Cyprus parliament delays vote on deposit levy to Monday • Hacker News Board

Re: Cyprus parliament delays vote on deposit levy to Monday

#21

Post by bitcartel » Sun, Mar 17, 2013, 6:30 PM UTC

aristus wrote: post #3

Karunamon wrote: post #2

Maybe this is a terrifically ignorant comment, but it seems like the government mismanages their finances, as a result, they want the everyman to throw away 10% of their bank deposits? WTF?

The banks, not the govt. But the bailout as structured tends to conflate the two, which is part of the problem. Also it directly hurts retirees in country while protecting rich foreigners (eg, holders of Cypriot bank bonds). It's WTF from start to finish, a pretty shocking abuse of power by the rich northern EU countries. Fairness and good governance have nothing to do with it.

The UK will compensate some of its expats:

"But I can tell you that for people serving in our military, people serving our government out in Cyprus – because we have military bases there – we are going to compensate anyone who is affected by this bank tax. People who are doing their duty for our country in Cyprus will be protected from this Cypriot bank tax."

http://www.guardian.co.uk/world/2013/mar/17/cyprus-savings-l...

Re: Cyprus parliament delays vote on deposit levy to Monday

#22

Post by kyriakos » Sun, Mar 17, 2013, 6:33 PM UTC

kyriakos wrote: post #7

as a Cypriot who will lose part of his money I believe voting for this measure is the best of the two options even though both are bad for us.

The Cypriot government during the loan negotiations at Eurogroup on Friday was essentially blackmailed. They were presented with the deposits haircut and increase in corporate tax. Our president threatened to leave the negotiations cause stealing depositor's money is unacceptable and was threatened that if not accepted the European Central Bank on Tuesday will stop providing liquidity to one of the main Cypriot banks which would lead into: the bank shutting down immediately, taking down the 2nd largest bank with it; 8000 people would instantly lose their jobs (Cyprus population is just 700k) and by the end of the week all small and medium sized companies will cease operations. The country would then default and be kicked out of the eurozone with all the consequences that it would bring.

Re: Cyprus parliament delays vote on deposit levy to Monday

#23

Post by justincormack » Sun, Mar 17, 2013, 6:34 PM UTC

Game_Ender wrote: post #17

airesQ wrote: post #13

Earlier quoted context omitted.

If the Cyprus government, EU, FMI and ECB were to do nothing it is almost certain that the depositors would see much less than 90 cents on the euro. The depositors are being rescued here. They trusted their money to banks that went on to make loans to the Greek government. The Greek government defaulted. A significant portion of the depositors money is gone. Nobody is confiscating anything. International institutions…

What about the bond holders though? If the banks go under they lose their money as well, it seems to reason they should be taking a hit as well, not just the depositors.

There are no more than a few hundred million in bonds. The banks were funded by deposits not bonds. The junior bonds probably will be wiped out but the amounts are tiny and there are no details released yet.

Re: Cyprus parliament delays vote on deposit levy to Monday

#24

Post by MoreMoschops » Sun, Mar 17, 2013, 6:34 PM UTC

ctdonath wrote: post #19

kyriakos wrote: post #7

as a Cypriot who will lose part of his money I believe voting for this measure is the best of the two options even though both are bad for us.

What's the other option? In the USA, taking 7+% of everyone's savings on short notice would initiate a civil war. Can't imagine how another alternative would be worse.

What would the two sides be? One side is presumably every citizen, but that leaves no citizens on the other side. Sounds more like a revolution.

Re: Cyprus parliament delays vote on deposit levy to Monday

#25

Post by justincormack » Sun, Mar 17, 2013, 6:38 PM UTC

ctdonath wrote: post #19

kyriakos wrote: post #7

as a Cypriot who will lose part of his money I believe voting for this measure is the best of the two options even though both are bad for us.

What's the other option? In the USA, taking 7+% of everyone's savings on short notice would initiate a civil war. Can't imagine how another alternative would be worse.

The other option is taking more than 7%. The suggestion was a 40% currency devaluation. Although no one really knows what would happen in detail.

Re: Cyprus parliament delays vote on deposit levy to Monday

#26

Post by yk » Sun, Mar 17, 2013, 6:49 PM UTC

So the Greek bonds get a haircut and in the process the Cyprus banks are thrown under the bus. At the same time Germany, the Netherlands and Finland enjoy the capital influx of insurances and some fonds, who are regulated such that they can only invest in the Eurozone. These capital influx creates a nice boom, low unemployment and ensures the reelection of the idiots who did throw Greece under the bus in the first place.

This crisis would be so funny, if it would occur on any continent I don't live on.

Re: Cyprus parliament delays vote on deposit levy to Monday

#27

Post by pasiaj » Sun, Mar 17, 2013, 7:00 PM UTC

yk wrote: post #26

So the Greek bonds get a haircut and in the process the Cyprus banks are thrown under the bus. At the same time Germany, the Netherlands and Finland enjoy the capital influx of insurances and some fonds, who are regulated such that they can only invest in the Eurozone. These capital influx creates a nice boom, low unemployment and ensures the reelection of the idiots who did throw Greece under the bus in the first pl…

Who do you think threw Greece under the bus?

Re: Cyprus parliament delays vote on deposit levy to Monday

#28

Post by aristus » Sun, Mar 17, 2013, 7:03 PM UTC

justincormack wrote: post #23

Game_Ender wrote: post #17

Earlier quoted context omitted.

What about the bond holders though? If the banks go under they lose their money as well, it seems to reason they should be taking a hit as well, not just the depositors.

There are no more than a few hundred million in bonds. The banks were funded by deposits not bonds. The junior bonds probably will be wiped out but the amounts are tiny and there are no details released yet.

That does change things. Debt restructuring is a bit like musical chairs. If there was truly no group left to haircut, to avoid default this had to be done.

On the other hand, that €10B euro could have come from somewhere outside the country, especially since it was the forced Greek bond haircut that caused the crisis. I find it hard to believe that northern Europe isn't taking advantage of this crisis to increase their influence.

Re: Cyprus parliament delays vote on deposit levy to Monday

#29

Post by [deleted] » Sun, Mar 17, 2013, 7:04 PM UTC

pasiaj wrote: post #27

yk wrote: post #26

So the Greek bonds get a haircut and in the process the Cyprus banks are thrown under the bus. At the same time Germany, the Netherlands and Finland enjoy the capital influx of insurances and some fonds, who are regulated such that they can only invest in the Eurozone. These capital influx creates a nice boom, low unemployment and ensures the reelection of the idiots who did throw Greece under the bus in the first pl…

Who do you think threw Greece under the bus?

[deleted]

Re: Cyprus parliament delays vote on deposit levy to Monday

#30

Post by rdtsc » Sun, Mar 17, 2013, 7:15 PM UTC

Karunamon wrote: post #2

Maybe this is a terrifically ignorant comment, but it seems like the government mismanages their finances, as a result, they want the everyman to throw away 10% of their bank deposits? WTF?

Either way it is probably too late, there will be a bank run. If I had any money in there you'd bet I would in line at the bank first thing in the morning to get it out.