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EU imposes collective punishment on Cypriots

The official line, as reported by Bloomberg, is that,

Cyprus Bank Deposits to Be Taxed in $13 Billion Bailout

What this means is that 6.75% 0f the money in any account up to €100 000 and 9.9% of any amount over that has already been frozen in the account and will, if the plan goes ahead, be removed from that account and given to the banks.

It also means the Cypriot government’s depositor protection scheme is worthless. It was a lie. It also means that since this has happened once, it can happen again.  Only a complete fool would leave their money in a Cypriot bank.

If you leave it there you are betting that it’s all sorted and under control now and anyway they would never think of doing this to you again. The question you have to ask yourself is “Do you feel lucky? Do you think you can trust them?Well do you?”

Not only that, but now that it has happened in Cyprus it can happen in any other European country. Of course our governments will say ‘this is a one-off’, ‘exceptional circumstances’ etc, etc. but that assurance is worth as much as the promise that depositors would always be protected. How sure do you feel  that this could just never ever happen in Portugal, or Italy or Greece?

What the EU is trying to force onto the Cypriot people is not a ‘tax’ as per the headline, nor a ‘levy’ as they refer to it in the body of the article. It is a Collective Punishment.

People in Cyprus who have not done anything wrong, who have broken no law, have not lived beyond their means or taken on debts they could not pay, will be punished, by having their money taken from them. And that money will be given to the banks who did break the law, did take on debts they could not pay and they will not be punished.

This is being done at the barrel of a gun. According to Cypriot President, Nicos Anastasiades, quoted in another Bloomberg article,

“We faced decisions that had already been taken,” Anastasiades said in a statement yesterday. He said the European Central Bank would stop providing liquidity to one of the country’s banks on March 19, leading to its collapse if his government didn’t accept the rescue package.

This is the gun he will now put to the heads of Cypriot members of Parliament telling them they must vote in favour of ‘Collective Punishment’ or the ECB will allow a bank collapse.

You might object to the use of the term ‘collective punishment’ especially given Germany’s role in pushing for this solution, and the resonance ‘collective punishment’ has in recent Germany history. But this is what it is.

Germany has made it clear for months it was against any EU bail out of Cypriot banks on the grounds that such a bail out it would put German tax payers’ money into the hands of Russian tax avoiders and criminals. And they are quite right. It  would.

I have spent the last three months researching accusations of money laundering by Russian criminals in Cyprus. I have now oevr a hundred of pages of documentation from bank transfer records to court records. What it all says is that money has been laundered through Cyprus. What it also says is that it was not just Cypriot banks but banks from other nations that have been involved.

But worse it also says that this was known years ago. The Russian authorities themselves, since at least 2009,  have known for years that Cyprus has been where wealthy and sometimes corrupt Russians have put their money in order to avoid taxes.

While as far back as 2008 the Cypriot police had been given information, which I have seen, which if they had pursued it at all would have led them to question certain banks, companies and individuals in Cyprus and in other countries, about money laundering. But of course no one wanted to then and certainly no one wants to do so now.

No one wants to sort out the criminals from the innocent because that would be to admit there were criminal acts taking place in Cyprus involving Cypriot professionals and banks. It would lead to questions about the rule of law in Cyprus.

And once you ask those questions in Cyrpus how long would it be until someone started to pull on the string and find links to banks and companies in other European countries? The countries so keen to punish Cyprus and who love to talk about other peoples’ criminals but not their own?

The fact of the matter is that no one wants to find a criminal in Cyprus and certainly no one wants to find the bank or company which was servicing them. Because absolutely no one wants any major bank to be accused, let alone ever found guilty of ‘criminal’ behaviour.

What this on-going bank crisis has shown over and over, is that no regulator, no parliament, no country will allow any of its systemically important banks to be found guilty of a crime. Again and again massive wrong doing that would in any other circumstance, done by any other person or organization, be very clearly criminal, has been re-branded and spun from Criminal to “unfortunate regulatory failure”. Citi and HSBC did launder titanic amounts of money, much of drug money. But neither of them were guilty of any criminal act. Repeat after me, they were not guilty. NOT GUILTY.

And this is the necessary re-branding because if it is not done then the banks might be found guilty of criminal behaviour and that would kill them. SO NO ONE will allow that to happen. No one will allow that to even be talked about as a remote and theoretical possibility. Far better to draw a curtain over any facts and details that might pull the guilty, especially the wealthy and powerful guilty,  from their hiding place among the innocent, and instead impose a blind and collective punishment on all, and call it a tax.


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41 Responses to EU imposes collective punishment on Cypriots

  1. Ken Lorp March 17, 2013 at 5:33 pm #

    I expect the events in Cyprus will be remembered as the trigger for a cataclysm across the EU. It, yet again, shows that there is no rule of law in the EU. When it suits them, they will simply tear up the rule book and revoke any and all promises previously made.

    Howver, each and every individual crisis peels back yet another layer of criminality that links both minorities within the banking community and political leaders. This is not unique to the EU as we are witnessing the same in the US, where the DoJ has resolutely refused to investigate and prosecute bankers.

    When our political leaders start behaving like gangsters, we should start treating them like gangsters. The real question is how far people are prepared to be pushed before they push back – then it really gets ugly.

  2. steviefinn March 17, 2013 at 5:55 pm #

    I am wondering if the partial financial assassination of Cypriot & Russian bank depositors is in effect a kind of Archduke Ferdinand moment.



    & this from Zerohedge which includes a report made in 2011 from the Boston consulting group which predicted similar events:


    Automatic Earth think that something just doesn’t add up :


    • Gemma March 17, 2013 at 7:39 pm #

      For another interesting view visit http://klauskastner.blogspot.nl/2013/03/a-new-instrument-here-come-debtequity.html

      One of the latter comments* is very interesting and suggests a very different scenario from the one you present, Stevie. That is to say, not Sarajevo in the summer of 1914 but of Persia when oil was first being discovered there. Once again it is the channeling of fuels – only without Russian interference – their knee-jerk reactions to Ukraine a few winters ago was a real wake-up call for Germany. I can see this as the opening shot in a carefully managed import strategy.


      • Phil T. March 17, 2013 at 9:16 pm #

        Not sure, Gemma, if this report from last November has anything to do with what your post/links suggest ….

        ==> http://www.globalresearch.ca/war-and-natural-gas-the-israeli-invasion-and-gaza-s-offshore-gas-fields/11680

        Best wishes …

        • Gemma March 17, 2013 at 10:28 pm #

          What an interesting article, Phil – a nice piece of sleuthing. Global Research do come up with some interesting stuff.

          I have a niggle that the Germans don’t want to be at the beck and call of Russian gas suppliers. Israelis are far more dependable when it comes to doing business.

          Only I’m just trying to fit the Cyprus banking crisis into the puzzle, and it doesn’t fit! Except of course for getting rid of the Russians that is – oh, and the minor detail that the system was about to implode. Perhaps this really is the start of the clean up of the periphery’s banks?

          • enexoumeypothesi March 17, 2013 at 11:01 pm #

            Let me try and help you out a bit Gemma how the Cyprus banking crisis fits into this puzzle:

            1. corporation tax has risen from 10% (the lowest in the EU) to 12.5% – something our EU partners (the EU solidarity as they like to call it) have been trying unsuccessfully for years to change.

            2. Our EU partners never forgave us for joining the EU in 2004 without having solved our problem first. Let me remind you that 70% of the people of the recognised Republic of Cyprus voted against the Annan Plan that would have reunited Cyprus. This is the perfect chance to pay us back ….with interest! What leverage a bankrupt country has I wonder….


            3. (but not last), the Troika can control the future earnings (and only a fool would think just that) from the discovery of natural gas in Cyprus.

            Now, if tomorrow the Spaniards or Italians take a run on their banks, well this is just collateral damage. I’m sure the idiots that run Europe will think of something, the same way they have been thinking for the past 5 years and in the process destroying Greece and now Cyprus.

            Whose next?

          • Phil T. March 18, 2013 at 1:38 am #

            Dear Gemma et al … I believe that your puzzling point is indeed ours collectively. It could very well be that we are trying to make sense of utter non-sense that has escaped the ivory tower prematurely. Also, I am not certain what impact (if any) that Mr. Dijsselbloem’s arrival in his new EuroGroup position has on this situation.

            Hopefully, others with large brains will enlighten us this week with reports that provide insight into the banking events of Cyprus and how they relate to your initial posting.

            In the interim, here are the results of additional sleuthing:

            Graphic Images of Cypriot Gas Fields
            ==> http://tinyurl.com/csxnrzr

            ===> http://www.nytimes.com/2012/12/13/world/middleeast/gas-field-off-of-cyprus-stokes-tensions-with-turkey.html?pagewanted=all&_r=0

            ====> http://www.economist.com/news/business/21569452-politics-could-choke-supplies-big-new-offshore-gasfields-drill-or-quarrel

          • Gemma March 18, 2013 at 7:47 am #

            Thankyou both of you for your thoughts.

            I am a little less worried about the Troika – I see the moves not in economic terms but in strategic terms. After all, in Hungary and other places during the war the Germans were known for paying their bills. Many Ukrainian Jews even trusted the oncoming Germans because of their previous behaviour that contrasted starkly with the vicious pogroms they had had to endure in the previous decades. I want to state that Nazism was a real perversion of what the real German is. No small amount of the hate in Greece and other places looks back to a war where the Germans were vilified – despite the US and the Russians being as ruthless and unfeeling to those in their paths.

            The gas pipelines through the Med lie in an area that is economically and politically stable. One problem was of Russian influence in Cyprus – that has now been dealt with. Those that remain had better behave themselves.

            If corporation taxes are low, that’s fine by me just as long as you can balance your books and not run up a deficit in having low taxes. Corporations have extremely low taxation in the US – and the US citizen is suffering because of this. You are not alone!!

            As to “the idiots in Europe” look to Washington, London … there are many idiots ruling in many places these days. They are just different idiots with different ivory towers to listen to.

  3. Gemma March 17, 2013 at 7:24 pm #

    I was wondering if this wasn’t an attempt to clean up the Cypriot banks’ act. After all, this so-called tax would have been known about a few months ago by anybody wealthy enough to have the ears on what was going on. Obviously this includes some shady Russians, who have now withdrawn their cash and goodwill. Obviously this is taken way out of context, it may however be one outcome that will please the northern countries of the EU.

    My point is that can these Russians now return? Will the banks be sharp enough now to see them coming now that other eyes are watching them as well?

    After all, the Cypriot banks had to make as good a profit as the US banks – only they didn’t have the advantage of being able to give mortgages to any waif with a national insurance number. They had to bolster their meagre profits from less reputable sources. Just as the German banks had to keep-up-with-the-joneses by their shenanigins in Ireland. They were all chasing each other’s tails and trying to better each other – when all the time they could have done their job properly.

    No, perhaps they couldn’t.

  4. cynicalHighlander March 17, 2013 at 8:33 pm #

    No words needed.


  5. Patricia March 18, 2013 at 2:32 am #

    From New Zealand This is what was said in interest.co.nz this morning. I bet it is not just our Reserve Bank that has this policy

    “All this is relevant to us, because the Cypriot haircut (or tax, if you like) is a similar policy to what the Reserve Bank here has adopted in its Open Bank Resolution policy. If a NZ bank fails, how happy would you be to have some of your deposit taken to support a bailout? It’s the opposite of deposit insurance”

    The world has gone mad.

  6. enexoumeypothesi March 18, 2013 at 12:52 pm #

    Once again the incompetent European bureaucrats together with the crook politicians have screwed up the people that were elected to serve! In the meantime, the ex CEO of Bank of Cyprus is suing the bank for not paying him his 2 mln euro retirement benefit…..YES, he is still a free man enjoying his millions ”earned” during his tenure at the bank.
    Our politicians feel ”this is not the time to find out who is to be blamed for this mess”, it’s far easier to steal from the people to save the banks that created the problem in the first place.

  7. steviefinn March 18, 2013 at 3:25 pm #

    A short take on this from Edward Hugh, English economist who works in Spain. He makes the point that this could make OMT unworkable.

    ‘ Events in Cyprus are taking the headlines this weekend. It isn’t clear what the final offer to small savers will be at this point. Maybe there is justice in the tax on large savers given the origin of most of the money, but what matters here are perceptions.

    In Spain (and I suppose Greece, Portugal and Italy) most of the attention is going on the fact of the “Corallito” (the Spanish term for what happened in Argentina where bank accounts are frozen) and the issue of deposit holder risk in bailouts. Naturally what is happening makes people more, rather than less, nervous.

    Effectively capital controls (albeit temporary ones) have been imposed on a Euro participating country for the first time since the common currency was established. This could be considered a “dry run” in a small country, to run a test, just in case….

    The other implication I see is that this makes the OMT effectively unworkable, since no political leader in either Spain or Italy could now survive asking for an EU bailout. Basically, with all the lies that have been told, political capital is at an all time low, and no one would believe there was no risk to their deposit, so any move towards a bailout application would, almost inevitably, provoke deposit flight. The Cypriots were, naturally, told there was no risk of this happening. Who is going to wait and see if the next politician keeps his word?

    In Spain savers are already hopping mad about the way “burden sharing” has been skewed towards them and away from German institutional investors, who have been almost totally protected.

    As the Euro and German bond yields fall German interests can hardly be seen to have suffered here. Where exactly is the “sharing” element?

    Investors, naturally, are also being made nervous, since it is clear not all Euro Area countries are actually the same.

    In the short term all this may settle back down again without too many apparent consequences, but in the longer term Euro break up risks will be seen to have risen significantly ‘.

  8. backwardsevolution March 18, 2013 at 3:50 pm #

    Mike Shedlock said re Cyprus:

    “First the bondholders should have been wiped out. If that was not enough then the deposits above the €100,000 deposit guarantee should have been hit. Then and only then should the average citizen been hit.

    And guess what. The average Cyprus citizen would likely not have been hit. Instead, the EU mandated a “screw every citizen” policy to protect the senior bondholders.”

    A reader then replied:

    “After a quick review of the most recent financial statements of the four publicly listed Cypriot banks as shown on their websites, it is notable that a simple alternative proposal could protect the country from bankruptcy and make its depositors whole.

    By wiping out 100% of the equity, 100% of the bondholders, and 17% of the banks’ liability to central banks, the Cypriots could stabilize their banking system (based on the 5.8Bn EUR figure being discussed) without penalizing local savers.

    Instead of raising 5.8Bn EUR from depositors, it could raise 1.4Bn from combined market cap, 2.0Bn from bondholders and preferred shareholders, and 2.4Bn of the 14.3Bn in combined Central Bank loans (Cypriot and ECB) it has on its books. This assumes zero contribution from the Cypriot subsidiaries of foreign banks so it may be conservative.

    If the banking system is bankrupt, anything other than an Alice-in-Wonderland recovery system suggests that the order of liquidation is shareholders, preferred shareholders, debt holders, Central Bank creditors, and THEN depositors. If 10Bn or even 17Bn EUR is truly required, then coincidentally up to 17.7Bn EUR is available from equity holders, debt holders, and Central Bank creditors without impairing a euro cent from depositors.”


  9. backwardsevolution March 18, 2013 at 6:11 pm #

    Charles Hugh Smith on banks, bondholders and Cyprus:

    “Democracy is a fiction when no matter who you vote for, the banks and bondholders win control of the national income stream and private wealth. Democracy in Europe is a travesty of a mockery of a sham, an absurd play which is acted out as a form of blood-sport circus to distract the masses from their powerlessness and debt-serfdom.

    Democracy is a fiction when the policies protecting banks and bondholders from losses remain in place regardless of which political party, coalition or politico is nominally in power.

    The German taxpayers’ private wealth is being expropriated via taxes to bail out core banks and bondholders; how is this any different from the blatant expropriation of private assets in Cyprus?

    It is only a difference in technique; the result is the same: the forced transfer of wealth from those who earned it from their labor to banks and bondholders which in a truly capitalist economy would be immediately forced to absorb the losses of their leveraged, highly risky bets.”


    “Hell is empty and all the devils are here.” Shakespeare.

    • neretva March 18, 2013 at 7:01 pm #

      “Democracy in Europe is a travesty of a mockery of a sham…”

      Charles Hugh Smith for some reason “forget” to mention USA and any country where democracy is the norm.

      • backwardsevolution March 18, 2013 at 7:21 pm #

        neretva – good points! Charles Hugh Smith doesn’t address the USA specifically in this post because he’s referencing Cyprus, but I have read post after post of his where he says the same thing about the States. You are right, there is no difference. These people are fighting to keep from taking the losses they incurred. They must fail.

        It is the Central Banks, bankers, politicians, and the financial elite against us.

  10. neretva March 18, 2013 at 6:47 pm #

    Yes Charles Huge Smith explanation is the best one, in my opinion.

    In more simple terms it is what Marxist’s say Primitive Accumulation of Capital which is permanent features of capitalism. There is another term Accumulation by Dispossession. All in all, everything in liberal-capitalism is lie.

    “Not only that, but now that it has happened in Cyprus it can happen in any other European country.”

    This statement is, at least, dishonest. It has happened before. And still happening In Asia, if Africa and South America, in East Europe ALL THE TIME. Just read IMF and World Bank papers under the term “restructuring” and “stabilization” and some other euphemisms. In some countries located in above mentioned continents a “transition” couldn’t be done “peacefully” as in a case of Cyprus, so lord and masters underwent that country to the war, as in a case of Yugoslavia or fascist dictatorship as in a case of Argentina or Chile etc. Russian president Putin said that more people is perished in Russian during “transition” period, than during WWII.

    This is just short list of victims of system called liberal-democracy aka fascism. Why are people surprised is beyond me.

  11. backwardsevolution March 18, 2013 at 6:59 pm #

    More from Charles Hugh Smith:

    “At long last, Europe’s flimsy facades of State sovereignty, democracy and free-market capitalism have collapsed, and we see the real machinery laid bare: the Eurozone’s political-financial Aristocracy will stripmine every nation’s citizenry to preserve their power and protect the banks and bondholders from absorbing losses. […]

    4. The ideological fiction of capitalism is dead in Europe. Capitalism is a fiction if capital that is placed at risk for a return cannot be lost.

    5. Cyprus is a test to see how blatant the expropriation of private assets can become without triggering overthrow and revolution. If the furor dies down soon enough, then the same technique of expropriation will be imposed elsewhere. If the reaction is sustained and threatening to the Aristocracy, other less blatant expropriations will be tested in other neocolonies.

    6. Divide and conquer is the propaganda order of the day. The Power Elites are attempting to set the serfs of the periphery against the serfs of the core, the goal being to keep both sets of serfs from realizing they are equally indentured to the core’s pathological political-financial Aristocracy.”

    I have serious doubts whether markets were ever “free”. I think we just didn’t see what was really going on because the “machinery” was well masked by bread and circuses. Everywhere I look, I see government/corporation/elite collusion, deceit and manipulation, historically and currently.

    I am for tight regulation of the banking industry. They should be broken up; they are too big. If they screw up, they should be allowed to fail, no bailouts. If they really screw up, they should lose their charter and the upper management face jail time.

    It is us against them now – always has been (and they have always won) – and we shall see who wins this time. If we sit back, feudalism is around the corner for all of us. In their minds, THEY are the people who “count,” and they are setting out to win. Perhaps we’d better get in the game.

  12. backwardsevolution March 18, 2013 at 7:10 pm #

    From Karl Denninger:

    “… a work stoppage is sufficient to guarantee the government’s collapse, should the people choose to maintain it for a sufficient time.

    However, history also says that most of the time the people will choose to hang, burn, shoot or loot either in concert with or in place of a general work stoppage.

    Thus ends our history lesson for today.

    Let’s see whether today rhymes with the past 5,000 years of recorded human experience.”


    • Foucalt Tudoux Wimay March 18, 2013 at 7:41 pm #

      I think the unelected leadership in Eurozone have forgotten who keeps them in power.
      The masses have four great powers, but they seldom can get energised enough to think about using-
      Withdrawal of labour
      Withholding of taxes
      Removal of savings
      Rejection of peaceful protest

      Might be getting a little closer to the day any one of these happens, and the game is over.

  13. neretva March 18, 2013 at 7:13 pm #

    This is really NOT about a bank’s deposits.

    It is about pludnering and looting Cyrpus national and mineral wealth, now and in the future.

    Read this: http://www.cyprusnewsreport.com/?q=node/6556 among other things:

    Semi-government Organisations

    1. State-owned enterprises will be listed in an inventory and considered for divestment, liquidation, privatisation or restructuring, depending on the financial health of the company in question.

    2. By the end of 2013, state-owned enterprises will have to reduce their running costs by at least 15 percent versus 2010.

    3. If necessary to restore debt sustainability, the authorities will consider a privatisation programme for state-owned and semi-government organisations.

    The west will liqidate the Cyprus banks and insurance companies and will bring own ones. Just small example. Cypurs state will be in permanent need of cash to cover its deficits because of its weak economy. The source will be, of course: IMF.

    “Fascism is capitalism plus murder.” — Upton Sinclair

    • backwardsevolution March 18, 2013 at 7:23 pm #

      neretva – just like the Shock Doctrine by Naomi Klein. Same thing over and over again. Thanks.

      • neretva March 18, 2013 at 7:41 pm #

        Of course.

        Every time when I go to my home land I feel a pain…deep pain seeing people impoverished and society pauperized. Political, aka Comprador class all the time talking about “investors” and “privatization” and rhetoric of ethnic hate in local media outlets. Thus they keep people in fear and silent.
        Country, in effect, is run by IMF, and “entrepreneurs”.

        • Golem XIV March 18, 2013 at 8:30 pm #

          Hello Neretva,

          Thank you for commenting here. It is good to hear from your persepective.
          I hope you will comment again.

          • neretva March 18, 2013 at 10:21 pm #

            OK, will do, 🙂

    • enexoumeypothesi March 18, 2013 at 11:01 pm #

      I agree with you that this is not about bank deposits. It is about looting Cyprus natural resources, closing the thorny Cyprus political issue and of course getting these Russian deposits themselves. And our (millionaire) President so easily gave them what they wanted. What the EU (&US & CY president) underestimated was the reaction of the Cyprus Parliament. My guess is that all the MPs got scared that voting to chop off those Russian deposits would not bear well with their owners……i hope tomorrow the Spaniards will give another lesson to all these unscrupulous people

  14. bill40 March 18, 2013 at 9:59 pm #

    I have so far refrained from commenting on the Cyprus fiasco but here goes. The two certainties are that 1. Nobody is ever this stupid except on purpose and 2. Some deal must have been cut with the Russians. Sadly these two points lead to a plethora of different options.

    i am led to believe by my (unreliable mostly) sources that this information was leaked to the Greek bondholders as a payback. has anyone else heard this?

    Shauble has pulled this stunt to cosy up to one of the Americans or Russians, my bet is on the latter.

    • Phil T. March 19, 2013 at 12:55 am #

      Interesting theory … perhaps the stunt is to cozy to both (TCTB) !
      After all, President Obama is shortly en route to this region. As to your Certainty 1, the timing aspects of this event/debacle are not coincidental …

      • Phil T. March 19, 2013 at 5:19 am #

        Their Plan B is a mechanism to loot not just the more vulnerable banks in weaker nations, but those nations themselves. And the looting will not take months not even days. It could happen in hours if not minutes. Our leaders would have only a few hours to decide who they would side with: the banks or us. The past four years give me no faith they would chose us.

        Above paragraph is an excerpt from:
        Plan B – How to loot nations and their banks legally
        ==> http://www.golemxiv.co.uk/2011/12/plan-b-how-to-loot-nations-and-their-banks-legally

  15. Wirplit March 19, 2013 at 9:01 am #

    Collective punishment…or collective Cock-up? …..and mostly by the Cypriot prime minister himself wanting to save his banking chums despite stuffing his own people…


  16. backwardsevolution March 19, 2013 at 9:33 am #

    But the truth is that Cyprus is not in a position to rule out any ideas, even stupid ones. The facts of the situation are this: Cyprus is one of the most leveraged countries in the world, and its banking system has assets equivalent to eight times the country’s gross domestic product, the result of Cyprus’s attempt to turn itself into a major financial centre.

    It did this by luring deposits with a favorable tax treatment and what many euro-zone policy makers believe were exceptionally weak anti-money-laundering controls, turning Cyprus into a haven for tainted money, particularly from Russia. These deposits were then used to inflate a domestic property bubble, to fund Greek corporate loans and to buy large quantities of Greek government bonds.

    All three bets have since gone sour; last year’s Greek debt haircut alone cost the banking system €4.5 billion.”


    From Karl Denninger:

    “I suspect, but cannot prove, that the reason for the IMF and ECB demand is that the ECB and other “protected” parties are the holders of the bonds in these banks, and had an orderly resolution process been carried out (or for that matter a disorderly bankruptcy) the result would have been a wipe-out of these institutions’ holdings.

    Rather than accept that, having willfully and intentionally looked the other way and accepted those bonds (Greek) as collateral despite knowing they were worthless, they attempted to steal the funds from the people to cover it.”

  17. John Souter March 19, 2013 at 1:02 pm #

    The price of apathy in a world war against greed and hubris.

    First they came in the dead of night for the gypsy’s – but I am not a gypsy! etc.

  18. Barry March 19, 2013 at 9:11 pm #

    “It also means the Cypriot government’s depositor protection scheme is worthless. It was a lie. It also means that since this has happened once, it can happen again. Only a complete fool would leave their money in a Cypriot bank.”

    This says that the EU has abandoned the principle of deposit insurance, in favor of senior bondholder insurance. If you have money in *any* EU bank, that money is subject to confiscation to make sure that the bank’s bondholders are paid off.

    Please note that the bondholders are likely to be financial institutions, who have full-time professionals tracking things, as opposed to the rest of us, who wouldn’t know how to evaluate a bank’s soundness.

    The professionals are to be bailed out, the amateurs are to be punished.

  19. Steve Sayers March 19, 2013 at 9:32 pm #

    Did the eu actually say rob babk accounts, or was it just a way for Cypriot gov to come up with the required contribution ?

  20. Mark March 22, 2013 at 10:47 pm #

    It is a big mistake to assume – as Germany has done – that “the only people to be punished by a Cypriot haircut will be Russian crooks and money-launderers”. In fact, something like 40% of the Russian money in Cyprus belongs to large Russian banks. Part of the Russian financial system. The financial system that loaned money to Cyprus the last time it got in trouble. And while the largest amounts in Cypriot banks are owned by Russians, the largest number of depositors are Britons.

    • Golem XIV March 22, 2013 at 11:07 pm #


      Thank you. I did not know that about the number of British depositors.
      Any more you can tell us please do.

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