Amazingly nobody seems to want to claim credit for the great Cypriot bank raid, and it’s hard to find anyone with a good word to say about the “deal” which has put all of Europe into a Boylean “state o‘ chassis”.
The ECB is running a mile from this one and is intent on putting the blame on Cyprus president Nicos Anastasiades and the Cypriot finance ministry, a person, who asked not to be named as the discussions are not public, told Bloomberg news.
The ECB, “the person” said, was against taxing Cypriot savings accounts under €100,000.
This argument was augmented by ECB executive board member Jörg Asmussen who said in Berlin yesterday that the bank had “not insisted” on the structure of the levy.
It now seems that the Cypriots can structure the raid any which way they want, according to Asmussen, as long as they deliver the €5.8bn required to secure a €10bn funding deal.
Wolfgang Schäuble, the German finance minister, who represented Germany in the rescue talks in Brussels, was also backtracking like mad, saying it was “not the creation” of the German government and that he was open to changes.
Russian president Vladimir Putin is not happy either, over the fact that his compatriots, and maybe even himself, may have to cough up a significant portion of the €5.8bn.
It seems as much as €23bn of the total €70bn deposit base of the Cypriot banks is held by Russians and Russia banks.
Putin sees the bank raid as unfair and setting a dangerous precedent.
“While assessing the proposed additional levy on bank accounts in Cyprus, Putin said that such a decision, should it be made, would be unfair, unprofessional, and dangerous,” Kremlin spokesman Dmitry Peskov told journalists.
Cyprus Mail columnist Stelios Orphanides is livid and told readers in yesterday’s newspaper that he is now a sworn enemy of the “European Union GmbH” — a union he describes as having limited liability and selective solidarity.
“As a Cypriot citizen and taxpayer, I was asked three times in the recent past to contribute to the rescue of three other eurozone members (Greece, Ireland, and Portugal) when my government participated in their respective rescue packages with loans.
“Back then, I remember very well, I neither complained nor heard of any other Cypriot complain about the Greeks, the Irish, or the Portuguese,” he wrote.
Orphanides said it is now clear that while systemically unimportant countries have an obligation to contribute to the rescue of systemically important eurozone members, they have no right to expect any solidarity whatsoever.
“The fact that the European leaders and finance ministers took such a stupid decision — which implies that Cyprus will lose another €5.8bn or 35% of its gross domestic product in accumulated wealth — demonstrates that Cyprus’s ‘rescue’ [in turn] raises the overall Cypriot contribution to fighting the euro-crisis to over 60% of its GDP, [and] demonstrates that solidarity within the eurozone is a one-way street,” he fumed.
Orphanides had one last question. He wanted to ask Europe’s political masters: “Have they really pondered matters carefully enough before even proposing this new type of remedy, as to how it will affect financial stability in other eurozone countries with marginally sustainable government debt such as Italy or Belgium?”
Who knows what the unintended consequences from this so-called deal will be across the eurozone.
Few were betting that President Anastasiades’s pledge that savers would be compensated by shares in commercial banks — with returns bolstered by anticipated revenues from yet-to-be-tapped Cypriot natural gas discoveries — will be sufficient in assuaging his fellow Cypriots.
Savers across Europe have been unsettled by this bank raid and will be looking for ways to ensure they do not become victims of any future EU-sponsored bank heist — this is one consequences of which we can be sure.
Cyprus’s parliament is due to convene today to discuss a levy on bank depositors due to be imposed as part of a financial bailout.
Any vote will be a close call. Cypriot ministers were working yesterday to revise the terms of the levy but that was not expected to change the likely voting patterns as set out below:
*No single party holds an absolute majority in the 56-member parliament, and alliances need to be formed for the bill to pass. An absolute majority, with all MPs voting and not abstaining, is 29. A block to either approve or reject the vote could be created with abstentions. Support for the motion hinges on smaller parties.
*President Nicos Anastasiades’s Democratic Rally party, which is the largest in parliament with 20 members, will support the vote.
PROBABLE YES VOTE:
*Democratic Rally governing coalition partners the Democratic Party, which has eight deputies. The Democratic Party has not said whether it will support the bill, and members are known to have reservations.
*AKEL Communist party, which holds 19 seats, says the levy is a deposit-grab and will not support it.
*Socialist EDEK party, with five seats, will also reject the motion.
*Greens Party: One MP. Against a “meaningless deposit haircut”.
*European Party: Two MPs. One says he will reject the motion.
*Independent: 1 MP.
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