When Is A Euro Not A Euro

Tyler Durden's picture

With the 'temporary' capital controls being imposed in Cyprus, Credit Suisse explains why a Cypriot euro not equal to a euro from any other member country. Furthermore, the clear fabrication of a 'seven-day' period for these controls (when monthly and quarterly limits on spending are also included) is questioned as they ask how such capital controls could eventually be lifted with no obvious cure of the underlying problem, i.e., the risk of a bank run. Since every guarantee is only worth as much as its guarantor, we would expect that in absence of a European wide deposit guarantee (which for political reasons and the aforementioned template look very unlikely) these capital controls are likely to stay for longer than originally planned. Unless this vicious circle is broken, this attempt to save the euro could ironically even become the template of how a member state could leave the currency union.

Via Credit Suisse,

A euro is not a euro


...Capital controls are being imposed as part of the [Cyrpus] deal. While this is legal according to the Treaty on the Functioning of the European Union (TFEU Art. 63, 65 and 66), it creates a situation in which a Cypriot euro is not equal to a euro of any other member country from an economic perspective. In fact, while euro bank notes in Cyprus are still worth the same amount as in other countries, in a market for euro deposits, a euro in a Cypriot bank account would now most likely not be trading at par with those of other member states.


Moreover, at the moment markets are being told that these capital controls are only temporary. But we are wondering how such capital controls could eventually be lifted with no obvious cure of the underlying problem, i.e., the risk of a bank run. With the aforementioned template in place and the necessity of a second bailout looking likely as a result of the economic shock currently rippling through the country, depositors are strongly incentivised to take out their money as soon as capital controls were to be lifted. In fact, this might already be in evidence, as we hear that large Russian deposits have been moved out of the country via foreign subsidiaries of Cypriots banks, who did not seem to have been restricted by the same capital controls as domestic banks. This is likely to increase the pain for the local Cypriot population, even more so now that the local bank holiday has been extended for two more days.


Since every guarantee is only worth as much as its guarantor, we would expect that in absence of a European wide deposit guarantee (which for political reasons and the aforementioned template look very unlikely) these capital controls are likely to stay for longer than originally planned.


Unless this vicious circle is broken, this attempt to save the euro could ironically even become the template of how a member state could leave the currency union.



Drifting apart

There is another development that eventually could become a serious threat to the long-term existence of the euro. Its roots lie in the fact that the euro has always meant different things to different people. It would be too simple to reduce this to one dimension, but the role of the ECB and how it balances its priorities of price stability versus financial stability is just one example.

So while in good times the euro seemed to have managed to be all things to all people, now in economic distress, the difference in believe of what is needed to keep the currency alive are becoming a lot more visible. As a result, inner European resentment is increasing, with the core being blamed for too little help under too strict conditions and the periphery sometimes perceived to be too reluctant to change.

This is dangerous, since without the general acceptance of the strings attached to the common currency, the risk is that the euro loses its appeal to both sides.

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achmachat's picture

all € are equal, but some € are more equal than others.

hedgeless_horseman's picture



all € are equal, but some € are more equal than others.

I have some Euro coins with the Guinness Harp on them that I am willing to trade for the "equivalent" Euro coins with the Nazi Eagle. What type of premium should I expect to pay?


Abraxas's picture

Why it hasn't yet is a mistery. Because of the madness of the crowds, perhaps.

Stoploss's picture

Template, Template, Template....  It's a template, considered a template, could be a template.





This is how you know they are making this shit up as they go along..

I will let that sink in a minute.

Pool Shark's picture



"...while euro bank notes in Cyprus are still worth the same amount as in other countries..."

Only if you can get them out of the country.

[Good luck with that...]

Lets_Eat_Ben's picture

safety is still perceived as cash, bonds, stocks, even derivatives which are just wisps of paper bullshit.


I guess it takes a while for value to adjust to reality especially when the media is  force-feeding us BS.

bagehot99's picture

I would refer anybody who thinks cash under the mattress is a good 'last resort', to any random selection of Zimbabweans now sleeping under railroad bridges in Harare.

For perspective, imagine where Mugabe kept his stash - I'm prepared to bet that it wasn't in local currency, and it wasn't under any mattress anywhere in Zimbabwe.

Zurich, maybe.

Ogabe is so fucking ignorant, I'll bet he's got all his dough in FDIC insured banks here in the US.

walküre's picture

Gold will not explode unless China invades the US and declares an end to the favorite jew "confetti du siècle"

Alternatively it could explode the day that the Arabs run out of cheap oil completely.

Oil + Dollar + Jewish fractional reserve banking nirvana

Happy Fake Easter FWIW

MSimon's picture

You have found the fromt me. Who is behind the curtain?

agent default's picture

It is.  You  are looking at the wrong kind of gold.

earnyermoney's picture

they'll explode after the CB's of the world restock their valuts.

walküre's picture

Where have you been? CBs are buyers already. As long as the confetti can be printed ad infinitum and without any consequences, the price will stay manipulated. Who is auditing the Fed? There are NO checks and balances anywhere.

The paper is a tool and it's created from thin air and its value enforced at gunpoint on the rest of the world.

How can the US recover economically from the shit that almost brought the global financial system to a halt and is coming out at the other end looking better than the rest?

It's time someone somewhere declares a war on the US and the USD. Unfortunately the elite will not fight for their own lives because Americans are being told they're the good guys and need to fight for Wall Street's cause. That's how it's going down.

redpill's picture

The spot price of gold is set by bankers.

walküre's picture

Russia and China are buying physical. Not that I'm a fan of either Russians or Chinese but I can't wait for the day that those two make an attempt to bring this Jewish American shit show to its knees. Maybe then can we rebuild and be free. FYI, Putin is purging Jew-Rossi oligarchs after expelling much of the Pseude Jews from Russia to Israel over the years. Nobody is blaming his policies for the apparent genocide in slow motion. That Russian oligarch money lost in Cyprus was stolen from Russia by the Jewish oligarchs.

In Russia there's no love for Jews it seems. U$srael having a cow over Russia's political protection for Syria and Iran. Makes sense. The Bear is prepping for a non-zionist NWO and if I'm understanding the tea leaves correctly, Germany is a partner of the strategy and maybe even the Euro. Hard to say at this point if this is a setup to get us rid of the pretentious and imperialist zionist USD dictat?

glenlloyd's picture

euro faltering = dollar gaining = gold technically could lose value in us$. The fact that it's holding and gaining slightly with dollar rising is a reasonably good sign.

slightlyskeptical's picture

Why would it go up when we are seeing currency destruction?

BLOTTO's picture

Hey Gang - its me again - Blots...


The 'harp' symbol has its occult roots, just like the other occult symbology on other currencies around the world.


The harp is on Prince William's Coat of Arms.


(Harp of David)

PY-129-20's picture

Would rather have one of these


and btw the Eagle was used on German coins and state symbols before the Nazis. They just recently made the Eagle so fat.

Yeah, these orderly Nazi-Robot-Germans, cold and emotionless...


BLOTTO's picture



For consideration... i think the 'Eagles' which are used on many a national flags...German, US, Polish, Albania, Mexico, Ecuador, Eygpt, Russia, Austria, Serbia...

may actually be the mythical and occult animal the 'Phoenix'.


As symbolically shown at this years London Olympic Games...


zenmeister's picture

None, because it doesn't matter where they are minted. It only matters where they are kept...

Manipuflation's picture

Expect to pay A LOT of premium.  I have seen the linked coin for sale online for years now.  I think it was used as door stop or as a shim.  I repatriated the Euro crap I saved years ago.  It just does not hold up well over time.  I am sure that there will be a market for it someday but it's not for me.

I might eventually have to buy this coin just to show some mercy.  Not today though.  A coin can have character but then there is the "what the fuck happened here" factor.  Don't get me wrong, I want it, but not at this ridiculous price.  Stong strike...from a hammer or sickle?  Both?


Ghordius's picture

hedgeless, come on, it's not a Nazi Eagle - Germany has always used the Roman Eagle that became the symbol of the reborn "Holy Roman Empire" since the year 800, as well as the Eagle used by Austria - and the American Eagle is derived from the Roman too, as much as the name of the Capitol, etc. etc. (see here Coat_of_arms_of_Germany - Coat_of_arms_of_Austria)


after years of financial propaganda from London, constantly complaining that the EU and the eurozone are monolithic, freedom-wasting blocs some should just recognize that both are confederations, and that the member states are sovereign, and so perfectly capable of doing what Cyprus is currently doing

which is against the EU and eurozone rules - except in an emergency, which Cyprus declared as such

knowing a bit Cyprus most of those emergency limitations won't work anyway, but that is a different story

if we would use gold you know what? the situation would be the exact same one

with the only difference that it would be more clearly silly to everybody to say "an ounce of gold is not the same because the Cypriot President is enforcing financial repression"

Nussi34's picture

Roman eagle??? Give me break. As a German I would prefer to call it Nazi eagle, it sound much tougher and longlasting than some mediteranian crap!

Ghordius's picture

the Roman eagle lasted about 1000 years - it's reborn HRE version lasted from 800 to 1806 - and you should know that the version on the euro coin has a nick: "Der Pleitegeier"

notbot's picture

I'm with Dalio. Ironically, the first major country to leave may be Germany.

And I still hate Krugman.

Abraxas's picture

Now, why would they ever wanna leave? They are running the surplus because of the Euro (DM would be by now at least $15). They get to boss everyone around. They get to posture and stomp and puff and huff and everyone is trembling just like Germans want to see them.

redpill's picture

By the time anyone officially "leaves" they all will already be gone in practice.  They'll claim the EU is still intact even when it's in pieces.  Denial is all they have left.

TheGermanGuy's picture

The solution to the Euro-Crisis will be an territorial expansion of our tripple-A-rating...

Ethics Gradient's picture

Apparently Easter is cancelled for the German parliament. See the Washington Post.

Just sayin'....

toys for tits's picture

This gives a whole new meaning to the term "bank hostages"

Skateboarder's picture

All bankster assholes are assholes, but some are shittier than others.

Manthong's picture

Some PIIGS are less equal than others.

heh heh..   great minds and all that :D 

espirit's picture

Going long metal detectors in Cyprus?

Dareconomics's picture

Basically, Cypriot Euros are much less liquid than other euros.  Would you rather have €1000 in a bank account in Germany or in Cyprus?


Manthong's picture

This is a hoot..  so tell me how liquid a euro in an insolvent EEE-YOO bank is?  

Shizzmoney's picture

I just learned that German Euros are separated from French Euros, Italian Euros, etc......by using a special serial number.

German using serial numbers to separate things.......wow that sounds AWFULLY familiar!

DoChenRollingBearing's picture

Euro notes (currency) from Germany have serial numbers starting with "X".

ParkAveFlasher's picture

So, we have a "quick and painless" conversion out of the Euro in terms of technical "execution", because the conversions are "baked in" via serial tracking of Euro notes and coins.  I.E. "We had xyz Marks in circulation which were replaced by xyz Euros of serial number X."  The implication here is a parallel tracking of "what a Euro of serial number x would be if it were a lira, or dmark, or ffranc, or kroner, or what have you".  The fx is thus already in place and can be pre-figured with some accuracy. 

If a country veers towards leaving or makes indications that they may leave the Euro, all Euro notes and coins of their given serial number (of the originally replaced currency) can be filtered out from the banking system (via a bank holiday in which banks actually, literally, remove the notes and coins of serial number X like children picking pennies from a can of spare change) so that the remaining Euros in circulation are not suddenly joined by their exiled Euro brethren from no-longer-member-nations.

The Euro cats are NOT dumb as it's being seen by most.  They are quite intelligent.


Z''s picture

Unfortunately I have no link, cannot remember where I read this.  But I do recall reading during the Greek turmoil a few years ago that people had begun to hoard the German Euros, foreseeing exactly what you describe.  The idea was that if there was a Euro breakup, the currency would be valued according to where it was minted.  Those holding the Euros of Germany were presumed to be sitting pretty.

smacker's picture

Euro coins don't have special markings or ID codes like paper notes.

They have something different: the B side contains a national portrait or whatever of the EZ member state, which of course makes them easily identifiable.

Pseudo Anonym's picture

dont forget the serialization is only for euro notes; not the 1's and 0's digital euro currency - which is the majority of the euro supply

ParkAveFlasher's picture

Digital accounts are even easier to tabulate.  They don't even have to be actually there.

Rustysilver's picture

Does IBM still uses punch cards.

ziggy59's picture

I believe many coins and paper Euros have country of origin, and serial numbers to designate such, no? Similar to our coins and bills, depends what mint/state, city they come from