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Eurogroup Press Conference - Live Webcast (And Full Eurogroup Statement)
It's 2:30am, do you know where your deposits are? Tune in to see the Eurogroup explain how this is in the best interest of the Cypriot people, how the 'deal' illustrates the solidarity of the European people, and how the worst of the crisis is now behind us.
- *SCHAEUBLE SAYS CYPRIOT DEAL NEEDED BAIL-IN AT BOTH BIG BANKS
- *SCHAEUBLE SAYS MUCH WORK REMAINS TO BE DONE :BOCY CY, CPB CY
- *SCHAEUBLE SAYS TIME LOST ON CYPRUS, SITUATION DIDN'T IMPROVE
- *EU COMMISSION SAYS NO CYPRUS PARLIAMENT VOTE NEEDED: SCHAEUBLE
- *SCHAEUBLE SAYS TROIKA TO CONTACT RUSSIAN GOVT ON DEAL :BOCY CY
Live Webcast here...
Here it is - in all its glory. The full Eurogroup statement explaining how there is no need for the Cypriots to vote on this, how Laiki bank is totally liquidated with equity, debt, and uninsured depositors wiped out, and how they believe in some way that this will not end in a disorderly process...
- *DIJSSELBLOEM SAYS DEPOSITOR LOSSES STILL TO BE DETERMINED
- *REHN SAYS EU TO PERFORM NEW CYPRUS DEBT-SUSTAINABILITY STUDY
- *DIJSSELBLOEM SAYS LAIKI BANK TO BE RESOLVED IMMEDIATELY
25 March 2013
Eurogroup Statement on Cyprus
The Eurogroup has reached an agreement with the Cypriot authorities on the key elements necessary for a future macroeconomic adjustment programme. This agreement is supported by all euro area Member States as well as the three institutions. The Eurogroup fully supports the Cypriot people in these difficult circumstances.
The programme will address the exceptional challenges that Cyprus is facing and restore the viability of the financial sector, with the view of restoring sustainable growth and sound public finances over the coming years.
The Eurogroup welcomes the plans for restructuring the financial sector as specified in the annex.
These measures will form the basis for restoring the viability of the financial sector. In particular, they safeguard all deposits below EUR 100.000 in accordance with EU principles.
The programme will contain a decisive approach to addressing financial sector imbalances. There will be an appropriate downsizing of the financial sector, with the domestic banking sector reaching the EU average by 2018. In addition, the Cypriot authorities have reaffirmed their commitment to step up efforts in the areas of fiscal consolidation, structural reforms and privatisation.
The Eurogroup welcomes the Terms of Reference for an independent evaluation of the implementation of the anti-money laundering framework in Cypriot financial institutions, involving Moneyval alongside a private international audit firm, and is reassured that the launch of the audit is imminent. In the event of problems in the implement ation of the framework, problems will be corrected as part of the programme conditionality.
The Eurogroup further welcomes the Cypriot authorities' commitment to take further measures.These measures include the increase of the withholding tax on capital income and of the statutory corporate income tax rate. The Eurogroup looks forward to an agreement between Cyprus and the Russian Federation on a financial contribution.
The Eurogroup urges the immediate implementation of the agreement between Cyprus and Greece on the Greek branches of the Cypriot banks, which protects the stability of both the Greek and Cypriot banking systems.
The Eurogroup requests the Cypriot authorities and the Commission, in liaison with the ECB, and the IMF to finalise the MoU at staff level in early April.
The Eurogroup notes the intention of the Cypriot authorities to compensate potential individual victims of fraudulent practices, in line with established legal and judicial procedures, outside the programme.
The Eurogroup takes note of the authorities' decision to introduce administrative measures, appropriate in view of the present unique and exceptional situation of Cyprus' financial sector and to allow for a swift reopening of the banks. The Eurogroup stresses that these administrative measures will be temporary, proportionate and non-discriminatory, and subject to strict monitoring in terms of scope and duration in line with the Treaty.
Against this background, the Eurogroup reconfirms,as stated already on 16 March, that – in principle - financial assistance to Cyprus is warranted to safeguard financial stability in Cyprus and the euro area as a whole by providing financial assistance for an amount of up to EUR 10bn. The Eurogroup would welcome a contribution by the IMF to the financing of the programme. Together with the decisions taken by Cyprus, this results in a fully financed programme which will allow Cyprus’ public debt to remain on a sustainable path.
The Eurogroup expects that the ESM Board of Governors will be in a position to formally approve the proposal for a financial assistance facility agreement by the third week of April 2013 subject to the completion of national procedures.
Annex
Following the presentation by the Cyprus authorities of their policy plans, which were broadly welcomed by the Eurogroup, the following was agreed:
1. Laiki will be resolved immediately - with full contribution of equity shareholders, bond holders and uninsured depositors - based on a decision by the Central Bank of Cyprus, using the newly adopted Bank Resolution Framework.
2. Laiki will be split into a good bank and a bad bank. The bad bank will be run down over time.
3. The good bank will be folded into Bank of Cyprus (BoC), using the Bank Resolution Framework,after having heard the Boards of Directors of BoC a nd Laiki. It will take 9 bn Euros of ELA with it. Only uninsured deposits in BoC will remain frozen until recapitalisation has been effected, and may subsequently be subject to appropriate conditions.
4. The Governing Council of the ECB will provide liquidity to the BoC in line with applicable rules.
5. BoC will be recapitalised through a deposit/equity conversion of uninsured deposits with fullcontribution of equity shareholders and bond holders.
6. The conversion will be such that a capital ratio of 9 % is secured by the end of the programme.
7. All insured depositors in all banks will be full y protected in accordance with the relevant EU legislation.
8. The programme money (up to 10bn Euros) will not be used to recapitalise Laiki and Bank of Cyprus.
The Eurogroup is convinced that this solution is the best way forward for ensuring the overall viability and stability of the Cyprus financial system and it s capability to finance the Cyprus economy.
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Biggest loser, uninsured deposits in the Laika bank aka Russia...ergo everybody loses eventually. Russia doesn't take things like this meekly.
"Better solution in worse circumstances"
"These were difficult and intensive talks..."
It's difficult to talk about stealing other people's money for your own benefit?
so..... maybe the 'Collapse of Communism' was called in too early....... it was all a plot to lull the Capitalists into complacency - giving them a chance to destroy themselves
I'm naseous hearing these crooks pat each other on the back about their theft.
Can someone please open a portal in front of me so I can barf on Lagarde?
Bank of Laiki will "disappear" Lagarde? Don't you mean "be vaporized"?
legarde: oversized banking sector.
cyprus: german oversized car manufacturing sector.
tip of the hat to luxembourg finance minister....
Frederic Bastiat quotes As long as the law may be diverted from its true purpose -- that it may violate property instead of protecting it -- then everyone will want to participate in making the law, either to protect himself against plunder or to use it for plunder. Political questions will always be prejudicial, dominant, and all-absorbing. There will be fighting to gain access to the legislature as well as fighting within it.
fuck these people. i want to see them punched in the face after listening them for 10 seconds.
dont worry their health is very compromised now
Hey, you could probably make some good money in the short term being employed as one of these politicians food-testers.
At least for a while.
How many small businesses are now going to fail, further defaulting on loans, and causing new shortfalls in the banks?
Anyone going to be surprised if the Russians happen to 'find' 10 billion Euros laying around that just happen to move from EU ownership into Russian hands - for the good of the people?
General Motors approves this theft.
Litvinenko
Members of Mr Berezovsky’s family started to arrive at the manor house near Ascot, in Berkshire, as the paramedic attended to Mr Berezovsky.
On leaving the premises the paramedic's personal electronic dosimeter, which measures the air for potentially dangerous levels of radiation, was triggered.
Specialist officers were called to the scene and a two mile cordon was put in place around the property. However, no further traces of radiation were found and the cordon was lifted.
http://www.telegraph.co.uk/news/worldnews/europe/russia/9951385/Berezovs...
"I fear all we have done is to awaken a sleeping giant, and fill him with a terrible resolve" - Admiral Yamamoto in 1941 and and repeated by an unnamed Troika member on March 24th, 2013.
"In particular, they safeguard all deposits below EUR 100.000 in accordance with EU principles."
Did the ECB really just say that they stand behind all the nationally insured deposits throughout the euro zone? Really? That's an EU principle? The treaty says the opposite. And they don't have the money. Just another lie. I'll let the Germans figure it out. The first kid to drown was the dutch boy with his finger in the dike.
BLAH BLAH BLAH...
THE EU just SEIZED deposits! In effect, they just told everyone
1) If you save more than 100K Euro at once, you're punished
2) We just took the accounts at >100K, wait till you see what we do later
If there aren't full on riots tomorrow, the people deserve this.
Depositers lost their money as they should have. Everyone here just wanted the shareholders and bondholders to lose their money first and that is what has happened. It appears the letter of the law has been followed.
I'm starting to think that this may be how the original ECB deal would have worked as well. Russi screwed it up by including insured deposits in the vote. Caused the panic and thus costs the "wealthy" depositors a bunch more money. If the original deal included wiping share and bond holders then i think everyone here may have misunderstood the whole situation. Doesn't seem like the language is much different. That said if they weren't going to be wiped, then ZH may have had some influence to get the "proper" solution.
The Russian government, Putin in particular, could care less about oligarch losses in Cypriot banks. The oligarchs keep it in Cyprus to shield it from Russia. Enough with the "you'll hear from Putin soon enough" bullshit. This thinking is akin to Obama threatening Switzerland for daring to turn over confidential account information to the IRS. I assure you Putin is laughing his ass off and can't wait for the next EU tax haven to be squandered by Brussels.
Last time I checked Russian oligarchs are very well connected with the Russian government. Hard to be an oligarch nowadays without some teamwork.
Hard to be a heroine producer without the assistance of the CIA but that doesn't make it public policy.
Jeroen Dijsselbloem, when trying to make clear that deposits under 100K would not be touched, actually said: "I wish to empathize, er, emphasize, that deposits under 100K......"
For a second there I thought he might have a conscience.
Cat is out of the bag ECB and IMF THIEVES!
You have just killed the Euro, and all your hollow talk will be seen for what it is!
Rise up People of the West!
Take your money out in cash NOW!
Go to cash and precious metals!
Go buy something tangible!
Your deposits in any bank are not safe!
They might as well just take it all at this point. It doesn't matter what they do the banks will never be trusted again.
This is a win for the ``death to the worldwide economic scam crowd``... which is us.
It is if people act, but if people just go on their merry way thinking "meh it's just Cyprus" then the scam will continue. I give you Greece as my example.
Note the reference to 'imminent' new money laundering audits, plus more taxes and expecting money from the IMF (the USA).
Oh, and the politicians are to be thrown back into the lion's den: 'The Eurogroup looks forward to an agreement between Cyprus and the Russian Federation on a financial contribution.'
Howzat for crushing dissent? Fascists. Full on banksta gangsta. Take the money, and mete out more punishment for the two-faced Cypriot traitor politicians.
Not that I feel anything but contempt for the shill career political class.
Off with their heads. Do you have BODY guards?? If not, Have an eye planted behind your head. You can afford it.....
To follow : Schaeuble head on a pike.
OK, I just heard Dusselbloem say that they couldn’t agree to this solution last week because politics were in the way. Now that politics have been removed from the process they have reached an even better agreement than they did last week.
Bernanke is probably thinking to himself it’s about time you guys figured out the process, although, a few token appearances at political hearings in the future might still be good for public relations.
Are you kidding?
Bernanke wold have provided Laiki and Bank of Cyprus unlimited lending facilities at zero percent interest, as neither could have possibly had a solvency problem.
If Europeans put up with this tomorrow and go about their business as if "All is well, nothing to see here", they will deserve the rape and pillage of their assets when it is their turn. I cannot believe the people will stand for this. I know Russia won't.
"This is very much in the interest of the Cypriot people."
I threw up a bit in my mouth.
Four words you DON'T want to hear from a Russian gang member - "Show me the money"...
That's the other thing I keep hearing on here that blows my mind. Everyone on here is so smart (seriously I'm impressed) but then I hear comments on how after all accounts over 100k euros is confiscated the people will REVOLT and the banks and government office will burn. What? Where in the West would the people revolt after only savers of wealth were liquidated? Where? England? The U.S.? Spain? Where? Not Cyprus I assure you, been there many times. Great food, good weather, economically handicaped just like the rest of Europa and Ameritopia. Just like everywhere else there's TV and politics the free market and greedy rich people will be blamed and anyone who lives larger than paycheck to paycheck will be put in that category. When the accounts are liquidated it will have served them right to take advantage of the little guy. This will be their reaction same as it would be in any developed society that has let its bank take over its sovereignty.
Its called theft. Tuna man....Not ALL rich people are Greedy as you say.
I never said any rich people were greedy. That sentense refered to what most people think of savers. Read it again. Pretend I took the time to properly punctuate it.
As per the Sydney Morning Herald
I think that perhaps this is all a clever move - from a bankers and politicians perspective. What I am not clear on is this : if you have 100,001 euros in the bank, is 1 euro frozen, or all 100,001? Anyway, think of the riots now. If you are complaining that your money is being taken then you are publicly admitting that you are either rich or a Russion mobster. *Crickets* Of course, the people being robbed now are also people with the most power - so the repercussions will be.... "interesting".Switzerland, Singapore, Caymans, etc. all have enormous financial markets like Cyprus. Why is journalism serving up smokescreens for what happens when what is described as a liquidity problem is really a solvency problem. The periphery cracks first as the core circles the wagons. See Enron for timeline and methodology.
1 Euro is frozen. First 100,000 is covered for everyone.
"Rule of Law" requires respect for private property. Here, private property was plundered while banker assets (bonds) were preserved. Democratic principles were trampled.
With Cyprus' financial industry targetted for implosion, and now its #2 economic segment tourism impaired and underfunded, debt/GDP calculation is a joke. Cyprus parlaiment understands this, can this Ponzi scheme last till April Fools Day?
Laika is toast equity holders, bonholders (senior and junior), and uninsured depositors. That is by the book and fair. BoC equity and bondholders not touched and uninsured depositers get newly issued equity/bonds in xchnge for 40% haircuts. Insured Laika depositors get transferred to BoC. Hmm, who wants to bet some of that 40% haircut goes back to Laika bondholders to protect the ECB's precious collateral. Lawyers are massing at the borders.
I read this as BOC shareholders and bond holders losing all - full contribution.
5. BoC will be recapitalised through a deposit/equity conversion of uninsured deposits with fullcontribution of equity shareholders and bond holders.
How many billions are wiped out this way? It seems to exceed the 5.8billion by some factor 4 or so.
I suspect Putin was okay with oligarchs getting wiped out. he just conolidated more power. how many were dissidents anyway? it's the new totolitarian alliance -- despots and central bankers....
Link: http://www.huffingtonpost.com/2013/03/24/bank-of-cyprus-bomb-explosion_n...
"According to information from our correspondent Elena Georgiou in Limassol, two masked men broke into the main entrance of the bank and threw with Liberian container with flammable material in the branch. Their movements were recorded by closed circuit monitoring of the bank and assessed by the police."
It looks like some Cypriots have not only voted, but voted early.
Photo after bomb explosion at Bank of Cyprus: pic.twitter.com/oigilkBGQZ
... and this, ladies and gentlemen, is how the western financial system dies.
Alea iacta est. Troika crossed the Rubicon. This will not go down well with people all over Europe and with the Russians.
In my humble opinion, this 'solution' for Cyprus seems to have come about with the main aim being to reasure general depositors that the 100k guarantee will stand.
I'm convinced this is to simply buy time and avoid bank runs in other EU member states. Other countries within the EU will not be so lucky next time.
They are attempting to fool us into a false sense of security and personally I feel the risk to all deposits still stands.. get those funds out of the banks and secured elsewhere!