An Interesting Bailout in the Offing

Bruce Krasting's picture


There is a sideshow going on in Europe this week. All eyes are on the Spanish bank bailout, but there is another bailout in the works – Cyprus. I believe that a Cyprus deal will be agreed to within days. The question in my mind is, “Who is going to put up the money?”

Let me first say that the problems in Cyprus are very small compared to Spain. If it were not for the fact that the rest of Southern Europe is on fire, Cyprus would get a very nice deal from its “friends” in Brussels. I think the country needs about Euro5B to shore ups its banks, another E20B for the Treasury. Chump change these days.

I have written about Cyprus and the 2011 military base explosion that brought the country to its knees (Link, Link) . It’s an interesting story with an interesting outcome. The Russians bailed out Cyprus with a Euro 3b loan.



Why would the Russians be willing to bailout a country who is a member of the EU and whose currency is the Euro? Three reasons:

(I) - Naval bases/basing rights. The Russians would love to have a deep water port in one of the more strategic areas of the world:



(II) - Energy. There is a very good chance that there is a large supply of natural gas in Cyprus’s territorial waters.




(III) - Money. Russians have been using Cyprus as an offshore banking center for years. If Cyprus’s banks are in trouble, then some of that money is at risk.





There are many parties who have an interest in what happens in Cyprus. This includes the usual list of bankers, technocrats from Brussels and IMF types. But Cyprus has some other folks who might have a say in the outcome of this, including:


- The US military

- The CIA

The very last thing that this group wants is to see is that the Russians get further involved in the domestic affairs of Cyprus.




In the crazy world of sovereign bailouts, we may find Cyprus in a unique position. There may be competition for who provides the bailout cash. If one was a Cypriot, and faced with the need to go hat in hand for help, which way would they go?

To Brussels. Where the needed money will be made available (it already has been agreed to) but the terms will conform to the other EU bailouts. Cyprus will have to accept the austerity that comes with these deals and “supervision” from the North. There will be strings attached, and this money is not cheap.

To Russia. Where the terms could be more attractive. Few strings. Cheap money. (Russia has oodles of Euro reserves earning nothing.) The quid pro quo would be to allow Russians to base vessels. The “upside” for Cyprus would be that their new friends in the East would also provide the money and resources to exploit that gas field (in exchange for a big rake of the profits).




I have to believe that the game of chess I describe is happening at one level or another as I write. Cyprus is strategically too important. My guess is that the deciders in Brussels (and D.C.) will try to keep the Russians out, and keep Cyprus in the EU fold. This would suggest that Cyprus is offered a deal that strays from that offered to Spain. It would have to be far superior to that offered to nearby Greece.

Should a “sweet deal” be in the offing for little old Cyprus, it would throw the whole ball of wax into the fire. The people in Ireland, Portugal, Greece and Spain would hit the streets.

I close this with a section of my September 2011 report on Cyprus. If you think that the CIA is not involved with Cyprus in June of 2012, you’re wrong.


A man believed to be one of Russia's most capable agents, arrested in Cyprus this week as a suspect in the spy ring, has almost certainly fled the island, the justice minister, Loucas Louca, said.
Less than 72 hours after he was last seen on Cyprus, speculation is mounting that Christopher Metsos, the alleged paymaster of a Russian network operating under deep cover in the US, was allowed to "disappear" by a government which caved in to pressure from Russia.



Note: There is nothing new or unusual about big powers and their interests in deep water ports. The USA Navy is doing its damnedest to get back into Vietnam.




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Setarcos's picture

Talking of Russia and what is going on in Syria, not too far from Cyprus "as the jet flies", etc..

News to hand:

If this is true, along with other sources as reliable as Voltaire, then forget about market shenanigans and all the froth atop the EU/Euro (molotov?) cocktail of mixed and shaken, diverse countries ... not(sic) to mention the diverse states of Amerika.

WAR has a wondrous way of uniting people to take one side, or t'other ... of getting the masses to cease being unhappy with their lot in life and pull together, until death, in support of "the nation"; really the 1%, BTFW.

I could be wrong (hope I am in fact) but I think that the current war against Syria will quickly - perhaps within weeks - precipitate WW3, even if Putins Russia was to roll over like it did with Libya ... after all Iran is next on the list of PNAC targets for "regime change".

BTW it is not BS that a "movie-set" of the Green Square in Tripoli, Libya, was built in Doha (Qatar) by al Jazeera/the Qatari dictatorship for propaganda purposes against Qadafi.

I lived in Libya for a few months during 1991 and I know that the "Green Square" portrayed by al Jazeera, and broadcast by Western media, was NOT what I had seen with my own eyes.

I have no reason to doubt that the same stunt is being pulled with Syria.

Conspiracy theory??  NO.

PNAC and AIPAC are facts.  And it is a fact that there was conspiracy before/during 9/11 ... just not involving 19 box-cutter-weilding non-pilots, 'organized' by a man dying of liver disease in Afghanistan.  That conspiracy theory is so wild that even I believed for a few months ... rather like a child believes in Father Christmas, the Tooth Fairy and even a god, for a few years.

ebworthen's picture

Russia sending helicopter gunships to Syria - so yeah - "investments" in Cyprus not surprising.

BTW - China is colonizing Africa as we speak.

Setarcos's picture


I have no axe to grind for China, but it is a fact that colonizers always send armies to conquer, like your Washington Empire has done globally.

There is not a single example - except for Tibet - of China colonizing anywhere for hundreds of years, whereas YOUR Empire still occupies, militarily, EVERY country that's been invaded since WW2 and before, e.g. the Washington Imperium still occupies ALL land seized during the Indian Wars and the Spanish/Mexican wars.

Get real!  Your beloved "Republic" has been at permanent war for over two hundred years, of course including the Civil War.

StychoKiller's picture

Wrong! They have sent an army -- an army of engineers and developers...

tom's picture

Good stuff just one comment. The Russians and foreign operators in Russia all have cypriot companies because they are tax exempt in Russia. But cypriot companies don't have to bank in Cyprus. There's not that much Russian money in cypriot banks, even those who did bank there have pulled out, which is part of why cypriot banks are teetering.

JOYFUL's picture

Always great to see yu covering stuff that would otherwise get lost here Brucie! Yu are the seismologist of sabbatean conspiracy fact, in the central sections of the provided map, we've had repeated tremors in the last week...Rhodos bein at the center of the biggest(reported 6.0) and Santorini is doin it's thang too!

Things are getting shakier round these parts by the minute...

speaking of things that get lost.....there seemed to be a glaring under referencing to the bossy little belligerent bully in the ME sandbox in yur everybody knows,(and I think yu covered it in yur own piece last fall) the sionists are drooling for the Cypriot offshore oil\gas deposits that butt up against their own phony offshore claims...and are angling for the Greek ones too. That this does not play well in Ankara is a given, but the Russian wild card is the deciding factor...Moscow cuts all kinds of deals with the sio-nazis in tel aviv, in part because of the previous ties between the bolshies running both countries, and in part because the Ruskies let no principles stand in the way of advancing long term strategic interests...

Moscow need the Turks onside for their planned European Energy Envelopment(the only alternative routes must go thru turkish space) and will probably throw everybody else(including the Cypos and the Cryptos)under the bus to get them there...big, BIG stakes in play here.

Navymugsy's picture

Russian is the third language on the island besides English and Greek. Nice to know that soon enough, I'll be able to look out on the Russian frigates from my kitchen window. This place is a mess with or without the Russians.

Oldrepublic's picture

I made a visit to the Syrian desert a few years ago, saw some ancient roman ruins, wonder what will remain of the outposts of the  American Imperium in the coming centuries?

Setarcos's picture


I went to Libya in 1991 and saw much the same as you did in Syria.  I expect it is all wasted now, like the ruins of Babylon in Iraq (and the museums) wich the Imperium  destroyed.

At least past empires actually built stuff that lasted.  Even recent empires were constructive, e.g. the London Empire built railways in India and other colonies.

All that the Washington Empire has ever done is destroy.

GeneMarchbanks's picture

'All that the Washington Empire has ever done is destroy.'

That is not true. There is a McDonalds in every corner of this planet.

Setarcos's picture

BTW Marchbanks.

Very unusual name, but it's in my family too.

Just wondering?

GeneMarchbanks's picture

'Just wondering?'

Heh! Don't be silly, I am not your father.

Your family name has been depicted in works of literary fiction. Very well I might add.

Setarcos's picture

You could hardly be my father, silly man, because I am 69.

In any case the name "Marchbanks" was on my mothers side and she died 65 years ago.

I have never been all-that interested, though I might Google, now that you've mentioned literary fiction.

I clicked on your name ... seems you regard yourself as an under-rated "higher man".  Hmm.

sessinpo's picture

Sorry, Bruce. I can sum it up without all the fluff.

Cypress was a hedge. Russia already has a naval base in Syria which is why Russia is sending in attack helicopters. They've even been dredging around the port so that Russian aircraft carriers can use the port. The port has been there for decades.

fxrxexexdxoxmx's picture

The best thing about when the Russians begin killing women and children it will no longer be a bad thing. Not like when evil Americans do it. Russians can kill all the women and children they want since they will claim the bad guys did it. And not one single group who constantly accuse the Americans of these kinds of things will say a single word. They will all just act like it never happened. I am glad. I was listening to NPR today and they will talking about how the Syrian troops had been killing women and children. Once the Russians start doing it NPR will simply forget about it.

That is how it is. Killing women and children is only wrong when the guys you do not like are doing it.

nmewn's picture

The anti-war movement has been strangely silent the last three years haven't they?

No more talk of closing Gitmo (wasn't an Executive Order issued by the CnC?). No more talk of NYC civilian trials for foreign terrorists. Military drone strikes (with not even the pretense of a trial in on "targets" within countries we are not at war with.

What could all cognitive dissonance possibly mean?...if I were them I'd be rioting in the streets ;-)

psychobilly's picture

obvious hasbarat troll is obvious.

you conflate "anti-war" with Obama supporter.

your trust in government labeling (e.g., "terrorist") exposes you as a fraud.

nmewn's picture

I look at reactions to events.

There has been no observable anti-war movement in America for three years. No MSM weekly/daily American soldier death counts. No screeching for photographers to snap picks of coffins at Dover AFB under guise of "freedom of the press" yet they still arrive.

It all stopped.


"your trust in government labeling (e.g., "terrorist") exposes you as a fraud."

My trust in government?...ROTFLMAO!!!...fucking egit.

psychobilly's picture

It all stopped?  A Lie.  There have been those who have been consistently anti-war regardless of which party is in office and you know it. 

Are you really surprised that blue team is just as tribal as your red team?  That's how joiners behave.   

Yes, your trust in government.  Government labeling someone a "terrorist" is all that's required for you to conclude that they are.

nmewn's picture

"It all stopped?  A Lie."

Whatever became of Cindy Sheehan? team/red team.

This is something I've been wanting to address around here. Why is that the Blue Team always wants what they percieve the Red Team has and wants government to intercede on its behalf to forcibly take what they think belongs to the Red Team?

Yet, you say you don't trust government...its a paradox.

psychobilly's picture

"Whatever became of Cindy Sheehan?"

What does that have to do with anything?  I don't follow her doings.  Nice dodge.

"This is something I've been wanting to address around here. Why is that the Blue Team always wants what they percieve the Red Team has and wants government to intercede on its behalf to forcibly take what they think belongs to the Red Team?

"Yet, you say you don't trust government...its a paradox."

Ask someone from the blue team.  I don't trust government at all and think, ideally, that it should be abolished, starting with the federal government.

Unlike you, I don't need mommy to protect me from the bogeyman.

And another dodge.  What a weasel.

psychobilly's picture

Are you a disgruntled Obama supporter?  What does this have to do with me?

StychoKiller's picture

You're just makin' all kinds of frendz, ain't ya?

nmewn's picture

"Whatever became of Cindy Sheehan?"

What does that have to do with anything?

Actually, quite a bit, if you followed this poor womans life after the MSM lights went down on her. But I wouldn't expect you to do so.

"Unlike you, I don't need mommy to protect me from the bogeyman."

Son, you're clearly in way over your your just being obtuse as usual. Should have recognized it when you started it off with the Hasbara bullshit not even knowing who you were talking to.

You're an idiot deserving of your moniker...later, much.

psychobilly's picture

"Actually, quite a bit, if you followed this poor womans life after the MSM lights went down on her. But I wouldn't expect you to do so."

If you already knew, then why were you wasting my time asking?  It has fuck-all to do with me or the anti-war position.  It was just a failed attempt at a smear.  Like your first post.

"Son, you're clearly in way over your your just being obtuse as usual. Should have recognized it when you started it off with the Hasbara bullshit not even knowing who you were talking to."

I'm "talking" to a government-trusting, war-loving statist phoney who likes to pose as some sort of libertarian.

JamesBond's picture

if you're waiting for a logical answer from that DNC wart, psycho, don't hold your breath. He's a socialist koolaid drinker from birth.



psychobilly's picture

Get a real job you witless ferret.

onlooker's picture

Bang up job Bruce. cheers

Zero Govt's picture

and you thought your local politician and national Govt promised Nirvana, an answer to every problem, a well-managed economy, growth, Law and order ..Heaven

Er, nope. It turns out when your national Govt gets itself into deep dog-doo it cannot solve it's own problems. It now goes to even Bigger Govt with a begging bowl

Yep, national politicians and Govts are a bit of a joke at solving problems they themselves caused

Enter the Age of Global Govt, not that you ever voted for an international takeover of your country you understand, it's just the "way things are done" today

Your nation doesn't sack its incompetent politicans, instead they go trotting off mortgaging your country and kids future income to unelected undemocratic international debt binging associations like the EU/ECB and IMF

living the national dream that became an international nightmare.. isn't politics wonderful?

Cypriots must be loving the idea their totally incompetent Govt cannot solve its own problems and is now flogging off their nation to the highest international bidder, either the crumbling clown show of the EU or the Russians for military bases ...'democracy' is just awesome innit?

YHC-FTSE's picture

That's a nice catch on the Cyprus/Russia story. Have to admit I've been completely ignorant of the gas and Russian navy connection in Cyprus, especially considering the Russians already have a naval supply base nearby in Tartus, Syria.


As for the Pentagon wanting to go back to Vietnam, that made me laugh out loud. The legacy of the chemical poisoning and subsequent deformities in Vietnamese children, and cancer deaths are still fresh, and they think they can just waltz back there? As usual, Washington has denied any moral or legal responsibility for causing mass murder with Agent Orange even though the soil in former a US military base (Bien Hoa) still contains TCCD levels at a jaw-dropping 180 million times the amount considered safe in the USA. Lawsuits by the victims (VAVA) were dismissed by US judges in 2004 and 2007, and these war criminal clowns at the Pentagon reckon Americans will be welcomed back there? Unbelievable.

Widowmaker's picture

Good stuff, Krasting.

Who is running away from Cyprus?

janus's picture

great article, mr. krasting -- you are correct, sir; the grand chessboard is all a-twitter.  uncle sam is being openly challenged like never before.  

janus tried to warn these pointy-headed pukes...he tried to tell them to start ceding spheres of influence around the world...but, no, they'd liket to press things to the precipice of WAR!  

janus is ever suspicious of the russian -- but he must confess that their claims are legitimate and their gripes are valid.  furthermore, they're far and away the soundest fiscally and best positioned resource-wise of all the major powers (not for invasion, but simple protection; and uncle sam will not tolerate a well defended nation...just ask any persian).

and so i will leave you with the words of another great bruce...the meaning of the following song is really resonating with janus of late.  this country can be saved.  america has the best people, the most diverse economy, the most abundant resources, almost limitless arable land, and, well, we're the coolest mutha-fuckers this planet has ever known!  

now, if we could only get the money-changers out of the temple and restore "CAPITAL".

what's that?  okay, one more...

glory days!/

don't let em pass you by (bitchez),


TrainWreck1's picture

Russians? Spies? This summed it all up in a cheerful little 80's tune:

Tanks, on the borders of Europe. And SPIES! EVERYWHERE!


americanspirit's picture

Which part of Cyprus is the EU going to bailout - the Greek side or the Turkish side? Is there one single bank on Cyprus, either side, that isn't controlled by the Russian mob one way or another? So, where would the bailout money wind up? Inquiring minds .... are damned confused.

falak pema's picture

Cyprus since the days of the Crusades has been a forward outpost between Europe and Asia. Even with Israel there as hard frontier post, Cyprus is now a playground for orthodox vs latin vs anglosaxon vs Arabo-turk-persian interests. The golden triangle of Constaninople/istanbul to Jerusalem to Alexandria is still te heart of the matter in the age of black gold, all in those waters....Watch the Russki trail and the Greco-Turk wrestling to control those interests. 

ThirdWorldDude's picture

The Cypriot Turks are a divided minority and the Brits are too broke to be able to successfully control Cyprus. Also, the people are disenchanted by the great EU promise and are wisely turning back towards the strategically closer partner, The Big Bear; the hint of a new 5 billion loan Cyprus gave today is a stake in the heart of the Eurocrats. 

However, I expect a big wave of change in Turkey once the game in the Middle East begins. The ordinary people in Turkey have understood that there'll never be a place for them in the "European family" and are now more openly turning towards the Arab world.

There is an obvious growing gap between the public and private foreign policies of Turkey - the gov. being controlled by NATO is funneling weapons into Syria ( and is bowing under US pressure to reduce it's trade with Iran, while Turkish business with Iran is blooming (compare gold exports in May) and there's a growing public opinion that Turkey has taken the wrong side (

The plot thickens...


mjk0259's picture

Arabs are not that fond of Turks being how they colonized them for quite for a while....

Few people have killed Christians just for being Christians with greater enthusiasm then the Turks.

Or come up with less useful ideas besides conquering neighbors and stealing everything.


JOYFUL's picture

Ho hum...the usual sionist joker in every pack of ZH chewin gum....

sabbatean\frankist freaks of khazarian[it's a "Dimon" thang!'] origin launch coup against Ottomans...control state and army, begin campaign to exterminate Armenian Christians as part of their long term obsession with 'payback' for being expelled from their Volga swamp hidey holes.

Turks incited against their Greek and Armenian neighbours go on orgy of destruction, while over in "Greece" the Salonikan Section of the Sabbatean Shylocks[it's still a "Dimon" thang!'] get the Greeks riled up against their Turk neighbours, so that everybody, as usual gets screwed over, cept the cyrptos...

fast forward almost a century later, same smyrna\salonikan slaughters own the greater part of the turkish media, banking infrastructure, and general command of the army...prolly most of the so called íslamist' gubernment too!

meanwhiles, JPM employees send inciteful messages from their workstations to blogs carrying info uncomfortable to ....

it's still a Dimon thang!...back in yur box, puppetboy!

Greater Fool's picture

Taking money from Russians is ALWAYS a fantastic idea.

kaiserhoff's picture

Well, it's not like borrowing from the Mafia or..., oh wait.

Itch's picture

I think i heard they hit them for another 6 today, nearly sure i did.

Chuck Walla's picture

I have gas. I just don't brag about it.

TSA gropee's picture

Bruce, as always nicely done. +1000

QuietCorday's picture

Cyprus is a disaster. It is an island, so falls off the radar a lot, but the situation there is a joke.

Since Mari, Cypriot electricity is now the most expensive in Europe, and nearly the most expensive in the world (and there is no gas line supply to homes or businesses). Crime has shot through the roof; burglaries are rife, muggings are now common. They are struggling with *serious* immigration problems. Housing is so expensive, it would be cheaper to buy in Bel-Air (I do not joke). 

Youth unemployment is escalating, corruption is endemic, and most Cypriots have lived off loans for the last ten years.

Plus they are a divided island and a pawn between Russia, Turkey, and the US/Britain, a situation that is getting *very difficult* with Syria, Iran and airspace issues.

And the idiots, in the midst of all this, have just decided to create a NHS. How exactly they will fund it, I have no idea.

Freddie's picture

A lot of the second tier Russian and ex-USSR region oligarchs moved into Cyprus.  The ones who cannot go to London to buy a football team or F1 team or who do not have a billion or more.

disabledvet's picture

Syria is "the big kahuna." Russians and Iranians on one side...Saudi's and Israel on the other. That puts the USA in its historical role of "neutral." throw in British, French, Jordanian and even Iraqi "influencers" and there's even a (remote?) possibility of something going right for "US and the others." don't understand why the Prez is wussing out here. Even Rick Perry said it should be done during primaries...