprus to overcome our current situation, then there are some structural issues that may present a problem with your proposal. In particular, if Russia comes in as a loan, then it seems to me that the Cyprus debt increases to what IMF may deem unsustainable and back out of the deal. Second, if the Russian debt is secured while the Troika debt is not, then Troika may protest, as it will automatically become subordinated to Russia. ... But all this is technical ... I am sure that if Russia is willing to put up the money to help a friend, its depositors and to firm its footing in the area, we will be able to work out a solution.
It is our hope that Russia, steps up to the plate and puts up the remaining 6 billion that is needed. Assuming that Russia moves fast enough to help Cyprus to overcome our current situation, then there are some structural issues that may present a problem with your proposal. In particular, if Russia comes in as a loan, then it seems to me that the Cyprus debt increases to what IMF may deem unsustainable and back out of the deal. Second, if the Russian debt is secured while the Troika debt is not, then Troika may protest, as it will automatically become subordinated to Russia. ... But all this is technical ... I am sure that if Russia is willing to put up the money to help a friend, its depositors and to firm its footing in the area, we will be able to work out a solution.
on 19/03/2013
Your comparison with the expropriation of Jews during Nazi Germany and a hair cut on depositors in Cyprus is absolutely inappropriate and indicating that this might be happening again because there are also Jews among the depositors in Cyprus is simply a joke. It is clear from where that comes...
If you invest into a high yield bond you accept the credit risk because of higher rates. If you borrow your money to Cyprus banks because you do not want to pay taxes, or you need to launder the money, or because you are afraid that it is not safe in your own country - guess what. You take a risk. If you think you are only exposed to interest rate risk and neglect credit risk by betting that Cyprus will be bailed out - guess what. Misjudgment.
More importantly, this has nothing to do with ethnicity as you suggested - but clearly with a misjudgment of actual risks, which is ignorant of races and ethnicities...
If you invest into a high yield bond you accept the credit risk because of higher rates. If you borrow your money to Cyprus banks because you do not want to pay taxes, or you need to launder the money, or because you are afraid that it is not safe in your own country - guess what. You take a risk. If you think you are only exposed to interest rate risk and neglect credit risk by betting that Cyprus will be bailed out - guess what. Misjudgment.
More importantly, this has nothing to do with ethnicity as you suggested - but clearly with a misjudgment of actual risks, which is ignorant of races and ethnicities...
on 19/03/2013
Well said Peter.
on 19/03/2013
Hey, we are talking about a haircut for ALL ACCOUNTS in CYPRUS. A Haircut for all balances, including current individual and corporate accounts. What INCOME are you referring to? It is a robbery by Frau Merkel aiming at EU dictatorship with a nostalgy for a Great Germany.......
on 19/03/2013
Agreed that current accounts are not the same as, say, a time deposit. Doesn't mean they should not get a haircut but maybe there should be a multiple-tier system to decide the size of the haircut for different account categories.
This tiering system can be based on the risk assumed by the depositor (as measured by the interest rate for example) and on the potential impact on the real economy (couple of broad categories based on the "nature" of the deposit holder).
The more complicated you make the system though, the more prone I expect you would become to legal challenges...but I am just making assumptions here, I know nothing about the relevant laws.
This tiering system can be based on the risk assumed by the depositor (as measured by the interest rate for example) and on the potential impact on the real economy (couple of broad categories based on the "nature" of the deposit holder).
The more complicated you make the system though, the more prone I expect you would become to legal challenges...but I am just making assumptions here, I know nothing about the relevant laws.
on 19/03/2013
You sound like Peter Spiegel of FT. You, obviously, have not read the article.
on 20/03/2013
I don’t like the totality of your replies P.
Are you referring to a credit default risk? Concentration risk ? Country risk ? What do you mean by credit risk?
Because the only risk I currently see is a sovereign risk imposed by EU lawmakers which has nothing to do with our banking system.
And how a high yield bond is doomed to be exposed on interest rate risk ? Our bonds escalated way too fast into high-yield ones (below investment grade) because of the hammering we took from S&P,Moodys etc to serve other foreigh interests.
Deleveraging a banking system by betraying depositors and investors trusts will only drag a financial market down the hole.
Are you referring to a credit default risk? Concentration risk ? Country risk ? What do you mean by credit risk?
Because the only risk I currently see is a sovereign risk imposed by EU lawmakers which has nothing to do with our banking system.
And how a high yield bond is doomed to be exposed on interest rate risk ? Our bonds escalated way too fast into high-yield ones (below investment grade) because of the hammering we took from S&P,Moodys etc to serve other foreigh interests.
Deleveraging a banking system by betraying depositors and investors trusts will only drag a financial market down the hole.
on 19/03/2013
Agreed, it is unfair to single out Russians and call their money illegal, etc...German politicians are motivated only by (a) local election cycles, (b) their own experiences coming out of WWII, and (c) making competing economies less competitive and none of those motives is particularly well-aligned with the best interests of Europe.
And that pretty much sums up the extent to which I agree with the article. "Cypriots will have to go back to the hills as farmers"...not by a long shot, but it's good to know how you think of us and of our potential to exist without Russian money.
The Cypriot banking sector doubled in size since 2003 and there is nothing wrong with it going back to that smaller level. If I recall correctly the economy was doing ok back then, but then again I don't have the numbers on the distribution between farming and other sectors of employment, so I could be wrong.
The holders of uninsured deposits in Cyprus have been enjoying some of the highest interest rates in Europe since the crisis begun, and these high cost funds are raising interest rates on borrowers and thus putting a stranglehold on local economic activity.
Something that many of these uninsured depositors know a lot better than the small insured ones, is that the interest rate is a reflection of liquidity and default risk. In other words, the bank is under no obligation to guarantee the safety of these deposits, they are an investment in a RISKY asset, and this is exactly why the depositors expect to be compensated in the form of an interest rate. Well, now the RISKY asset is not performing well and the depositor loses part of their investment, such is the nature of risk; the depositor will get over it and move on with their lives.
And by the way, some 10 billion euros or more in bank deposits from non-EU (mostly Russian) nationals entered Cyprus since the onset of the crisis in 2008. That money did not come on a mission to save Cypriots from going back to being farmers, it came because the interest rates were among the highest in Europe. Let the money go back to wherever it came from and we'll be just fine.
And, no, the safety of deposits was never the cornerstone of a well-functioning banking system, the safety of INSURED deposits is, which is exactly why we should protect insured depositors 100%, and let uninsured depositors take a hit. In the process,we will need to get over our fixation on not wanting to impose a haircut over 10% on uninsured deposits, but I think we can do that.
Will every foreign deposit leave Cyprus. No, of course not. Will every single off-shore company leave Cyprus? No, of course not. Companies who had a presence in Cyprus due to the legal framework, low tax scheme (at 12.5% it is still low), and access to well-trained personnel still have all of that. Depending on the size of their deposits some will be hurt more than others. Depending on the size of the revenue they collected from interest over the past few years some will care less than others.
Some money, Russian or otherwise, should leave Cyprus and that is an excellent outcome. Our banks simply cannot find enough good projects to invest the money in. The ECB should step in to guarantee unlimited liquidity, to save the banks from collapsing due to illiquidity (not due to insolvency) and hopefully drive down the borrowing costs in the process. A large deposit costing 8% or so leaves the balance sheet and is substituted by lower cost ECB funding, as simple as that.
The non-performing assets should be put aside in a bank capitalized by the shares given in exchange for the haircut. In an aggregate accounting sense this separation is very similar to the case where the non-performing loans and corresponding shares stay on the banks' balance sheets, but offers the advantage that it clearly indicates where the risk is; in these "bad" banks that is. This approach deals directly with issues of asset opacity that future investors in the Cyprus economy and/or in Cypriot banks will have to deal with,
Once the banking system is clear, the question is how do we ensure that the economy will be performing well enough to guarantee that this was a one-off measure? Well, not sure anybody can guarantee growth at this stage. But the government debt and associated servicing costs are now lower than they would have been otherwise, the banking sector is smaller, the funding costs are lower, the banks are solvent; this is not a terribly bad place to be in.
I appreciate the sense of injustice and anger a Russian national can feel when they read the kinds of labels that Westerners are all too eager to attach to Russian businessmen and Russian people in general, but god forbid if we as Cypriots let anger and the fear of going "back to the hills as farmers" dictate our economic policy.
And that pretty much sums up the extent to which I agree with the article. "Cypriots will have to go back to the hills as farmers"...not by a long shot, but it's good to know how you think of us and of our potential to exist without Russian money.
The Cypriot banking sector doubled in size since 2003 and there is nothing wrong with it going back to that smaller level. If I recall correctly the economy was doing ok back then, but then again I don't have the numbers on the distribution between farming and other sectors of employment, so I could be wrong.
The holders of uninsured deposits in Cyprus have been enjoying some of the highest interest rates in Europe since the crisis begun, and these high cost funds are raising interest rates on borrowers and thus putting a stranglehold on local economic activity.
Something that many of these uninsured depositors know a lot better than the small insured ones, is that the interest rate is a reflection of liquidity and default risk. In other words, the bank is under no obligation to guarantee the safety of these deposits, they are an investment in a RISKY asset, and this is exactly why the depositors expect to be compensated in the form of an interest rate. Well, now the RISKY asset is not performing well and the depositor loses part of their investment, such is the nature of risk; the depositor will get over it and move on with their lives.
And by the way, some 10 billion euros or more in bank deposits from non-EU (mostly Russian) nationals entered Cyprus since the onset of the crisis in 2008. That money did not come on a mission to save Cypriots from going back to being farmers, it came because the interest rates were among the highest in Europe. Let the money go back to wherever it came from and we'll be just fine.
And, no, the safety of deposits was never the cornerstone of a well-functioning banking system, the safety of INSURED deposits is, which is exactly why we should protect insured depositors 100%, and let uninsured depositors take a hit. In the process,we will need to get over our fixation on not wanting to impose a haircut over 10% on uninsured deposits, but I think we can do that.
Will every foreign deposit leave Cyprus. No, of course not. Will every single off-shore company leave Cyprus? No, of course not. Companies who had a presence in Cyprus due to the legal framework, low tax scheme (at 12.5% it is still low), and access to well-trained personnel still have all of that. Depending on the size of their deposits some will be hurt more than others. Depending on the size of the revenue they collected from interest over the past few years some will care less than others.
Some money, Russian or otherwise, should leave Cyprus and that is an excellent outcome. Our banks simply cannot find enough good projects to invest the money in. The ECB should step in to guarantee unlimited liquidity, to save the banks from collapsing due to illiquidity (not due to insolvency) and hopefully drive down the borrowing costs in the process. A large deposit costing 8% or so leaves the balance sheet and is substituted by lower cost ECB funding, as simple as that.
The non-performing assets should be put aside in a bank capitalized by the shares given in exchange for the haircut. In an aggregate accounting sense this separation is very similar to the case where the non-performing loans and corresponding shares stay on the banks' balance sheets, but offers the advantage that it clearly indicates where the risk is; in these "bad" banks that is. This approach deals directly with issues of asset opacity that future investors in the Cyprus economy and/or in Cypriot banks will have to deal with,
Once the banking system is clear, the question is how do we ensure that the economy will be performing well enough to guarantee that this was a one-off measure? Well, not sure anybody can guarantee growth at this stage. But the government debt and associated servicing costs are now lower than they would have been otherwise, the banking sector is smaller, the funding costs are lower, the banks are solvent; this is not a terribly bad place to be in.
I appreciate the sense of injustice and anger a Russian national can feel when they read the kinds of labels that Westerners are all too eager to attach to Russian businessmen and Russian people in general, but god forbid if we as Cypriots let anger and the fear of going "back to the hills as farmers" dictate our economic policy.
on 20/03/2013
Forgive me for asking this: but is it not due to russian money that cypriot farmers became "developers"? Is it not because of russian money that the banks were giving loans left and right without proper credit diligence on the cypriots? So, if Russians take their money what happens to the billions of unsustainable loans handed out to credit unworthy Cypriots? The banks will surely close down then.
Yes, the banking sector of Cyprus got big because of the large Russian deposits, but didn't the Cypriots and the Cyprus economy benefit from it? If the Cypriot did not know how to handle these large deposits why did they accept it in the first place?
Yes, the banking sector of Cyprus got big because of the large Russian deposits, but didn't the Cypriots and the Cyprus economy benefit from it? If the Cypriot did not know how to handle these large deposits why did they accept it in the first place?
on 20/03/2013
Not sure I understand your point. Yes, these additional deposits inflated bubbles and yes the banks should not have taken that money in to begin with, and too bad for the uninsured depositors that they invested in a RISKY asset and now see the downside of risk.
Having the Russian deposits on your balance sheet does not make you any more solvent, which is why the haircut should happen. If that means some developers go back to farming then so be it. And if we were all farmers before Russian capital came in then why on earth was Russian capital flying into our banks to begin with? That sounds kind of risky doesn't it?
If the deposits are withdrawn, as they most surely will, then some temporary source of liquidity will be sought as a substitute until some of the assets start maturing. That's where the ECB jumps in and they'd be very happy to do so since the banks will now be solvent.
Having the Russian deposits on your balance sheet does not make you any more solvent, which is why the haircut should happen. If that means some developers go back to farming then so be it. And if we were all farmers before Russian capital came in then why on earth was Russian capital flying into our banks to begin with? That sounds kind of risky doesn't it?
If the deposits are withdrawn, as they most surely will, then some temporary source of liquidity will be sought as a substitute until some of the assets start maturing. That's where the ECB jumps in and they'd be very happy to do so since the banks will now be solvent.
on 19/03/2013
Again, Mr. Afanasiev, please clarify the status quo: As I know, we are talking about a haircut for entire Cypriot banking system including balances on corpotate checking accounts. How fair it is? Or am I being wrong? I have info from a big 4 partner located in Cyprus....
on 19/03/2013
Dear Dimitry,
Your ethnicity comparison is purely and simply disgraceful.
Question:
As a Russian, could you elaborate on why would you "start" a bank account in Cyprus in the first place?
Answer:
Because of the clear tax benefits.
Note:
Your gamble, your loss. No one else should pay for it.
Think of it as a one-off 15% tax rate. Over 15 years I say that's actually a pretty sweet deal for you tax avoiders.
PS: Nothing to do with jews / nazism / germans
Your ethnicity comparison is purely and simply disgraceful.
Question:
As a Russian, could you elaborate on why would you "start" a bank account in Cyprus in the first place?
Answer:
Because of the clear tax benefits.
Note:
Your gamble, your loss. No one else should pay for it.
Think of it as a one-off 15% tax rate. Over 15 years I say that's actually a pretty sweet deal for you tax avoiders.
PS: Nothing to do with jews / nazism / germans
on 19/03/2013
ΜΟΛΙΣ ΤΩΡΑ ΒΛΕΠΩ ΣΤΟ ΣΙΓΜΑ ΤΟΝ .....ΚΥΡΙΟ ΟΡΦΑΝΙΔΗ ! ΤΟΝ ΘΥΜΑΣΤΕ ? ΝΑΙ ΑΥΤΟΣ ΠΟΥ ΜΑΣ ΚΑΤΕΣΤΡΕΨΕ ΚΑΛΕ ! ΑΥΤΟΣ ΠΟΥ ΜΑΣ ΔΙΑΒΕΒΑΙΩΝΕ ΟΤΙ ΣΕ ΚΑΜΜΙΑ ΠΕΡΙΠΤΩΣΗ ΟΙ ΤΡΑΠΕΖΕΣ ΔΕΝ ΔΙΑΤΡΕΧΟΥΝ ΚΑΝΕΝΑ ΚΥΝΔΙΝΟ ?? ΑΥΤΟΣ ΠΟΥ ΕΠΕΤΡΕΨΕ ΝΑ ΜΑΣ ΦΟΡΤΩΘΟΥΝ ΕΛΕΩ ΕΓΝΑΤΙΑΣ 4 ΔΙΣ ΧΡΕΗ ??
ΛΟΙΠΟΝ Ο ΚΥΡΙΟΣ ΑΥΤΗ ΤΗ ΣΤΙΓΜΗ ΜΙΛΑ ΣΤΟ BLOOMBERG ΚΑΙ ΤΙ ΛΕΕΙ ΣΑΣ ΠΑΡΑΚΑΛΩ ΓΙΑ ΤΗΝ ΚΡΙΣΗ ???
ΟΧΙ,ΟΧΙ ΔΕΝ ΦΤΑΙΕΙ Ο ΧΡΙΣΤΟΦΙΑΣ ! ΕΙΝΑΙ ΣΥΣΤΗΜΙΚΗ ΛΕΕΙ !!! ΠΙΣΤΕΨΤΕ ΤΟ !! ΤΩΡΑ Ο ΧΡΙΣΤΟΦΙΑΣ ΕΦΥΓΕ ΜΠΟΡΟΥΜΕ ΝΑ ΛΕΜΕ ΚΑΙ ..ΕΠΙΣΤΗΜΟΝΙΚΕΣ ΑΛΗΘΕΙΕΣ!!!! ΑΛΛΩΣΤΕ ΤΟ ΛΕΕΙ ΟΛΟΣ Ο ΚΟΣΜΟΣ ΚΑΙ ΟΙΚΟΝΟΜΟΛΟΓΟΙ ΚΑΙ ΠΟΛΙΤΙΚΟΙ ΔΙΕΘΝΩΣ !!
ΛΟΙΠΟΝ Ο ΚΥΡΙΟΣ ΑΥΤΗ ΤΗ ΣΤΙΓΜΗ ΜΙΛΑ ΣΤΟ BLOOMBERG ΚΑΙ ΤΙ ΛΕΕΙ ΣΑΣ ΠΑΡΑΚΑΛΩ ΓΙΑ ΤΗΝ ΚΡΙΣΗ ???
ΟΧΙ,ΟΧΙ ΔΕΝ ΦΤΑΙΕΙ Ο ΧΡΙΣΤΟΦΙΑΣ ! ΕΙΝΑΙ ΣΥΣΤΗΜΙΚΗ ΛΕΕΙ !!! ΠΙΣΤΕΨΤΕ ΤΟ !! ΤΩΡΑ Ο ΧΡΙΣΤΟΦΙΑΣ ΕΦΥΓΕ ΜΠΟΡΟΥΜΕ ΝΑ ΛΕΜΕ ΚΑΙ ..ΕΠΙΣΤΗΜΟΝΙΚΕΣ ΑΛΗΘΕΙΕΣ!!!! ΑΛΛΩΣΤΕ ΤΟ ΛΕΕΙ ΟΛΟΣ Ο ΚΟΣΜΟΣ ΚΑΙ ΟΙΚΟΝΟΜΟΛΟΓΟΙ ΚΑΙ ΠΟΛΙΤΙΚΟΙ ΔΙΕΘΝΩΣ !!
on 20/03/2013
Μα δεν είναι αυτό που ισχυρίζεσαι ότι εννοούσε ο Ορφανίδης.Και βέβαια η κρίση είναι συστημική.Μάλιστα εμείς προσπαθούμε να ''τρομάξουμε'' την Τρόικα ότι ο κίνδυνος απο τη χρεωκοπία της Κύπρου, είναι συστημικός για όλη την ευρωζώνη.Απο αυτό το σημείο όμως,μέχρι να ισχυρίζεσαι ότι αθωώνει το Χριστόφια,ε έχει μιά διαφορά.
on 19/03/2013
I don't understand why every Russian in Cyprus is considered a tax avoider/evader.
What is everybody stuck on this impression?
What is everybody stuck on this impression?
on 19/03/2013
Dear Dimitry
1.Farming in Cyprus is not practiced on the hills but on flat land areas.
2. You said the following " Confiscation of bank deposits will kill Cyprus economy. If the «levy» on deposits is imposed this week, on the first banking day after everyone will transfer what is left of their money out of Cyprus."
You are wrong , absolutely wrong. Will now, after we said NO, anyone trust our BANKS ?? Everyone knows that Banks need 6 billion as capital which they now do not have because we said NO. Everyone now knows that Cypriot banks are not safe . You now think that Russians or even Cypriots will leave their deposits in Cypriot banks?? Russian and local capital will leave Cyprus anyway .
Thursday IF banks open , will be a day to be remembered for years, A day to use in Universities in the future.....
I hope that the European Central Bank will not stop the liquidity assistance to our Banking system in the next days..........this is our only hope to minimize the damage........
1.Farming in Cyprus is not practiced on the hills but on flat land areas.
2. You said the following " Confiscation of bank deposits will kill Cyprus economy. If the «levy» on deposits is imposed this week, on the first banking day after everyone will transfer what is left of their money out of Cyprus."
You are wrong , absolutely wrong. Will now, after we said NO, anyone trust our BANKS ?? Everyone knows that Banks need 6 billion as capital which they now do not have because we said NO. Everyone now knows that Cypriot banks are not safe . You now think that Russians or even Cypriots will leave their deposits in Cypriot banks?? Russian and local capital will leave Cyprus anyway .
Thursday IF banks open , will be a day to be remembered for years, A day to use in Universities in the future.....
I hope that the European Central Bank will not stop the liquidity assistance to our Banking system in the next days..........this is our only hope to minimize the damage........
on 19/03/2013
Dmitry,
While I agree with you on some substantive points, your comparison between confiscation of Jewish money by Nazis and the present situation in Cyprus is disgraceful and inappropriate. Your rhetoric singling out Germany is also unhelpful and insulting. There is a huge difference between confiscating all of the deposits from people of only one ethnicity/religion which took place the Nazi Germany from taking a 10-15% cut from all of the depositors in exchange for shares in the banks and certain government bonds.
I am not saying that the present EU solution is wise. Far from that, it makes very little sense and puts tremendous stress on the financial system. I absolutely agree that the end result of this move will be general loss of trust in the European banking system. Indeed, Russia may now save Cyprus. But if it does so, it should do it with a number of conditions. The most important being is for Cyprus to exit the Euro system. Until Cyprus is in Euro, no support from Russia would be effective.
However this is done, it's important to remain calm and refrain from scandalous and appropriate accusations and inappropriate comparisons.
While I agree with you on some substantive points, your comparison between confiscation of Jewish money by Nazis and the present situation in Cyprus is disgraceful and inappropriate. Your rhetoric singling out Germany is also unhelpful and insulting. There is a huge difference between confiscating all of the deposits from people of only one ethnicity/religion which took place the Nazi Germany from taking a 10-15% cut from all of the depositors in exchange for shares in the banks and certain government bonds.
I am not saying that the present EU solution is wise. Far from that, it makes very little sense and puts tremendous stress on the financial system. I absolutely agree that the end result of this move will be general loss of trust in the European banking system. Indeed, Russia may now save Cyprus. But if it does so, it should do it with a number of conditions. The most important being is for Cyprus to exit the Euro system. Until Cyprus is in Euro, no support from Russia would be effective.
However this is done, it's important to remain calm and refrain from scandalous and appropriate accusations and inappropriate comparisons.
on 20/03/2013
To JOKE and A,
We all agree that the banking sector has to downsize. However, this has to be done in an orderly way, and not through ''fire sales'' are we are now obliged to do compliments of Troika.
The taking of Risk you refer to has nothing to do what we are faced with.
The Troika has 'forced' on to Cyprus a crisis, which it should not have done so, by damaging two areas: (1) the banking and financial credibility, and (2) vindictlively the Russian customers of the banks who have nothing to do with the crisis.
We all agree that the banking sector has to downsize. However, this has to be done in an orderly way, and not through ''fire sales'' are we are now obliged to do compliments of Troika.
The taking of Risk you refer to has nothing to do what we are faced with.
The Troika has 'forced' on to Cyprus a crisis, which it should not have done so, by damaging two areas: (1) the banking and financial credibility, and (2) vindictlively the Russian customers of the banks who have nothing to do with the crisis.
on 20/03/2013
"fire sales" is a completely different concept, it involves asset sales under distress, and is not part of what is being discussed here, at least not in my comments it's not.
"obliged to do compliments of Troika"...not sure what you mean there, but I assume it has something to do with the Troika imposing its will on us. But take the Troika out of the picture, pretend we are back in the Cyprus pound, we decide for ourselves and we suddenly have an insolvent and oversized bank, and I would still more or less propose a haircut on uninsured funds as the way to go (after equity holders are wiped out).
The taking of risk has everything to do with depositing a huge amount in an uninsured account and expecting it to return x%, this is basic.
(1) and (2) I agree with.
"obliged to do compliments of Troika"...not sure what you mean there, but I assume it has something to do with the Troika imposing its will on us. But take the Troika out of the picture, pretend we are back in the Cyprus pound, we decide for ourselves and we suddenly have an insolvent and oversized bank, and I would still more or less propose a haircut on uninsured funds as the way to go (after equity holders are wiped out).
The taking of risk has everything to do with depositing a huge amount in an uninsured account and expecting it to return x%, this is basic.
(1) and (2) I agree with.
on 20/03/2013
To Gene a Joke.
The comparison is spot on. The german are truing to kill the cyprus economy. It is a plan that they have executed with precision. The fact they have not used guns does not make it any different. The Eurozone is the 4TH REICH. The new germanic empire. Mr van robai and Mr Dijsselbloem are the new Vichy regime.
If the only choise is bankrupcy we should take it. We will be doing the world a favour.
The comparison is spot on. The german are truing to kill the cyprus economy. It is a plan that they have executed with precision. The fact they have not used guns does not make it any different. The Eurozone is the 4TH REICH. The new germanic empire. Mr van robai and Mr Dijsselbloem are the new Vichy regime.
If the only choise is bankrupcy we should take it. We will be doing the world a favour.
on 20/03/2013
There are fine words in this proposal. As always, the proof of the pudding is in the eating - will non-loan funds now be available in a timely fashion from Russia and in exchange for exactly what? By all accounts, the IMF (of which Russia is a member) states that the maximum loan Cyprus could stand / sustain is €10Bn. From whom should the rest come and when?
on 21/03/2013
A great solution to the banking crisis is being published tomorrow morning in Politis newspaper ... read it NOW at https://sites.google.com/site/thecyprussolution/ by a serious and intelligent citizen who wishes to remain anonymous - I think this what all of us should be focusing on and "wake up and smell the roses" - great read, enjoy and think deeply about what you as a Cypriot want!
on 22/03/2013
EXCELLENT article, and with the guts to say things the way they REALLY re. !
The whole European agenda these days is actually run from Berlin and with absolutely no shame or attempt to hide it.
To say that Germany is playing hardball in order to obtain economically what it was not able to obtain militarily ages ago is an understatement. Unfortunately the entire European unification process is irreversibly broken and perhaps never really could work if it all boils down to pure power play like this, certainly it is going to collapse very soon unless the "rightful" northern Europeans understand that THEY will lose it all once Europe / Euro disintegrates and the southern nations are once again at the mercy of inflation but also can recover by re adjusting their manufacturing prices, !
All this is happening just as the technology shift to 3D printing, composite materials and so on makes it much less efficient to manufacture in China and the far east!
The whole European agenda these days is actually run from Berlin and with absolutely no shame or attempt to hide it.
To say that Germany is playing hardball in order to obtain economically what it was not able to obtain militarily ages ago is an understatement. Unfortunately the entire European unification process is irreversibly broken and perhaps never really could work if it all boils down to pure power play like this, certainly it is going to collapse very soon unless the "rightful" northern Europeans understand that THEY will lose it all once Europe / Euro disintegrates and the southern nations are once again at the mercy of inflation but also can recover by re adjusting their manufacturing prices, !
All this is happening just as the technology shift to 3D printing, composite materials and so on makes it much less efficient to manufacture in China and the far east!