Proving that in Europe the logic behind the saying that "the beatings will continue until moral improves" is alive and well, was the announcement by the Cyprus central bank head Panicos that capital controls in the country will remain in place until confidence returns. We'll let that sink in for a minute.
From AP:
Panicos Demetriades said the Central Bank wants to eliminate these controls as soon as possible, but it has to first make sure that trust in the banks has recovered sufficiently. He said a rush of withdrawals would put additional strain on the banks that they can hardly afford right now.
"We have to keep in mind the dangers of easing (restrictions) overly quickly," Demetriades told a press conference. "We have to be careful with these relaxations. It's more important to see how trust can be restored in the banking system."
The Central Bank had always refused to estimate how long the controls would last, though government officials have said they would last several weeks. Some of the controls, such as bank money transfers, have been eased to help local companies do business. But many others — such as the daily withdrawal limit — remain in place.
One wonders just how capital controls remaining in place - a sign that the government itself has zero confidence in the people and the banks - makes any sense especially considering that French FinMin as recently as a month ago told "To all those who say that we are strangling an entire people ... Cyprus is a casino economy that was on the brink of bankruptcy."
So, casino economy on the bring of bankruptcy, with an insolvent banking sector, yet where confidence is expected to return on its own eventually. Sounds like your typical European "plan" of attack.
In other words, a perfectly circular #Ref!