Eurozone will collapse...
23-03-2013, 19:52
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#1201
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cf.mega poser
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Re: Eurozone will collapse...
Quote:
Originally Posted by Sirius
So Germany does not get any of the interest that will be charged on the loan. ?
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I suspect the loan will not be paid off. Not completely anyway. Just like the Greek loan...
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23-03-2013, 19:52
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#1202
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Re: Eurozone will collapse...
Quote:
Originally Posted by danielf
Hmm, fair point on the cash. However, the point of the levy (as I understand it) was to stop the deficit exceeding 100% of GDP. With a full bailout it would have topped 140%. I'm not sure if Europe insisted on the levy per se. Europe did require Cyprus to find 5 billion Euros.
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Quote:
Originally Posted by Damien
I am pretty sure they need the bailout to save the two banks. The banks are certainly not awash with money and are only still going because they've been getting "emergency liquidity", i.e cash for day to day operations, from the European Central Bank.
They were liable for a lot of Russian money. The Eurozone didn't want to be seen to be bailout out rich Russians so said that some of the bailout, which would have amounted to more than the entire GDP of Cyprus, would have to come from Cyprus itself. However if the bailout is being used to save the banks then you could just as easily they say that the EU is only bailing them out to a point. That point as been changed to protect those savings under €100,000 and 80% of those over €100,000.
---------- Post added at 19:37 ---------- Previous post was at 19:36 ----------
The thing is, if the bailout didn't happen and the ECB stopped the emergency liquidity then the banks would have collapsed and people under €100,000 would have been refunded but everything over €100,000 would have been lost.
So again. What was the alternative?
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Seems that you are both correct .After reading a few articles it is clear that the Cypriot banks have been in big trouble for a while ,allowing assets such as Greek debt to rise to more than 7 times the Cypriot GDP which of course meant that Cyprus could not afford to nationalise the banks as we did .This situation does beg the question of why did no one in the EU see this coming and why was it allowed to continue or why was it just brushed under the carpet .
As to the question of alternative action ,i think on reflection that there is none anymore ,however had the problem been addressed earlier by the EU and Cypriot government then this levy would not have been needed
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23-03-2013, 19:54
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#1203
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Remoaner
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Re: Eurozone will collapse...
Quote:
Originally Posted by Sirius
So Germany does not get any of the interest that will be charged on the loan. ?
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Only on the bailout, the whole point of getting Cyprus to stump up some of the cash is to reduce the level of debt Cyprus has to take on. If Germany's motivation was interest on the bailout there would be no levy because Germany would stump up 100% of the bailout. I don't think Germany expect to see the money back anyway. They're only doing it to reduce damage to the Eurozone.
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23-03-2013, 20:00
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#1204
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Re: Eurozone will collapse...
Quote:
Originally Posted by Damien
Germany isn't getting any of the levy money, the levy money is still going to Cyprus.
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I still don't understand how a levy can be placed on accounts held in banks with no money .
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23-03-2013, 20:04
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#1205
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Remoaner
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Re: Eurozone will collapse...
Quote:
Originally Posted by martyh
I still don't understand how a levy can be placed on accounts held in banks with no money .
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Well I presume it basically reduces the amount needed to bailout the banks, i.e it's more of a write-off. I don't understand it either tbh. That's the only way I think it can work in practise however.
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23-03-2013, 20:12
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#1206
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Re: Eurozone will collapse...
Quote:
Originally Posted by Damien
Well I presume it basically reduces the amount needed to bailout the banks, i.e it's more of a write-off. I don't understand it either tbh. That's the only way I think it can work in practise however.
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The only way my head can get round it is to liken it to getting a bank loan for a car and paying the first repayment using money from the original loan
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23-03-2013, 20:19
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#1207
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Remoaner
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Re: Eurozone will collapse...
Quote:
Originally Posted by martyh
The only way my head can get round it is to liken it to getting a bank loan for a car and paying the first repayment using money from the original loan
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Nah cos this isn't considered part of the loan. It's more like having to have a deposit in the first place. I suspect it's just a mechanism by which to write down the money, they've 'taxed it'.
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23-03-2013, 21:59
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#1208
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Trollsplatter
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Re: Eurozone will collapse...
Quote:
Originally Posted by Damien
It's only over €100,000 Euros this isn't it? Thus avoiding breaking the ECB's deposit protection. It was either that or people lose their entire savings as the banks collapse.
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My understanding is that the Cypriot parliament has also approved a 1% levy on everyone else, which as it is so much smaller than what was previously mooted, everyone seems to either be ignoring entirely, or else accepting with relief as it could have been far worse.
This is of course standard operating procedure for the EU. Its will is democratically refused, so it invites the voters to think again and produce the 'right' result second time out. In the background it makes cosmetic changes to its proposals designed to make it look as if they have backed off, when they haven't. (cf. dropping the constitution and reintroducing it as the "Treaty of Lisbon, thereby circumventing both the French and Dutch electorates).
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23-03-2013, 22:15
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#1209
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Grumpy Fecker
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Re: Eurozone will collapse...
Quote:
Originally Posted by Chris
My understanding is that the Cypriot parliament has also approved a 1% levy on everyone else, which as it is so much smaller than what was previously mooted, everyone seems to either be ignoring entirely, or else accepting with relief as it could have been far worse.
This is of course standard operating procedure for the EU. Its will is democratically refused, so it invites the voters to think again and produce the 'right' result second time out. In the background it makes cosmetic changes to its proposals designed to make it look as if they have backed off, when they haven't. (cf. dropping the constitution and reintroducing it as the "Treaty of Lisbon, thereby circumventing both the French and Dutch electorates).
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If its one thing the last few days has taught me about the EU and its bullying tactics is that they are not to be trusted now or in the future anywhere near our bank accounts.
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23-03-2013, 22:16
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#1210
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cf.mega poser
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Re: Eurozone will collapse...
Quote:
Originally Posted by Chris
My understanding is that the Cypriot parliament has also approved a 1% levy on everyone else, which as it is so much smaller than what was previously mooted, everyone seems to either be ignoring entirely, or else accepting with relief as it could have been far worse.
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Do you have a link or anything else to back up your understanding, or are we taking your word for it?
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23-03-2013, 22:22
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#1211
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Trollsplatter
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Re: Eurozone will collapse...
Quote:
Originally Posted by danielf
Do you have a link or anything else to back up your understanding, or are we taking your word for it?
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Quote:
Late on Friday night, the Cypriot parliament also backed a revenue-raising levy of less than 1 per cent on bank deposits below €100,000 — a rate seen as fairer than the 6.75 per cent levy rejected by legislators last Tuesday.
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http://www.telegraph.co.uk/news/worl...ig-savers.html
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23-03-2013, 22:32
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#1212
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Remoaner
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Re: Eurozone will collapse...
Quote:
Originally Posted by Chris
My understanding is that the Cypriot parliament has also approved a 1% levy on everyone else, which as it is so much smaller than what was previously mooted, everyone seems to either be ignoring entirely, or else accepting with relief as it could have been far worse.
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I missed the 1% levy, although to be fair the news was just breaking. Reading news stories at the moment however suggest that this 1% has been talked about but no clear indication if that would be part of the policy. This would be a mistake as it breaks the idea of your savings being safe and could led to future bank runs.
Quote:
This is of course standard operating procedure for the EU. Its will is democratically refused, so it invites the voters to think again and produce the 'right' result second time out. In the background it makes cosmetic changes to its proposals designed to make it look as if they have backed off, when they haven't.
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Cyprus don't want them to back off because they want the bailout money. Cyprus did not tell the EU to back-off but that these terms were unacceptable and they're trying to find a new way to raise the money. The EU backing off would mean the collapse of their banks.
The 1% isn't in the current set of stories:
http://news.sky.com/story/1068912/cy...-bank-deposits
http://www.ft.com/cms/s/0/6910b762-9...#axzz2OOQ6hqTN
We'll have to wait and see what happens when the actual bill is produced.
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24-03-2013, 18:55
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#1213
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Inactive
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Re: Eurozone will collapse...
Quote:
Originally Posted by danielf
I suspect the loan will not be paid off. Not completely anyway. Just like the Greek loan...
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What you mean like a sort of national student loan?
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24-03-2013, 18:57
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#1214
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cf.mega poser
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Re: Eurozone will collapse...
Quote:
Originally Posted by Osem
What you mean like a sort of national student loan?
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One can only hope
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24-03-2013, 19:08
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#1215
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Grumpy Fecker
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Re: Eurozone will collapse...
The Cypriot Mp's are in Brussels tonight being measured up for there lederhosen
http://news.sky.com/story/1069157/cy...ives-for-talks
Quote:
Cypriot President Nicos Anastasiades has arrived in Brussels for last-minute talks aimed at saving the country's economy.
He is due to speak with political and financial leaders ahead of a crunch meeting of eurozone finance ministers.
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Poor Cyprus they are about to sign there souls to the Devil
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