Cyprus President To Rehn: "I Told You Tax Wouldn't Pass. Regards To Mrs Merkel"

Tyler Durden's picture


Update: German chancellor, Cypriot president discussed Cyprus rescue, official says. Merkel told Anastasiades that Cyprus can negotiate on rescue     package only with troika: official.

To say that the tensions within the European "Union" are getting unbearable would be an understatement.

First, courtesy of Reuters, we get a detailed narrative of what happened before this Saturday's announcement of a deposit levy, where we learn that the deposit confiscation was initially Joerg Asmussen's idea, and we also learn that Atanasiades stormed out in anger when he learned what was about to happen.

Under a promise which still appears on the website of the Central Bank of Cyprus, deposits in its banks are insured up to 100,000 euros. Cyprus has about 30 billion euros in insured deposits, a large amount for a country of just 1 million people.


But because of its status as an offshore financial hub for foreigners - including large numbers of rich Russians - it also has 38 billion euros in uninsured deposits in bigger accounts.


Cyprus could have offered full protection to those with insured deposits up to 100,000 euros and still reached the 5.8 billion euro target by taxing uninsured deposits at a rate above 15 percent


According to three sources, European Central Bank board member Joerg Asmussen and euro zone finance ministers' representative Thomas Wieser had worked on a plan that would require just that - a high levy on only uninsured deposits.


But when the plans were presented to Anastasiades, several participants said, he balked at any suggestion that uninsured depositors should pay more than 10 percent.


Since his limit meant uninsured depositors would pay no more than 3.8 billion euros, those with small savings would have to pony up the other 2 billion euros.


The meeting was contentious, participants say. Schaeuble, Dutch Finance Minister Jeroen Dijsselbloem and negotiators for the ECB, EU and International Monetary Fund broke off several times to talk separately with the Cypriots. Other ministers hung around in the corridors, playing games on their mobile phones.


In the early hours of Saturday morning, Dijsselbloem, who serves as head of the euro zone minister's group, proposed that uninsured depositors pay 12.5 percent, a level which would require insured depositors to pay only 3.5 percent or so.


Anastasiades stormed out of the meeting in anger. He returned only when senior negotiators told him that if he left, Cyprus would have to default and shut its banks altogether.


Finally he agreed to the levy, but insisted on capping the fee for uninsured depositors at no more than 9.9 percent.


Exhausted officials did the sums. To raise the other 2 billion, insured Cypriot depositors with small accounts would have to pay a 6.75 percent levy on their savings. The deal was done.

Turns out it wasn't. Moments ago Kathimerini reported what happened later today, after as we first reported it became clear that the Cypriot parliamentary majority had swung against the deal, and shows that the bad blood between the Cypriot leader and Germany's Merkel is now boiling:

Cypriot President Nicos Anastasiades held a telephone conversation with European Economic and Monetary Affairs Commissioner Olli Rehn on Monday night to inform him that there might not be enough parliamentary support for a deposit tax on the island.


Cypriot MPs were due to debate on Tuesday a tax on deposits but it looks like Anastasiades will not be able to get enough votes to approve the one-off levy, which was decided at Eurogroup meeting in the early hours of Saturday.


Anastasiades is also reported to have spoken to German MEP Elmar Brok, a member of Chancellor Angela Merkel’s CDU party who is close to the German leader.


According to Mega TV, Anastasiades is reported to have said to Rehn and Brok: “When I warned you that there would not be a parliamentary majority to pass the agreement, you didn’t want to listen. Give my regards to Mrs Merkel.”

We eagerly wait to hear back what message Frau Merkel has for the Cypriot leader now that the entire plan to punish Russian billionaires and generate political brownie points for Angie come September, while in the process using innocent Cypriot savers as collateral damage, is about to fall apart.

Incidentally, why is any of this happening? Because a few rich eurocrats have decided that this is what is "fair."

They know best...

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Mon, 03/18/2013 - 18:20 | 3344722 Croesus
Croesus's picture

Doesn't change the fact that they thought about it, and announced where does it happen next?

Anyone keeping their money in the banks, is asking to get hurt. jmo

Once confidence dies, it's game over!

$2,500 Gold by fall.

Mon, 03/18/2013 - 18:25 | 3344736 WayBehind
WayBehind's picture

By fall? How about by July!

Mon, 03/18/2013 - 18:36 | 3344781 Manthong
Manthong's picture

“the tensions within the European "Union" are getting unbearable”

Just wait until they find out that there is no honor among thieves/bankers and that their "bail-in" for the Fed is 100% of any gold that may or may not be left here.

Mon, 03/18/2013 - 18:40 | 3344805 fuu
fuu's picture

"Other ministers hung around in the corridors, playing games on their mobile phones."

These are your deciders Bruce.

Mon, 03/18/2013 - 18:47 | 3344836 NotApplicable
NotApplicable's picture

Just be glad they had a distraction, lest they decide other unpleasant things.

Mon, 03/18/2013 - 18:58 | 3344871 nope-1004
nope-1004's picture



"Germany's leader is Angela Merkel - she's a lady!"

Mon, 03/18/2013 - 19:30 | 3344977 Rubbish
Rubbish's picture

This is a good time for Ben to the rescue. More ink boys, keep it coming.

Mon, 03/18/2013 - 19:43 | 3345040 Element
Element's picture

Time's man of the year 2013, coming up.

Mon, 03/18/2013 - 19:57 | 3345106 ArkansasAngie
ArkansasAngie's picture

Benny pisses out the money Cyprus needs every other day.  

The issue is that thisis NOT a liquidity problem ... duh.  Cypriot banks are insolvent.  

Mon, 03/18/2013 - 19:59 | 3345123 flacon
flacon's picture

Rehn is another motherfucker with a Ph Dee.... fron an Ivy League univeristy Oxford. Fuck him! It's no wonder he lacks common sense. 

Mon, 03/18/2013 - 21:06 | 3345327 Troll Magnet
Troll Magnet's picture

somewhere on this planet, jon corzine is shaking his head and saying, "amatures..."

Tue, 03/19/2013 - 01:41 | 3345916 Heavy
Heavy's picture

yeah where is that guy, shouldnt he be in jail forever or something? 

Tue, 03/19/2013 - 05:20 | 3346036 torak
torak's picture

......annnnnnd it's GONE!


Tue, 03/19/2013 - 06:09 | 3346071 jeff montanye
jeff montanye's picture

though the banksters may yet come to regret taking ten percent of the money of some of the very best and least forgiving assassins on planet earth:

that's why jamie dimon may not be as much richer than you in the future as he was in the past.

Mon, 03/18/2013 - 20:36 | 3345239 Element
Element's picture

He got the award last time for (allegedly) bailing out planet Earth ... that's what I'm referring to.

Mon, 03/18/2013 - 22:00 | 3345506 The Big Ching-aso
The Big Ching-aso's picture

"We have to pass this deposit tax in order to find out who's getting phucked."

Angela Merkelosi


Mon, 03/18/2013 - 23:13 | 3345704 TruthInSunshine
TruthInSunshine's picture

Breaking - It's gettin' real in the Chase bank parking lot...

Chase Bank Customers Report Seeing $0

NBC Southern California - 33 minutes ago‎  

Many Chase Bank customers logged into their bank accounts Monday evening to find a horrifying figure: $0. The major bank acknowledged via Twitter that the "internal issue" causing customers to see zeroed-out accounts online and on the bank's mobile app ...

Tue, 03/19/2013 - 00:02 | 3345821 lewy14
lewy14's picture

Confiscation code accidentally deployed to the production servers.

Tue, 03/19/2013 - 00:30 | 3345858 Seer
Seer's picture

Usually already well into development of a follow-on version.  I'm thinking that the next version is going to have the ability do display those fancy negative signs...

Tue, 03/19/2013 - 01:17 | 3345897 Silver Bully
Silver Bully's picture

'Breaking - It's gettin' real in the Chase bank parking lot...'


Time to repeat the remix. Aaaaaaaaand it's gone. It's all gone.


Party down like you're the 0.00000000000000000001%.

Tue, 03/19/2013 - 06:45 | 3346106 The Heart
The Heart's picture

"Breaking - It's gettin' real in the Chase bank parking lot..."


Lets see how these Americans react to their funds being stolen.

Oh, it's too early you say? OK, we will wait a month.

Mon, 03/18/2013 - 19:57 | 3345107 clymer
clymer's picture

Here's an idea:

Putin comes to the rescue with an offer to recapitalize the entire cypriot bankng system with rubles backed by gold and russian energy. Who needs Euro's anyway?

That'll teach Euro-cratic NWO pukes to fuck with Russian Billionaires

Mon, 03/18/2013 - 20:14 | 3345172 Terminus C
Terminus C's picture

Why would he do that?

Let the fucker collapse, Cyprus will come begging and he'll pick it up for pfennig on the euro.

Mon, 03/18/2013 - 20:51 | 3345273 earleflorida
earleflorida's picture

WW I, and why 'Russia' ?    'The Last Tzar now resides in American Politics?'

Emphasis on 'Wealth and Family Ties' throughout Europe?! Scroll - 'Family Background'

Hint: Rothschild's?!?!?!      Bolshevik's rebellion insues...

Tue, 03/19/2013 - 03:07 | 3345968 MisterMousePotato
MisterMousePotato's picture

Why would he do that? Are you kidding?

A. A deep water port right in the middle of the Mediterranean.

B. Cyprus (and Israel) are sitting on one of the biggest gas fields in the world (recently discovered). Right now, Europe is beholden to Russia to not turn off the gas. Were Cyprus still a part of Europe, and they were developing and exporting their gas to Europe (which is a whole lot closer than Russia, by the way, and no pesky Muslims astraddle the pipeline either).

Why would he do that?

Obvious reasons. In fact, one might almost wonder if Putin didn't somehow infiltrate the European bodies making these decisions and orchestrate this little fiasco.

And all for a few billion Euros (of someone else's money)? Not a significant amount of money in light of the above.

Finally, you can be sure that some got their money out in advance, and others are still waiting for the banks to reopen. That, I am sure, was icing on the cake for someone, probably Putin and company.

Oh, sure. He whined that he wasn't consulted.

How many troops does the U.S. have in Europe?

And why?

Mon, 03/18/2013 - 22:04 | 3345500 WallowaMountainMan
WallowaMountainMan's picture

oops, posted by another below (nat gas)

Tue, 03/19/2013 - 00:36 | 3345862 Seer
Seer's picture

Pretty much as you say.  Cyprus can't marry Russia without first getting a divorce from the EU.  Bankruptcy = divorce from the EU.

The affair has already gelled in the back-rooms quite some time ago.  What we're now seeing is a nasty break-up.  Cyprus and Russia would have long ago run off if not for this divorce thing, which will mean subjecting the Cyprians to a bit of pain first (have to make the divorce look straight up, can't introduce the groom yet).

Tue, 03/19/2013 - 01:50 | 3345921 ebear
ebear's picture

How do we know Putin isn't delighted that these guys are getting singed?

He has his enemies too, you know.


Mon, 03/18/2013 - 23:04 | 3345699 silverserfer
silverserfer's picture

Sounds like a job for "The Shadow Banker" Caped crusader of shady shit and financial buggery. Picture Bernanke dressed up like the hamburgler

Mon, 03/18/2013 - 23:25 | 3345755 tunnelvizn
tunnelvizn's picture

. . . spewing $trillion coins from his rectal oriface . 


Mon, 03/18/2013 - 19:46 | 3345020 mjcOH1
mjcOH1's picture

"According to Mega TV, Anastasiades is reported to have said to Rehn and Brok: “When I warned you that there would not be a parliamentary majority to pass the agreement, you didn’t want to listen. Give my regards to Mrs Merkel.” We eagerly wait to hear back what message Frau Merkel has for the Cypriot leader now that the entire plan to punish Russian billionaires and generate political brownie points for Angie come September, while in the process using innocent Cypriot savers as collateral damage, is about to fall apart." '


'Dear Anastasiades, I stand humbled by your leadership. Feel free to tax your citizens to fund the bailout (or not) as you wish without further involvement from the German taxpayers. Regards, Angela.'

Mon, 03/18/2013 - 20:27 | 3345210 Banksters
Banksters's picture

I just got the official Russian Mob response.  Here is a rough translation from Yuri.


Oh, yes,   go ahead and vote for the 'tax'.   BTW, how is the family?   Good,  Good.   Too bad they will die a painful death in the near future.   

Mon, 03/18/2013 - 21:06 | 3345325 a growing concern
a growing concern's picture

It seems like a lot of people in countries all over the world have finally had it with banksters and their ilk.  I can only hope this portends many banksters meeting their untimely fates at the hands of angry mobs in the near future.

Mon, 03/18/2013 - 21:19 | 3345353 DeadFred
DeadFred's picture

What are the odds Rehn and friends didn't listem when told the votes weren't there? Or they didn't have a clue on what the Russians might think? They probably had a better vote count than anyone in Cyprus. They certainly know what a screwed Russian mobster is going to think. They are playing a deeper game than most are giving them credit for but I for one don't see their goal. They put this out there knowing what was going to happen and had a reason to do it this way.

Mon, 03/18/2013 - 23:35 | 3345782 aka Gil
aka Gil's picture

Perhaps you're correct, but maybe somebody (or several people) miscalculated, got drunk on a toxic mix of arrogance and hubris or whatever. Sometimes we give these NWO types more credit for being smart than they deserve. Given the current level of backpedaling, it appears to me that somebody just fucked it all up.

Tue, 03/19/2013 - 00:07 | 3345827 jeff montanye
jeff montanye's picture

so it appears.  if they do backpedal on hitting the small depositors, they'll have to hit the uninsured big depositors harder.  yet, as jim sinclair notes, that means the kgb and those people, if you steal their money, will fuck you up.  maybe not today, maybe not tomorrow, but soon and for the rest of your life.

Tue, 03/19/2013 - 00:44 | 3345870 Seer
Seer's picture

The EU has been one big bluff.  In total it's a collection of entities that are very limited in natural resources- PHYSICAL.  And in a world that is placing higher values on PHYSICAL (because it's all limited, unlike cheesy EU money [and USD for that matter]) this is problematic.  Now that the smoke has cleared and we understand that the banksters can no longer deliver skittles and unicorns we get to meet the new bosses...

No miscalculation occurred.  The Ponzi is failing.  These folks were without ammo a LONG time ago.  If nothing else one should commend them all on an amazing acting job, pulling "wealth" out of thin air!

Going forward it means that most will fall from high places.  The BAD is that all the shit they we're toss aloft wi going to come down with them, all on top of us...

Mon, 03/18/2013 - 20:13 | 3345168 Chuck Walla
Chuck Walla's picture

I say, let Putin work his magic on them.



Tue, 03/19/2013 - 01:31 | 3345908 The Navigator
The Navigator's picture

Thanks TSP for the good article by

If I were the Cypriot PM, I'd be reconsidering that wealth CONFISCATION plan.

Still, the unintended consequences may be bank runs when the banks open on Thursday in Cyprus, and perhaps earlier in Italy, Portugal, Spain........

Mon, 03/18/2013 - 22:54 | 3345670 Mugatu
Mugatu's picture

"That's not a lady - its a man!"

Austin Powers

Mon, 03/18/2013 - 19:36 | 3345011 mudduck
mudduck's picture

This is the distraction.

Mon, 03/18/2013 - 21:30 | 3345402 This just in
This just in's picture

Exactly.  Watch the other hand.  

Mon, 03/18/2013 - 22:00 | 3345508 Its Only Rock N Roll
Its Only Rock N Roll's picture

Meanwhile, back in China...

Mon, 03/18/2013 - 19:11 | 3344910 Cap Matifou
Cap Matifou's picture

It will surely catch their attention, when Asmussen and Wieser get strung up on each other's guts, unless they pay out swiftly the russian mob bosses from their own pockets.

Mon, 03/18/2013 - 19:44 | 3345049 Iocosus
Iocosus's picture

they made google play lots of euros

Mon, 03/18/2013 - 20:40 | 3345259 Catflappo
Catflappo's picture

Perhaps they find it hard to differentiate between games and real life?

Tue, 03/19/2013 - 00:05 | 3345825 Dr Benway
Mon, 03/18/2013 - 21:19 | 3345360 Go Tribe
Go Tribe's picture

Amazing. And this kind of shit could one day determine whether we can afford to put food on our tables.

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