Europe's Final Gambit: 20%-30% Haircut For Oligarchs To Force A Russian Bailout
It now seems sure that the ongoing discussion in Cyprus' government will see a "no" vote as the WSJ is reporting a rather stunning gamble by the Cypriots (and by Cypriots we mean European leaders) to force the Russians to bear the brunt of the cost of the bailout. The non-resigned Cypriot FinMin is heading to Russia to propose a deal that includes imposing a 20% to 30% levy on Russian-held deposits in Cypriot banks, which could cost them billions of euros. In exchange, Russia will be given equity in Cyprus's future national gas company and some additional strategic benefits in the sector, while Russian investors would be given control of the board of directors at Cyprus's banks. The apparent quid pro quo in this deal does nothing to hide the fact that private property was stolen and while pointing fingers just at the Russians may play well for PR purposes, it is described as "a long shot" as the Kremlin notes, "it's practically impossible to talk without knowing details."
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The official said that Michalis Sarris, who is being accompanied by a delegation of businessmen, is going to propose a deal that includes imposing a 20% to 30% levy on Russian-held deposits in Cypriot banks, which could cost them billions of euros. In exchange, Russia will be given equity in Cyprus's future national gas company and some additional strategic benefits in the sector, while Russian investors would be given control of the board of directors at Cyprus's banks.
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However, the deal looks like a long shot. Ahead of the visit, Kremlin spokesman Dmitry Peskov said: "It's practically impossible to talk without knowing the details."
"The situation is very difficult--unprecedented--and we don't understand what's happening," he said. Mr. Putin hasn't spoken to his Cypriot counterpart, he added.
"We don't know about the visit [on Wednesday] because we have information that the [Cypriot] finance minister has offered his resignation. Since we don't know if Cyprus has a finance minister, we can't comment on proposals that he might make," he said.
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Mr. Anastasiades hinted that the government is already working on a plan B. "We have our own plans," he said.
(8 votes)
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I got an idea! Let's play hardball with Putin! He's bound to fold like a cheap tent...
Yeah, Plan B. Perhaps a year or two late and a couple billion Euros short? Not that this was all unforeseeable...
As the ever-depricating value of fiat becomes ever more obvious, if I was Putin, I'd take an 15% cut, insist on future gas revenues, and a Cypriot port for tankers and the occasional warship to ''monitor the situation'', which in turn would of course become a full fledged Russian Cypriot naval base.
Who is going to England to impose a levy on the Limeys in order to keep their naval bases in Cyprus?
And just how much are they paying a year in rent for all that beach front property?
Call it an Empire Tax.
That's not fair, we invite them over all the time for tea and biscuits, and maybe even a scone if they play there cards right.
So take the money from Russian Mafia, then give Russia control of the banks and natural resources, so there is no way to restart the economy after ultimate failure...GENIUS. I'm long mafia kidnappings in Cyprus.
You aren't wrong man.
Ask the FEDS about the broad daylight shootings and kidknappings by Russian Mafia up in Brighton Beach Brooklyn or MI5 about the hits like Alexander Perepilichny in London.
These clowns picked the wrong group of people to mess around with this time, someone will end up being made example off because they entertained the very principle of stealing Russian Mafia money.
It aint no boogey man story, these guys are real, well trained, well organised and international and don't give a fuck, someone is going to end up vanishing or falling out of window, getting lost at sea or having a weird accident or death. It could be this week, it could be six months from now etc. etc. but it will happen to send out a message you can bank on it
Finally good news.
how you say sleeps with da fish in russian?
Hey! There's a finger in my caviar!
I know I can bank on it - the problem is, which bank?
If we're lucky, some banksters will be sleeping with the fishes
some additional strategic benefits in the sector
Russia Wants Naval Bases Abroad, Navy Chief Says07/27/12
http://www.huffingtonpost.com/2012/07/27/russia-naval-bases-abroad_n_170...
Deepwater ports:
http://en.wikipedia.org/wiki/Famagusta
As long as you ignore the fact that Famagusta is actually the capital of the Turkish Republic of Northern Cyprus...: http://en.wikipedia.org/wiki/Famagusta
My theory on all this is that the west is forcing Putin to action on behalf of their ultra-wealthy, which (they hope) will seriously start to undermine his support for the common Ruskie.
Time to start taking him down a notch..??
Common folk don't follow this sort of thing in any detail, but even if they do, the issue of depositor theft resonates with everyone.
I think the price of LNG next winter will be the Russian response. Whatever Russian "oligarchs" lose will be reimbursed quickly by Gazprom customers in Europe.
Be sure that nations on the Russian periphery are re-examining their choice of friends.
Maybe the Chinese would lend a helping hand...?
Yes, it will be interesting to see if the natural gas supply to the EU (from Russia) is interupted by this.
Keep in mind that Cyprus is a tax haven. I'm sure that has something to do with this decision as well.
Maybe it sends 2 messages - one to tax dodgers (run with your $$, but you can't hide it) and one to Putin (get ready to have your chain rattled).
Yah. This is very much on par with the recent quest by American authoritah for tax-dodging evildoers in Switzerland and the Caymans. There's a sense that esoteric circles are engaged in some process of weeding.
Plan B : The USA buys Cyprus and gets the rights to the Natural Gas.
Brilliant idea - put the ruskies in charge of banking AND give them hard oil assets as well. And this is an improvement?
The Bear chuckles, back in the old days they had to invade the place for these sorts of benefits!
Cyprus doesn't even have any Mujahideen.
Putin is not a happy man.
http://d3j5vwomefv46c.cloudfront.net/photos/large/746959306.png
I wonder if those Mi-24s they sold the Cypriots had hidden self-destruct mechanisms....
We'll be selling the Bakken to the Chinese soon enough in return for debt forgiveness.
"Brilliant idea - put the ruskies in charge of banking AND give them hard oil assets as well. And this is an improvement?"
The Russian offer was to bailout Cyrpus, and in exchange, Gazprom would get the oil and gas rights.
The Cypriot counteroffer is that Russia bails out Cyprus, and in exchange, they get shares for X percent control of the banks and the soon-to-be created Cyprus State Oil and Gas company.
While it seems they are giving them both the banks and the oil and gas, the difference is in the percent of control of each, and in having the gas company owned by Cyprus rather than Russia.
How is Putin any worse than the EUSSR, Obummer or the US House and Senate? I bet you voted for O.
Putin doesn't even give you an "Islamic" ritual burial at sea within 24 hours. He just pisses vodka on your corpse.
Makes me wish I were Russian...
YouTube has some of the RT videos of the Russian Navy dealing with Somali pirates. The Russian do not do politically correct with Africans like Hope & Change. Putin knows Amerika is a joke now.
The Somalis are target practice for the Russians.
"Mr. Putin hasn't spoken to his Cypriot counterpart, he added."
There is another bad-ass as bad-assed as Putin? And he's from Cyprus?
WTF man, that's blowing my mind.
Wait hold on. I get a bad feeling. Let's not ever let these two sit down over lunch or anything.
I lol'd +1
Yeah, Russia getting their hands on more of the energy supply Europe needs is a win/win for Russia and a monster loss for Europe. Europe will pay for this big time.
Long Russian equities and gold.
They should search Reddit for Putin explosion, that might make them think twice-
http://i.imgur.com/lfO1x.jpg
http://imgur.com/TMfGi
http://i.imgur.com/WlAAZ.jpg
http://i.crackedcdn.com/phpimages/article/2/7/5/50275.jpg
http://imgur.com/a/6Y94A
Why would Putin explode a PAK-FA is beyond me...
"The non-resigned Cypriot FinMin is heading to Russia to propose a deal that includes imposing a 20% to 30% levy on Russian-held deposits in Cypriot banks, which could cost them billions of euros."
There is a decent chance that the Cypriots will be getting their FinMin back one fingertip at a time.
Drama. I wonder if THIS was the real destination all along. Make it formal that this is a Russian banking system, give them the GAZZZ.
Backdoor Russian bailout in exchange for gas?
That was it all along...all along.
backdoor… gas…?
I just hope we don’t end up with an explosive situation.
That would make for an interesting military confrontation between Turkey and Russia. It's absolutely laughable to offer the Russians resources (in exchange for their own bail-out) that they already have plenty of - and that Cyprus cannot get its hands on anyway. Talk about mortgaging your neighbour's house...
Turkey?
You realise the UK has 2 military bases there? It ain't happening.
Yaz, motivation is the key. What does it mean if Ben doesn't bail them out, which he could easily do with a repo, a CDS deal, a reverse triple sowcow..., WTF? There is no audit. They can counterfeit anyway they want.
If Ben doesn't bail them, it must mean that God/Lloyd likes the idea of a disorderly collapse of the Euro and is already positioned for it. Gawdhelpus.
I love all this "free market" shit we've got going on.
Indeed. This is the point where the Monopoly game gets a little wild, nobody is taking turns to roll the dice, but everyone is making side deals...trading Marvin Gardens for a blow job and Vermont Avenue for two beers. What is that? The Free Parking money is missing? Go figure.
Your Monopoly games get pretty wild. Congrats. Sounds like fun for you and your wife. I need to get my husband to play, I had no idea...
Is that a "spot" bj or futures? It matters as bj futures are in strong backwardation (counterparty risk).
Paul "I Was For the Federal Reserve Inflating A Housing Bubble Before I Was Against It" Krugman just tweeted that there should be 100% confiscation of Russian deposits in exchange for a 100% stake in Cyprus's strategic missile defense shield.
It's all about da' gas!