{"id":19571,"date":"2013-03-25T09:04:21","date_gmt":"2013-03-25T13:04:21","guid":{"rendered":"http:\/\/quotulatiousness.ca\/blog\/?p=19571"},"modified":"2018-01-15T17:14:09","modified_gmt":"2018-01-15T22:14:09","slug":"the-cyprus-deal-decoded","status":"publish","type":"post","link":"https:\/\/quotulatiousness.ca\/blog\/2013\/03\/25\/the-cyprus-deal-decoded\/","title":{"rendered":"The Cyprus “deal” decoded"},"content":{"rendered":"

With a blog post entitled “THE CYPRUS HEIST GOES THROUGH: And it\u2019s an Orwellian masterpiece<\/a>“, you could say that this is an unfair summary of the situation:<\/p>\n

Somewhere, George Orwell is spinning in his grave — although he wouldn\u2019t be even remotely surprised by the 1984<\/em>-style nonsense being hailed as a compromise by the Troikanauts and Nicosia\u2019s embarrassed leaders.<\/p>\n

This is the deal: the levy is called something else<\/del><\/font> scrapped, and none of the deposits below \u20ac100,000 will be stolen<\/del><\/font> included.<\/p>\n

The new lunacy<\/del><\/font> idea sees Laiki Bank closed. The entirety of its \u20ac4.2bn in deposits over \u20ac100,000 will be placed in a \u201cbad bank\u201d: why you would put healthy deposits in a bad bank eludes me, but we\u2019re really just moving the stash around here: the bad bank\u2019s resources will be confiscated. We\u2019re talk a 100% haircut for all these savers.<\/p>\n

And don\u2019t be fooled by the Berlin propaganda about Russian money-laundering. First up, being a rich Russian doesn\u2019t automatically make you a crook; and secondly, nowhere near all — possibly under half — are Russian anyway: UBS, several Israeli banks, a number of French banks will have depositor\u2019s money taken out of them to pay for the ambitions of Brussels-am-Berlin.<\/p>\n

There\u2019s more: all<\/em> the bondholders in Laiki also take a 100% haircut.<\/p>\n

[. . .]<\/p>\n

Entirely appropriate however was the choice of Wolfgang Sch\u00e4uble to face the cameras and \u2018explain\u2019 why none of this would need the approval of the Cypriot Parliament. Just \u201capproved by the 17 eurozone finance ministers comparatively quickly, after about two hours of further deliberations\u201d. As to why it needed FinMin approval (but not that of the citizens\u2019 representatives) get a load of this for jargonised bollocks:<\/p>\n

\u201cThis plan will not require the approval of the Cypriot parliament because the losses on large depositors will be achieved through a restructuring of the island\u2019s two largest banks and not a tax.\u201d<\/p><\/blockquote>\n

\n

In Cyprus the word you hear most often is ‘betrayal’. There is an acceptance that Cyprus made mistakes but the people feel punished,<\/p>\n

— Gavin Hewitt (@BBCGavinHewitt) March 25, 2013<\/a><\/p><\/blockquote>\n