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Cyprus Bailout Size Increases By 35% In One Month To €23 Billion, 120% Of GDP

Tyler Durden's picture


As was reported in the previously presented Cypriot Debt Sustainability Analysis, which among other things had this stunner inside of it, things in Cyprus have gone from bad to worse in the brief span of a month. 35% worse to be exact, because this is how much the total bailout of Cyprus has grown by in a few shorts weeks, from €17 to €23 billion, which happened because just as we predicted the stealth outflow from banks was much worse (read bigger) than previously reported, leaving banks with a far bigger hole to plug. This is problematic because at least previously the bailout as a percentage of GDP was in the double digits. No longer so, as the latest (and soon to be re-revised higher) bailout figure now stands at over 120% of the country's €18.8 billion GDP (which itself is about to tumble following the collapse of the economy).

From the Guardian:

Crisis-hit Cyprus will be forced to find an extra €6bn (£5.1bn) to contribute to its own bailout under leaked updated plans for the rescue.


In total, the bill for the bailout has risen to €23bn, from an original estimate of €17bn, less than a month after the deal was agreed – and the entire extra cost will be imposed on Nicosia.


Cyprus's politicians had already faced intense domestic political pressure for agreeing to impose hefty losses on savers at two struggling banks in order to fulfil its eurozone partners' demands of contributing €7bn.


But after a more detailed "debt sustainability analysis" showed that the black hole in the island nation's finances is far deeper than first thought, the total bill for Cypriot taxpayers and depositors has now been set at €13bn. The €23bn overall bill is larger than the size of the Cypriot economy.


The document, leaked on Wednesday night, underlines the botched nature of the initial bailout agreement, which was hurriedly cobbled together in March and had to be redrawn after Europe's finance ministers rejected the idea that depositors holding less than €100,000 – whose savings are meant to be insured – would face deep losses.


Under the new plan, which is likely to spark fresh public outrage, Cyprus will be forced to sell €400m-worth of gold reserves, renegotiate the terms of a loan with Russia and "bail-in" creditors of the Bank of Cyprus, to claw back some of the cost of the rescue.

Furthermore, as we also forecast, Cyprus will soon be forced to engage in some form of Greek-like PSA, or other "consensual" exchange offer, with the details still murky, but the outcome clear: convert yet another debt instrument into a "perpetual PIK" never to pay interest or be repaid again.

There was also a suggestion that holders of €1bn-worth of Cypriot government bonds could be urged to agree to a debt swap, reducing the country's repayments. That could signal a messy period of negotiation and uncertainty.

Finally, the DSA had the following clause, which was also previously reporterd:

Sale of excess gold reserves: The Cypriot authorities have committed to sell the excess amount of gold reserves owned by the Republic. This is estimated to generate one-off revenues to the state of EUR 0.4 bn via an extraordinary pay-out of central bank profits

Yet somehow this happened without the actual "Cypriot authorities" knowledge, because the entire morning has been spent by them denying they had any idea this has happened. Alas, when one has ceded all sovereignty to the Troika, the word "authority" has a far looser meaning.


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Thu, 04/11/2013 - 08:19 | 3435678 SeverinSlade
SeverinSlade's picture

The European Commission demands MOAR gold.

Thu, 04/11/2013 - 08:22 | 3435680 JPM Hater001
JPM Hater001's picture

"The Rothchilds demand MOAR gold."

There - fixed.

Thu, 04/11/2013 - 08:26 | 3435690 GetZeeGold
GetZeeGold's picture



They entertained the offer from the Rothchilds......then they said screw'em.

Thu, 04/11/2013 - 08:32 | 3435714 Abraxas
Abraxas's picture

I wish Stephen Leeb, John Embry, James Turk and Jim Sinclair would stop calling the bottom in gold and silver and resumption of the bull just around the corner. Don't get me wrong, I believe in PMs more than ever and I am patiently waiting, but these continuous calls for the new highs just in front of us are not helping at all, because they look just like MSM talking up the equities. What I'm saying is that they should stick to the fundamentals and leave the psychic stuff to the clowns in the MSM.

Thu, 04/11/2013 - 08:45 | 3435750 GetZeeGold
GetZeeGold's picture



I am patiently waiting


So is a buddy of mine from ten years ago. I love him like a brother...but that guy never gets off his ass and actually does anything.

Thu, 04/11/2013 - 08:56 | 3435803 Peter Pan
Peter Pan's picture

People need to watch the stock market and ask themselves, "can this really be happening?"

The answer is "no".

The same applies to the downward price of gold.

There is a disconnect between fundamentals and reality on the one hand and manipulation and delusion on the other.

The situation is resolved simply by the passage of time which tends to weed out imbalances by letting them collapse by the sheer weight of their mathematical foolishness.

Thu, 04/11/2013 - 09:25 | 3435907 eclectic syncretist
eclectic syncretist's picture

Those guys make their money selling you the idea that gold and silver are going higher, much more so than any investments in the PM's themselves, so you should ignore them.  They are like car salemen and realtors who never say anything but "it's a great time to buy".

Regardless of the apparent bull market in equities, volume on up and down days suggest distribution is already occurring.  Look at the market tops in 2000 and 2007.  Both took several months of distribution before a downtrend started.  You are definitely right to be patient.  So few people have this important skill anymore.

The Fed can print and, at least hypothetically, adjust the market to be anything they want, but they can't make jobs.  I mean jobs as in true economic prosperity going-forward capitalistic democratic society type jobs.  The Fed exists only to print money for the government and to skim a hefty portion of it for the banks, and nothing else.  Oh, I almost forgot, the Feds money creation and transfer activities are paid for by the taxpayers and are an immediate drain upon the economy, so what the Fed is doing now is only going to exacerbate/accelerate the economic problems we already have.

Thu, 04/11/2013 - 09:36 | 3435930 GetZeeGold
GetZeeGold's picture



Yeah......but it's a faith based system.


You can only sell hot air for so long.

Thu, 04/11/2013 - 08:51 | 3435781 new game
new game's picture

but gold isn't money - hey buffon accross the pond - someone is calling ya out to da street.

i ask the great bafoon and shalom; is gold money?

Thu, 04/11/2013 - 09:05 | 3435828 Anasteus
Anasteus's picture

Cypriots gave 10 tons of gold to Europe (to the Rothschilds) and their debt immediately mounted up.

A good stroke of business!

Thu, 04/11/2013 - 08:32 | 3435713 Sudden Debt
Sudden Debt's picture

It's just a repeat of the Greek Scenario where they will finally end up demanding 10 times more than the original amount.

Nothing will go to the country, everything to the banks


something to think about when their people are looking for food in the trashcans...

Thu, 04/11/2013 - 08:40 | 3435741 Global Hunter
Global Hunter's picture

after they save the Cypriotic banks they can incorporate  the Sudden Debt phrase "last one with a job is a queer" into their daily lives.

Thu, 04/11/2013 - 09:16 | 3435871 Bangin7GramRocks
Bangin7GramRocks's picture

Next month when the bailout becomes more then the entire country is worth, do they send in Tommy D and Henry to bust out the joint?

Thu, 04/11/2013 - 08:22 | 3435679 Edward Fiatski
Edward Fiatski's picture

Hey... I heard this story before! Prepare for the Summer of Fun!

Thu, 04/11/2013 - 08:28 | 3435702 EscapeKey
EscapeKey's picture

I'm pretty sure they have a templated version of that document, and only the country name and numbers change.

Fri, 04/12/2013 - 03:20 | 3439819 Urban Redneck
Urban Redneck's picture

And if they had a sense of humor- it would be stamped PLAN B


Thu, 04/11/2013 - 08:31 | 3435716 Handful of Dust
Handful of Dust's picture

Edward, it's another summer of the 'jobless recovery.'

Thu, 04/11/2013 - 08:38 | 3435727 Edward Fiatski
Edward Fiatski's picture

One of these Summers will see the jobless peasants shipped off to some Great War, just as had been done in the past.

Marshall Plan

Doubling of GDP for Everyone!*

*after your country gets decimated by thermonuclear warheads

Thu, 04/11/2013 - 08:22 | 3435683 j0nx
j0nx's picture

Those impotent peons deserve what they get at this point. They should have exercised the rope and lamp post solution instead of whining a little and slinking into the night like little bitches. Give a bully your lunch money once and he will be back day after day until you knock him the fuck out.

Thu, 04/11/2013 - 08:26 | 3435698 JPM Hater001
JPM Hater001's picture

I would agree with you 100% if these weren't the things that lead to war.

Thu, 04/11/2013 - 08:57 | 3435799 JOYFUL
JOYFUL's picture

Right now, over the eastern Mediterranean, we've enjoyed two consecutive days of nordic, clean air, nary a cloud in the night.

During the day you can watch the planes move in parallel lines over the western sky, belching the noxious clouds of chemtrailed toxins which have failed to form in the usual all encompassing fashion, due to the healthy blow from north...but soon nuff, the wind will shift, and the sun be all but blocked out a miasma of mood altering chemical control. Cypriot control. We all "Cypriots" now.

"impotent peons".....

man, you have no idea just how fucked you puta ni idea. You, cabroncito, unlike most of my brethern in the fallen lands, deserve exactly what's blowin yur way.

Thu, 04/11/2013 - 09:21 | 3435885 j0nx
j0nx's picture

Your meds. Take them now.

Thu, 04/11/2013 - 10:40 | 3436217 JOYFUL
JOYFUL's picture

Actually Chthonic One, the Med is my meds...or was until the clouds started rollin this way too...

don't need no meds no more...just bein free of poseur tuff guy folk like yu does wonders for the spirit. Please stay wherever you are and await your I was sayin, you deserves it mightily!

Thu, 04/11/2013 - 08:22 | 3435686 malikai
malikai's picture

Why not? Of course they're good for it.

Everyone loves being robbed and enslaved at the same time.

Thu, 04/11/2013 - 08:26 | 3435699 EscapeKey
EscapeKey's picture


No-one was being robbed. You see, they all got shares in the banks when they willingly (and totally voluntarily) handed over a percentage of their deposits.

And shares in banks are as good as gold.

Thu, 04/11/2013 - 08:34 | 3435721 pods
pods's picture

"But what if he shot me in the face?"

"That was a risk we were willing to take."


Thu, 04/11/2013 - 08:43 | 3435746 malikai
malikai's picture

I wonder if people miss the mob yet..

Thu, 04/11/2013 - 08:23 | 3435687 fonzannoon
fonzannoon's picture

Are there still capital controls on insured deposits there? Are they still living off an atm withdrawal a day?

Thu, 04/11/2013 - 08:40 | 3435739 Navymugsy
Navymugsy's picture

Yes. ATM withdrawls and charity soup.

Thu, 04/11/2013 - 08:24 | 3435691 JPM Hater001
JPM Hater001's picture

I smell an exit.

Thu, 04/11/2013 - 08:25 | 3435692 I am more equal...
I am more equal than others's picture

If you are merely printing the fiat to complete the bail out who cares what the amount is? Why not a trillion to the trillionth power; its only paper or electronic zeros and ones made up by fairly tale believing money elves. 

Thu, 04/11/2013 - 08:28 | 3435701 GetZeeGold
GetZeeGold's picture



......who cares what the amount is?


I'm not sure anyone even knows at this point.

Thu, 04/11/2013 - 08:26 | 3435693 EscapeKey
EscapeKey's picture

At this rate of expansion, it will take the global GDP to bail out Cyprus by the end of the year.

Thu, 04/11/2013 - 08:26 | 3435695 HD
HD's picture

Excess gold? How the hell can you have excess gold?

Thu, 04/11/2013 - 08:28 | 3435704 JPM Hater001
JPM Hater001's picture

Are you broke AND holding gold?

That's excess.

Detach - Debase - Defy.

Only chance.

Thu, 04/11/2013 - 08:32 | 3435717 new game
new game's picture

HD- plus 100 = 101

at least as much as can be sewn in and not restrict movement...

Thu, 04/11/2013 - 08:34 | 3435720 Sudden Debt
Sudden Debt's picture

well... every man has EXCESS DICK... untill they want to do pooky pooky... than you need every inch you have...

Thu, 04/11/2013 - 08:27 | 3435697 new game
new game's picture

somebody has to refuse to go to the back of the buss!

Thu, 04/11/2013 - 08:27 | 3435703 booboo
booboo's picture

It was always going to be more, bailouts are like remodeling estimates. Labor, material, overhead, profit............... then double it.

Thu, 04/11/2013 - 08:30 | 3435707 SWRichmond
SWRichmond's picture

The number should be no surprise; recall, Barofsky estimated that the fed had spent, lent, or guaranteed some $24 Trillion at the height of the 2007/2008 "crisis" in the US.  Compare that number to US GDP.

Thu, 04/11/2013 - 08:29 | 3435708 pods
pods's picture

Time for Cypriots to realize that their gold is worth more than their banks.

When that happens, shit starts burning.


Thu, 04/11/2013 - 08:36 | 3435730 Sudden Debt
Sudden Debt's picture

that's for their grandchildren to figure out.

For now, they are all still to dumbed down like 99% of the entire world population.

Thu, 04/11/2013 - 08:43 | 3435754 Temporalist
Temporalist's picture

Not certain but it seems to me that many Cypriots are retirees/expats and their children or grandchildren live in other countries. 

Cyprus is like Ibiza with crooked banks instead of nightclubs and ecstasy.

Thu, 04/11/2013 - 08:30 | 3435709 firstdivision
firstdivision's picture

Damn, I was off by 2B.  I guessed by now they would need 25B.  I guess over the weekend it'll hit 25B.  In reality they are going to need ~37B with the lack of internal capital to raid, especially due to local politicians and bankers that moved their funds out of the country prior to the seizure.

Thu, 04/11/2013 - 08:35 | 3435726 GetZeeGold
GetZeeGold's picture



The real numbers aren't in yet. I'd wait for the revisions.

Thu, 04/11/2013 - 08:30 | 3435710 jubber
jubber's picture

defaults on derivatives with Laiki bank ?

Thu, 04/11/2013 - 08:34 | 3435725 Sudden Debt
Sudden Debt's picture

Again, the Greek Scenario all over again.

They'll just change the rules and don't call it a event so nothing is triggered.


Thu, 04/11/2013 - 08:36 | 3435733 EscapeKey
EscapeKey's picture

Laiki Bank collapsing is not a credit event.

Thu, 04/11/2013 - 08:32 | 3435718 Winston Churchill
Winston Churchill's picture

149 % haircut .

Spiderman towels are expensive.

Thu, 04/11/2013 - 08:34 | 3435722 the not so migh...
the not so mighty maximiza's picture

Exponential growth, but not in a good way....bitchez

Thu, 04/11/2013 - 08:34 | 3435724 Navymugsy
Navymugsy's picture

Oooppss! My bad. I took 1,000 euros out of my Hellenic Bank account.

Thu, 04/11/2013 - 08:37 | 3435732 NoWayJose
NoWayJose's picture

What the EU and IMF never seem to understand is that the path to economic revovery is a two part play. They have Act 1 down, which is austerity. What they do not have is Act 2, which is getting rid of your debt by either default, or restructuring. Act 2 is the foundation of bankruptcy court in the United States. If someone is deep in debt they can't recover if they walk out of court still owing 120% of their salary. Only Iceland got to star in act 2. Rather than taking the 'loan' from the ECB, Cyprus should have defaulted and instead let the ECB give their electronic money to the Cypriot bondholders - mainly EU banks.

Thu, 04/11/2013 - 08:40 | 3435742 Temporalist
Temporalist's picture

You are missing two important points. 

1)The IMF and EU are run by banksters/kleptocracts (Goldman Sucks alum) that don't care about people, countries, sovereignty, depositors

2) The government of Cyrpus is now the troika and they also don't give a shit about anything but paying their own oligarchs instead of someone else's


Point 3 would be "When it gets serious you have to lie" but if people are stupid enough to not know these people are pathological lying sociopaths they might as well put their heads back in the sand

Thu, 04/11/2013 - 08:37 | 3435734 new game
new game's picture

like cog dis said so eloquently "crumble"

and i add, til it is gone, all of it, a waste land, no money to import the basics.

the island is like a sinking ship-smart money long gone...

Thu, 04/11/2013 - 08:43 | 3435747 Downtoolong
Downtoolong's picture

How long before one of these bail ins equals 120% or your deposit?

"Shut up peons and just keep working until we're solvent again"  

Thu, 04/11/2013 - 08:43 | 3435748 Seasmoke
Seasmoke's picture

Imagine what it would be , if people could withdraw their money all at once instead of 100 a day

Thu, 04/11/2013 - 08:44 | 3435755 SheepDog-One
SheepDog-One's picture

No matter WHAT you see just remember there's nothing to see here! Just move along and buy stawks! The Central Monetizer commands it!

Thu, 04/11/2013 - 08:44 | 3435756 BandGap
BandGap's picture

Debt swap????? Doesn't Greece own a shitload of Cypriot bonds? Oh, this should go well. Like herpes.

Thu, 04/11/2013 - 08:53 | 3435792 andyupnorth
andyupnorth's picture

Why should the people suffer for the mistakes made by bankers?

Thu, 04/11/2013 - 08:57 | 3435807 Edward Fiatski
Edward Fiatski's picture

Good rhetorical question.

Thu, 04/11/2013 - 09:07 | 3435841 Fix-ItSilly
Fix-ItSilly's picture

Troika should merge Cyprus with Greece. Spinout a few islands with deepwater ports to Russia along with some offshore energy leases. Merge the banking interests of Greece/Cyprus with some German Landesbanken and transit Greek/Cypriot pensioners to live in subsidized housing in East Germany.

Oh...  and sell the rest of the gold to Kyle Bass

Thu, 04/11/2013 - 09:15 | 3435870 Sudden Debt
Sudden Debt's picture

35% more... same as greece back than... and than that also doubled and so on.

I think it's pretty safe to assume that EVERY EUROPEAN COUNTRY'S DEBT IS AT LEAST 35 TO 70% BIGGER THAN THEY SAY!!

without liability's that is...

Thu, 04/11/2013 - 09:34 | 3435935 Sid James
Sid James's picture

So, using the Greek template, the real figure is €92 billion.

Thu, 04/11/2013 - 10:23 | 3436130 OldE_Ant
OldE_Ant's picture

lol.  35% growth in less than a month.    Yeah that is sustainable.

Throw some more printed money at them.  Everything will be perfectly fine for the next month.

Can't wait until the next round of austerity wipes out people with over 20,000 euros and capital controls means one needs special permission to get 50 euro/day out of their accounts.    Additionally the government will mandate all employed people MUST have their checks direct depositied into the banks.

Move along sheep - there are no shears - there is no problem.  That rumbling noise in your gut is only the sound of drones flying by.

Total complete systemic collapse will never happen as long as we have 3-D printers.

Thu, 04/11/2013 - 10:34 | 3436131 steve from virginia
steve from virginia's picture



These countries -- Greece, Portugal, Spain, Ireland, Latvia, Slovenia, Cyprus ... France, Netherlands, Japan ... China ... are broke.


Maybe not China right this minute. Not quite Germany right now either. But soon and forever. Ummm ... USA ...


These broke countries are still at the teller window with their worthless 'collateral' borrowing to buy petroleum so they might still 'enjoy' the worthless trappings and empty symbols of modernity. Trappings that push them deeper into catastrophic ruin.


It's a one-way trip, folks. There is never going to be any recovery. There simply aren't the resources for it. The 'technology' everyone is counting on to save us is stealing pensions from the elderly. After these are stolen, what next?


Every single day of empty trappings brings the populations a day closer to starvation and violent revolution, to the outcome of lost wars and inevitable collapse ... living in caves, indeed.  That is a very high price to pay ... for self-delusions.



Sat, 04/13/2013 - 04:09 | 3444184 Mark Urbo
Mark Urbo's picture

You're way too hung up on the peak petro thing... the late 50's and early 60's it was food production. Those were equally bad assumptions.

Thu, 04/11/2013 - 10:44 | 3436251 NEOSERF
NEOSERF's picture

Doesn't even have to be stealth outflows at this point.  Anyone with $500 should be an is taking out the limit each week but more importantly, IS NOT PUTTING A DIME IN...this will croak the banks before July.

Thu, 04/11/2013 - 11:41 | 3436644 Mototard at Large
Mototard at Large's picture

Six billion Euros of additional funding works out to 7,160 Euros for each of the 838,000 citizens who live in the Nicosia controlled part of Cyprus.

23 billion Euros in total works out to 27, 446 Euros for the same population.

Given that about 70% of that population is in the adult range, that works out to 586,000 potential earners/taxpayers. But Cyprus has a workforce participation rate of about 64%, so there is really only 375,000 people working in the government controlled area of Cyprus.

So that means that the 375,000 people would each have to pay about 61,000 Euros to clear this debt (assuming no interest payments). I do not have a PhD in economics from the Oxbridge schools or the Ivy League, but I believe this debt will never be paid.

Thu, 04/11/2013 - 11:56 | 3436718 pashley1411
pashley1411's picture

I'm personally in favor of a bailout of my personal indebteness in excess of 100% of my GNP.

Jesus, we could put this stuff in a time capsule and put it away for a couple thousand years.    Our great grandkids simply aren't going to believe this stuff.  

Thu, 04/11/2013 - 12:29 | 3436918 ILikeBoats
ILikeBoats's picture

Calling Mr. Otis ... just like the used car salesman, now that the hook is set, have to figure out how to fleece Cyprus some more, make a few extra percent on the loan, charge extra for floor mats, etc.

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