Cyprus Bailout Needs Rise By €2 Billion As Conditions Deteriorate Rapidly

Tyler Durden's picture

A week of closed banks, depositor angst, and economic malaise is creating an increasingly vicious circle for Cyprus (and implicitly the European Union). As Die Welt notes, because the economic data of the tiny 'irrelevant' island could be considerably worse than previously thought (or forecast by Troika) thanks to the distortions created this week by bank closings, several people around the Troika said the exact amount of the bailout remains uncertain and could amount to EUR2bn more than expected. With the Troika capping their handout at EUR10bn of the current EUR17bn needed (and the deposit levy reportedly filling EUR6bn of that EUR7bn hole), the need for a bigger bailout - which seems increasingly likely - will fall on Cyprus banks' depositors (or taxpayers) leading to a hard-to-beat downward spiral. Simply put, the more deposits are pulled, the more deposits need to be confiscated; and with retailer stocks running low ("will last another 2-3 days") and cash-on-delivery demanded, the real economy will "have a problem if this is not resolved by next week."

Via The Guardian,

Retailers, facing cash-on-delivery demands from suppliers, warned stocks were running low. "At the moment, supplies will last another two or three days," said Adamos Hadijadamou, head of Cyprus's Association of Supermarkets. "We'll have a problem if this is not resolved by next week."

Via Die Welt (and Google Translate),

Cyprus needs a lot more money than expected


A few hours before the emergency meeting of the situation seems to capture from bankruptcy Cyprus to deteriorate: From Troika says that money could not exceed the estimated range.


Cyprus needs for information of the "world" more money to bail out its banks and the stabilization of its national budget. Not initially agreed 17 billion euros were enough states in the field of negotiations. The exact amount is not certain. Several people around the troika said the "world" that the increased demand would amount to around two billion euros.


Because the economic data of the island nation could be worse than previously thought, additional billions are needed. One reason for the expansion of the bailout, the distortions caused by the closing of the banks, which has been going on for a week. The financial institutions will not open until next week again.


The troika of EU, European Central Bank (ECB) and International Monetary Fund (IMF) had agreed originally with Cyprus on a rescue package amounting to 17 billion euros. Ten billion would provide the troika, the remaining seven will apply even Cyprus.


Almost six billion would achieve the Cypriot government by the proposed compulsory levy on savings. More money to flush tax increases, such as the increase of the corporate tax in the state coffers.



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BaBaBouy's picture

Cyprus ...

Tick... +1 Billion, Tock +1 Billion, Tick... +1 Billion, Tock ... ...

francis_sawyer's picture

Last week I was thinking about digging in to the cookie jar & spotting them the

€2 Billion... But then I got 'Stolper-ed' out on a trade & lost my cushion...


Sorry peeps ~ You're on your own... [unless you can hold on about a week ~ by then my bitcoins should cover it]...

machineh's picture

Cyprus Bailout Needs Rise By €2 Billion PER DAY As Conditions Deteriorate Rapidly

Fixed it for you. 

Not a joke, either -- progressive disclosure is an ironclad rule of goverments.


francis_sawyer's picture

Kind of like when you reach that $25,000 limit on your credit card that you piled up at 0% interest & then the bank switches your rate to 27.99% interest overnight...

Ahmeexnal's picture

Cyprus should mint a trillion euro coin (made out of zinc of course) with Merdekill on the obverse and her daddy Adolf on the reverse.

Brokenbroker's picture

Or three of em. You going thru my mail?

zipit's picture

Used for everything from finance to body counts after a disaster to just about every other indicator that they ever mention, espeially the ones that come with a subtext of "We got this under control, there's nothing to worry about."

Son of Loki's picture
Breaking News that Counts: Incredibly tough guy finds knife in back 3 years after stabbing


Billy McNeely, a man who recently discovered a nearly three-inch knife blade embedded in his back, three years after being stabbed five times in a fight over an arm-wrestling contest. Because this story just had to get more masculine. McNeely then walked around setting off metal detectors for three years before discovering the blade. He says he feels fine now, and of the knife, said, "I've got it in my pocket right now."


MSM's finest!

akak's picture

I suspect that the people of Cyprus are starting to understand how this guy felt.

Buck Johnson's picture

You hit it right on the head, it's going exactly like that.  Also we only know what has been "figured out" by the EU at what is needed, it could be more.

MsCreant's picture

This needs a special one: FUBAH = Fucked Up Beyond All HOPE.

francis_sawyer's picture

My grandmother was named "Hope"... She's dead...

Going Loco's picture

Edit: Just realised I had posted a reply to Francis Sawyer.... 

Kirk2NCC1701's picture

Chastity is now Chaz. Was on Dancing With The Stars.

Ancona's picture

At this rate, the banks can never open again, because the minute they open their doors all hell breaks loose. Tuesday will be quite interesting indeed. I smell a Cypriot exit from the union. They are probably working overtime printing new Cypriot pounds as I hack this out. Either that, or they are over-printing on old Euro notes.

philosophers bone's picture

It will be interesting on Tuesday to see if the Cypriots line up at the ATMs or at the bankers' personal residences.... 

e-recep's picture

Only to find out that the ATMs spit out bills of a strange new currency, not Euro bills...

Kirk2NCC1701's picture

Dollars, Rubles or Shekels?

Dr. No's picture

Why would they over print EU notes? There is a shortage of EU notes, hence their value is high.

Rip van Wrinkle's picture

They can print as many Euro notes as the like. Problem is no f*cker can get hold of any!

disabledvet's picture

NOW you're asking the right question. "what defines bank capital." if it's no longer "how many euro notes are on deposit" then what is it? i can't think of anything other than gold actually. and that would be for ALL of Europe! needless to say "not all banks are insolvent." the first "coup by banker" in history?

Nobody For President's picture

Have a friend who's fiance was named Hope.

She was killed by a drunk driver.

Banksters's picture

This is a ritualistic sacrifice.   I'm sure draghi, lagarde, vanrumpy, and barroso are in long black robes with hoodies chanting incantations as Cyprus has a knife plunged into its heart.

richard in norway's picture

OK, I'm kind of stupid but Cyprus controls one side of the news headlines and the markets have been yoyoing like crazy on news coming out of Cyprus. They should have made enough money frontrunning the market to pay their bills by now. At least That's the way I would have played it

ShortTheUS's picture

Anastasiades should walk into the Troika meeting room and say: Fuck You Bitchez! Then ask for Euro bank notes in all denominations to be stamped with a special seal that denotes them as being new Cypriot pound (XCP?) and shipped over to Cyprus until they can print their own currency in a few months.


As Banzai Bill would write it: PhUcK Da BAnKStErZ!

mjcOH1's picture

"Anastasiades should walk into the Troika meeting room and say: Fuck You Bitchez! Then ask for Euro bank notes in all denominations to be stamped with a special seal that denotes them as being new Cypriot pound (XCP?) and shipped over to Cyprus until they can print their own currency in a few months."

He should ask for a pony and an extra $20bllion while he's at it.

Ahmeexnal's picture

This is not the 12th century.
Printing paper money for Cyprus would take hours at most.
Cyprus is only making time for the Russian Navy to arrive and protect the island from a NATO invasion.

fonzannoon's picture

this is starting to sound exactly like the london whale trade. tempest in a teapot, then a few billion more than anticipated, then it was free handjobs to whoever would help them unwind the trade.

I am just patiently waiting for the bank/insurer to leak a headline on how they are quietly trying to exit an "incredibly small" position in cyprus debt. It's coming.

nodhannum's picture

"free handjobs to whoever would help them unwind "?  Hell, I would like to unwind but I want more than a freak'in handjob.  Come on ECB get down on your knees!

MsCreant's picture

So are they adding the late fees and interest to the principal, and then charging interest on that? Cancel the fucking card!

fonzannoon's picture

MsCreant I thought they just run up the bill for a while and then refi it at a fixed rate for life? 

I am not familiar with the "cancel the card" approach.

MsCreant's picture

I may have fucked up on this, maybe someone else can tell us.

I have watched more than one relative go BK. One had 50K debt go to 77K over the year he did not use the cards. Seems you have to not use the card for a year or you are committing fraud when you go to BK. So folks, knowing they are going BK, simply avoid all the phone calls from the creditors, wait the year, then file. The interest, fees, penalties, pile up when you don't use the card which is how the debt ballooned so much. I thought if you cancelled the card, that stopped that part of the process in its tracks. I may be wrong and if so you asked me about that very nicely.

slightlyskeptical's picture

You don't need to wait the year before filing. Cancelling the card does nothing, as the card already can't be used. If you try to use it they will have retailer destroy it. Amex starts proceedings after 60 days. Will seize bank accounts, etc if you do not file, leaving ost people with Amex little choice.

skipjack's picture

Wrong.  No creditor can seize anything from the debtor without first having a court judgment.  Just to get the court date often takes months, then there's the 30 day after the court's decision for the appeal, etc etc.  The process takes some time to play out.  In the meantime, the debtor needs to get a joint account with another person not named in the credit action; accounts can't then be seized.  

Going Loco's picture

No, too late to cancel the card.

This is just like a car crash - first you see the smashed bumper and windscreen, then you realise the suspension's gone and the engine has shifted, it goes on until you come to terms with the fact that the thing is a write-off.

Same with bankruptices in my experience. At first everyone thinks there will be a distribution and it even takes a while before the bankrupt herself realises there's nothing left for her except what she was able to steal before the writ was issued. Then as time goes on everyone realises there's only a tiny amount of recoverable assets, and then you find out they are all being taken by the liquidator as expenses, and by the time of the final creditors' meeting the only people who bother showing up are the liquidator's staff and a couple of private creditors who just want a chance to sound off about their total loss. Always the same.

Cyprus was bankrupt the moment the banks closed. Never any going back from that. Never any chance to get your money back. When Northern Rock went belly up in 2007 it stayed open until all the depositors got their money. When a bank closes it never reopens and there is never anything left for anyone except those who got out before it closed.

glenlloyd's picture

By the time they have an agreement everything above 100k euro per depositor will be confiscated....

Bam_Man's picture

...And the bondholders shall remain whole.

That is "The 11th Commandment".

machineh's picture

... and then the blame is assigned to bystanders and nonparticipants.

12th commandment!

Mongo's picture

Rinse & Repeat

A Man without Qualities's picture

My guess, there was a lot of money pulled out the week before the closure and the Cypriots don't want to tell them..

Water Is Wet's picture

And I bet all you fools thought Cyprus has a problem now.  They don't have a problem for another week.  Cyprus' head of supermarkets wouldn't lie.