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The Cyprus Bailout Should Be a Warning to EU Citizens

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lotuspuppy
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19 Mar 2013, 2:39 pm

Well, apparently the Cypriot parliament voted to reject the bailout. I can see why, but this bailout had them chose between two bad options. Unless they can find an acceptable package soon, it seems likely that one or both of the major Cypriot banks will collapse. I have a suspicion it may happen shortly, though, as ordinary Cypriots realize their deposits are not safe.



Jacoby
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22 Mar 2013, 4:25 am

Quote:
As Europe wakes up to what could be a tumultuous day, Handelsblatt reports that the ECB has decided that, due to the "great danger" of a bank run once they reopen next week, it will enforce capital controls independently of Cypriot (elected) officials. With perhaps a nod towards negotiating some ELA funding for Cypriot banks next week (if the government accepts this ECB-enforced 'program'), the rather stunning restrictions on people's private property include:

Freezing Savings - no time-frame (it's not your money anymore)
Make bank transfers dependent on Central Bank approval (a money tzar?)
Lower ATM withdrawal limits (spend it how we say?)

The capital controls will be designed "so that citizens have access to sufficient cash to go about their lives." So, there it is, a European Union imposed decision on just how much money each Cypriot can spend per day. Wasn't it just last week, we were told Europe is fixed?


coming soon to a country near you



auntblabby
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22 Mar 2013, 4:27 am

what can make the bulk of cypriot owners of money, continue to keep the bulk of their money in cypriot banks?



Jacoby
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22 Mar 2013, 5:00 am

auntblabby wrote:
what can make the bulk of cypriot owners of money, continue to keep the bulk of their money in cypriot banks?


Nothing short of capital controls like these, the Cypriot economy which is almost entirely dependent on it's banking industry has been destroyed. Sieg heil mein Fuhrer Merkel!



Tequila
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22 Mar 2013, 7:30 am

Jesus fecking Christ. They're even more fascistic than I thought.



lotuspuppy
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22 Mar 2013, 10:11 am

Tequila wrote:
Jesus fecking Christ. They're even more fascistic than I thought.


I sometimes wonder if the present crisis points to a darker future for the Continent.



Tequila
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22 Mar 2013, 10:20 am

lotuspuppy wrote:
Tequila wrote:
Jesus fecking Christ. They're even more fascistic than I thought.


I sometimes wonder if the present crisis points to a darker future for the Continent.


If we don't break the EU up, that's where we're headed.

As the famous Soviet dissident who spent years in forced labour camps and psychiatric prisons in the 1960s and 1970s (and, now, UKIP patron), Vladimir Bukovsky, says: "I have lived in your future and it didn't work."

[youtube]http://www.youtube.com/watch?v=bM2Ql3wOGcU[/youtube]



lotuspuppy
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22 Mar 2013, 11:33 am

Tequila wrote:
lotuspuppy wrote:
Tequila wrote:
Jesus fecking Christ. They're even more fascistic than I thought.


I sometimes wonder if the present crisis points to a darker future for the Continent.


If we don't break the EU up, that's where we're headed.

As the famous Soviet dissident who spent years in forced labour camps and psychiatric prisons in the 1960s and 1970s (and, now, UKIP patron), Vladimir Bukovsky, says: "I have lived in your future and it didn't work."

Right, but I fear an EU breakup (or more specifically, a Euro breakup) will also cause misery. Take tiny Cyprus, which may very well be booted from the Euro. If it is, the new Cyprus currency will likely plummet, and cause uninmaginable hyperinflation. The same pattern may repeat elsewhere in Southern Europe. In Northern Europe, going back to the mark, guilder and other currencies may usher in Japanese style deflation for that part of the world.