Cyprus Debate Cancelled, "Not Within Touching Distance" Of A Deal

Tyler Durden's picture

The situation in Europe remains fluid. 'Rumors' circulate from 'anonymous' sources but seemingly confirming what 'news' we do have from Olli Rehn that there is no deal; Xinhua reports that the Cypriot Parliament has cancelled the debate over the deposit levy for today (following daylong negotiations with the Troika). Further to the 'no deal' meme, ekathimerini is reporting, via another senior Cypriot official,


“We are not in touching distance of an agreement,” the official, who preferred to remain anonymous, commented adding that the impasse was a result of the “inflexible” stance of the IMF - "Every half hour, new demands are made." Further comments indicate the 'low levy' on the rest of Cyprus-based bank deposits has been abandoned - implying a potential 25% haircut for Bank of Cyprus deposits. 


The IMF insists that the bank be split in a good bank to take over guaranteed deposits of under 100,000 euros and good loans and the bad section to be left with deposits of over 100,000 euros and the bad loans be liquidated after some years. The same official said the IMF also insists that the good sections of the two banks be merged.


Via Xinhua (from Bloomberg),

The same sources said Saturday's negotiations centered on a levy to be imposed on deposits in the Bank of Cyprus, the island's largest lender.


An alternative option to impose a low levy on deposits in about 26 foreign banks operating in Cyprus was abandoned as potentially wrought with problems, including legal ones.


The state broadcaster said that abandoning the option to tax all deposits would possibly mean increasing the levy to up to 25 percent on Bank of Cyprus deposits over 100,000 euros (about 129,000 U.S. dollars), so as to generate about 2.8 billion euros.

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Anglo Hondo's picture

If this doesn't say that the EU wants Cyprus out of the club, nothing does.

Prepare for the fall of the EU Empire (of idiots).


Irelevant's picture

That is a bit Kamikaze even for the EU. Probably the Commission snorted to much cocaine.

caconhma's picture

The Russian oligarchy money-laundering model is not working anymore. For more than20 years, Russian oligarchy plundered Russian people, and now their money was confiscated by the Zionist Banking Mafia. Well, there is no honor left amongst thieves and gangsters anymore. It is just awful.


Who is next after Berezovsky. I could not be just a one-man show.

kaiserhoff's picture

Well, this clears up a couple of things:


1. The Cypriot banks have not just lost their capital.  They have lost a multiple of their capital.

2. The Jew Bankers running this show would rather drive all of Europe into the ground than imperil their lousy 2 billion of "senior preferred."

    Stupid is as stupid does.  The Russians are thugs, but they are not idiots.

SamuelMaverick's picture

One of the functions of cental banks is to 'save' banks when they need to be recapitalized for the exact scenario that is occuring in Cyprus. The amount of money that would be required to recapitalize the banks in Cyprus would not be seriously inflationary because of the amount of money vaporized by all the defaulting sovereign debt.  The amount of money that they would print would not only save the depositors, but would also save all the cascading chain of secondary and tertiary  counterparties that are going to get shit - hammered when these banks fail.

      Stealing depositors savings ( or just even the threat of stealing the deposits ), and the resulting effect of the banks no longer being a safe place for anyones money - will result in disasterous long term consequences for the entire banking system in Europe. They have already let the cat out of the bag, and there is no undoing what they have done.  Money will go where it is treated best, that is under a mattress or in a home safe.  

     The only reason that TPTB could be doing this is because they must want a complete collapse of the economy. They want money to go into hiding.  The last depression (where no one trusted the entire banking system) lasted 25 years. 


morning's picture

If I were a cypriot MP I'd be living inside a steel box under the arctic for the next twenty eons.

toys for tits's picture

Abusers are never satisfied. Their demands will continue to escalate.  

Hopefully, this is starting to dawn on the Cyprus MP's and they will let the bad banks go bankrupt. Fuck equity and the bondholders.

Assuming the banks have zero, the ECB should still be liable for all <100k euro accounts and Cyprus could cram bonds guaranteed by natgas down on the account holders that they would've otherwise defaulted on.  The bonds would obviously be traded at less than par.

Who thinks Blackrock has CDS exposure if the banks fail?  

Larry Fink admitted that he was a consultant to the Cypriot government.

Buck Johnson's picture

You think this is about Money Laundering operations, it's not.  Look at the Cayman Islands, Isle of Mann, Switzerland, Luxembourg etc..  Those places launder money and to be honest with you they are having serious problems financially also (it was in the news a few years ago that Luxembourg banks are financially insolvent).  I read an article on ZH a few days ago talking about how black accounts aka dark money is used around the planet and I'll add another.  If your a oligarch or a ruler of a country that is hiding your money lets say an easy 1 billion dollars (I know there are people who have a few million but the more money you have the better the concierge).  That money is put into banks in said countries, what do you think the bank is doing with that money besides charging a fee?  The are using that money just like any other bank in leveraged operations and "secure" loans.  And in their minds they most likely did the derivative thing and also pay for insurance just in case it doesn't work out it pays the full amount on the derivatives.  You have to look at it from the point of view of the banks, there hasn't ever been a failure of the derivative system, ever (but now it's come to pass). 

That money and other hot money and oligarch money and such is tied up in much of these banks along all the lines I described.  So if the Derivative system goes down or Cyprus goes into default it means it's bonds and other financial instruments that are associated with the country are in trouble.  Of course the investors would say this credit event would be call for the insurance to come into effect (where the insurance pays the full amount on the bonds and the derivative contracts on thos bonds and on and on).  Since we know the derivatives around the planets if in the quadtrillion, lets say that all the contracts on just Cyprus is a 200 billion.  The banks or AIG (the insurance company that insured most of the derivative contracts) don't have 200 billion (and that is the contracts that is known, remember the derivative market isn't regulated it could be alot more and most likely is) to pay out.  And if they don't pay out then the banks and the insurance company are bust and then not only is the minimum 200 billion dollars they contracted on is not collectable it makes the rest of the bonds and derivatives that was put out there and insured to be suspect (really outright fraudulent).  It's starts a cascade of people trying to redeem billions and trillions that isn't possible.  That is the reason why Cyprus isn't important, it's not their economy it's the fact that who have been insuring there derivatives and bonds can't make good and in so being can't make good on the rest of the planet.

I think the reason why Germany and a few others pushed Cyprus was one big reason, I think Germany wants out o the EU (they are essentially the bank of the EU anymore) but everytime they hint and haw about leaving and such they get shamed via the Hitler and WWII and Germany destroying europe again that they back off.  By pushing Cyprus they can make it seem that Cyprus is the one to blame for the destruction of the EU and euro.  This sounds foolish but in Germany's mind they think that they can weather the storm.  I don't think so but who knows.

TraderTimm's picture

What amazes me about this situation is Russia hasn't parked a destroyer out in the water with its mighty guns trained on the parliment building.

Or maybe they have a sub waiting for an order, who knows.

AlaricBalth's picture

There are dozens of Russian banks which are domiciled outside of Cypress that were set up specifically to funnel money into Cyprus banks, specifically The Bank Of Cyprus. If and when this bank goes, so do these Russian Banks. Here is one of many:

Russian Commercial Bank Ltd
Company Description: RCB provides its Clients with a banking environment that is securely based in the European Union, has the advantages of the Cyprus flexible tax legislation, is in touch with the realities of doing business in the former Soviet Union, and understands the ever-increasing service needs of the Russian businesses. Our strategyReliable and trustworthy expertise provided to the clients, complete confidentiality of client information, reputable and untarnished reputation within Russian business circles and Cyprus community. Shareholders and managementPossessing a Vneshtorgbank's guarantee on all its obligations, Russian Commercial Bank is supported by the biggest Russian banking institution.!search/profile/company?companyId=160989449&targetid=profile

The General Director of this Russian Bank is Nikolai A. Anoschko. Nikolai also has another currency algorithm trading operation registered in Cyprus through the Central Bank of Cyprus ICIS registry.

There are many more. Cyprus could not only cause contagion in Europe but will likely spread to the Russian banking system.

machineh's picture

Eh. Wasn't there some nastiness back in 1998? They called it the 'Russia/LTCM crisis.'

Russia's back in the tank, you say.

And this time, the Federal Reserve's PhD morons are playing LTCM, with huge leveraged bets that couldn't go wrong.

Bernanke's biography will have to be titled, When Genius Failed (Part Deux).

StychoKiller's picture

Man, and Russia with all them tanks, aircraft and gasp, Nukulure weaponz!

kaiserhoff's picture

Today's Ruskies are not the Soviet Union.  They have plenty of nukes and polonium.  Other than that, not much.

They start showing subs about 2 minutes into this.  Most of them were scuttled in the harbor.  Latvia?;_ylt=A2KLqIMTJU5RYSAANVn7w8QF;_...


tbd108's picture

It has been pointed out elsewhere that all the flights from Moscow to Cyprus all full these days (even though it is not tourist season). I suspect this is enough to get the Cypriot "leaders" attention.

Tango in the Blight's picture

What amazes me about this situation is Russia hasn't parked a destroyer out in the water with its mighty guns trained on the parliment building.

Or maybe they have a sub waiting for an order, who knows.

johngaltfla's picture

I doubt the Russians could offer that dyke Lagarde any more muff than the Cypriots. It's an IMF issue now and if I were Cyprus, I would say "we have oil, go fuck yourself."

TomGa's picture

John - you should do a special ed. of JMR about all of this.

Grimbert's picture

They want Cyprus out but think they can stop contagion. 

glenlloyd's picture

When have they ever been right about anything....never. The risk of contagion increased 10x the day they first announced their (blundered) plan to 'tax' Cypriot bank accounts...even those under 100k. Every day since that time that Cypriot banks were first closed has likely increased the anxiety in other peripheral countries in the EU. The implication of what the troika / IMF is doing to account holders in Cyprus will become relevant to all other peripheral country citizens and beyond I would think.

This is so bad, the troika is just flailing all over the place...and the IMF, they're never there to help, just making more trouble. The IMF should be closed down IMO.


Stoploss's picture

Smell that??


Smell like, global rebellion.

I think this is gonna get real ugly, real fast.

Mentaliusanything's picture

The interpreter got it a little wrong. what was actually said was " Not a snowballs chance in Hell"

 but its all greek to me.

Legolas's picture

I'm not sure TPTB want a deal.

swissaustrian's picture

Seems like the IMF is really blocking any progress ("inflexble position"). They also came up with the deposit tax idea in the first place. Assuming the IMF represents the US, then the US wants to open up another front in the covert war with Russia:

1.) Fight a proxy military conflict in Syria (and Iran).


2.) Confiscate Russian deposits in Cyprus, amoung them massive amounts of Russian intelligencia money.

IridiumRebel's picture

So who is handing out the Molotovs there? Lets get this party started!


Cdad's picture

Fifth grade math students in Cyprus cheer!  

As EU technocrats and CY politicians continue to struggle with the concept of simple math, Ms. Whocouldanodios commented, "My students have worked really hard on ratios this year, and I'm so proud that their work was received by the IMF in time."

In France, a group of 3rd grade math students are gathering to protest how unfair ratios really are.  It is unknown if 2nd grade Irish math students will join in the demonstration.

In Iceland, the Math-out-Loud event scheduled for tomorrow just picked up the endorsement of the American based group The Little Urban Achiever's Conclave...whose spokesman was laughing too hard to provide comment.  However, an unnamed source with close ties to the organization has said that the founder's comment was, "Careful man, there's a beverage here!"  

Will they are won't they?  Can they...or can they not?  Just how 10+7=100 is yet to be the IMF, the ECB, the EU and math fans everywhere struggle with the problem. 

More as news becomes available to us...


NEWS FLASH...2nd grade Irish math students showed up at the Protest Against Unfair Ratios demonstration in France.  But it wasn't their support they came to offer.  Instead, the scene became violent, as Irish 2nd graders beat the crap out of their 3rd grade French counterparts.  It was pandemonios!  When the teacher of the Irish 2nd grade contingency was asked for comment, she said, "It was an unfortunate and misplaced expression of a lesson she had recently covered with her students on 'principle.'"  

lolmao500's picture

Anyone trying to do a deal with those Troika slave traders should have their teeth kicked in then be arrested and put in prison.

Brit_Abroad's picture

Oh boy. Bring it on already.

Light the fuse and jump ship.

Its Only Rock N Roll's picture

Now that the " Berezovsky message" from The Russian Billionaires Club has circulated a deal will be hard to forge that imposes deep haircuts on their money.  Jut sayin'

Bunga Bunga's picture

Letters from Moscow coming in by the minute.

Lost Word's picture

Maybe they are waiting until Obummer gets back from vacation.

mjorden's picture

Cyprus should exit the Euro, and open up shop to compete with Gitmo.  They are literally right 'there', it will save the US a lot of transportation (and P.R.) costs. marginal benefit = AMAZING, marginal cost = leaving Europe .. hmmm, choices.

Urban Redneck's picture

Gitmo... Cuban Missle Crisis... Cyprus has... "extra" Tupolev Tu-95 capable landing strips on that side of the island, a pre-built military base that the existing NATO lease could be revoked on, and relatively easy construction of a pier to resupply an SSBN... Something tells me the west's first string team isn't so good at poker if things moved in that direction, and the US could actually cave into foreign expansion demands rather than send a few hours worth of .gov spending that Ben can effortlessly whip up in a matter of minutes to prevent such a humiliation and strategic defeat.

Iam_Silverman's picture

"and the US could actually cave into foreign expansion demands rather than send a few hours worth of .gov spending that Ben can effortlessly whip up in a matter of minutes"


Uhhhm dude, have you forgotten? - SEQUESTER, hellooooo...............


Urban Redneck's picture

Both Barry's Golf allotment and CIA petty cash have more than enough (not that Benny & the Inkjets need Congress's permission anyway).

The ever-widening Schauble gap is chump change compared to what these spend regularyly, but it just isn't practical/possible for a tiny island like Cyprus, which is why the while thing is so sick.

The Invisible Foot's picture

"Fuck it, lets go bowling."

lolmao500's picture

Nihilists! Fuck me. I mean, say what you like about the tenets of National Socialism, Dude, at least it's an ethos.

freeasabee1's picture

there is no truth, and everything is permitted!?  let's ride!!!!!


I once dabbled in pacifism, not in Nam of course

yrad's picture

Like playing poker with my sister's kids...

HD's picture

There will be a "deal" - bankers always get what they want.  Love to be wrong, but when push comes to shove the politicians always cave.

fonzannoon's picture

HD, let's say there is a deal. Whatever it is.

Who cares?

They open thedoors to those banks after that deal is struck and those banks are emptied immediately, and they know it.

So hoe does a "deal" solve anything?

Irelevant's picture

Knowing that wouldnt you prefer a no deal? Someone to take the blame? There will be no deal, banks will not open, capital controls are against the EU Treaty.

fonzannoon's picture

ekm are we going to hear that a European PD is heavily exposed to Cyprus credit this week?

ekm's picture

There are too many moving parts. It's like a russian doll. People are committing suicide.


I can tell you one thing  though, the news that IMF is making new demands by the hour means only thing:

They are waiting for orders from the White House, whether Obama (or whomever is behind him) will give the order to Benny to bailout Cyprus.


The situation reminds me of AIG. After Lehman bankrupted, 72 hrs later the Fed found money to bailout AIG. The reason: As per Art Cashin's interview to Kingworldnews few months ago, european leaders called the White House and begged for AIG bailout.