TGE – Cyprus Rejects EU Bailout Plan –

Posted: March 22, 2013 in Articles from Blogs I Follow, NEWS, One People's Public Trust (OPPT)
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Russia Puts Pressure On Cyprus PM…

Cypriot legislators have rejected the European Central Bank bailout plan put forward by the IMF and the EU last week. Additionally it appears that the bank levy on all accounts held at Cyprus banks is dead as well, after Russian officials rebuffed Cyprus’ attempt to collect a 9.9% tax on all accounts greater than €100,000.

Cypriot Finance Minister Michael Sarris, already in Moscow prior to the EU bailout plan being announced, has agreed to stay on until a resolution is achieved. He had been there originally to ask for an extension and a lower interest rate on the current Cyprus loan of €2.5 billion, as well as an additional €5 billion loan to help cover the costs of the EU bailout plan.

Cyprus is playing a dangerous game with the Russians, as indicated by the 9.9% levy on accounts over €100,000.

It would appear that a simple $5 billion euro loan would be quite a bit less expensive for the Russians then the 9.9% levy on all accounts over €100,000. The Central Bank of Cyprus handles all banking for the government of Russia, and with Russian deposits said to be over $1 trillion, a 9.9% levy on all of their accounts would equal roughly €100 billion or more, far in excess of the €10 billion needed for the EU bailout plan.

In addition to rejecting the EU bailout plan on Tuesday, it would appear that legislators in Cyprus had come to their senses, additionally rejecting the proposed levy on bank deposits.

Cyprus, a tiny island nation of 1.1 million people, has been held to the same protocol as European sister states Greece, Portugal, Ireland, Spain and Italy, which accepted severe austerity measures linked to the EU bailout programs for their countries. However their GDP is quite a bit higher than that of Cyprus, and they had a larger pool of residents from which to tax, in an effort to recover the funds needed allowing them to stay in line with the EU austerity bailout measures heaped onto their specific governments.

European Central Bank officials have applied an increasing amount of pressure for Cyprus to accept the deal, saying that they needed to accept the bailout quickly or face the prospect that the EU, the IMF and the European Central Bank would leave them twisting in the wind, forcing them to actually declare bankruptcy.

However, this strategy would not have the desired effect, and Russia would be forced into the equation, which may or may not mean that the Russians may take over the country of Cyprus, as they would be forced into paying for the bailout plan rather than pay the levy of 9.9% on all the money they have stored in this bank.

Russia, the number 2 or 3 largest government on our planet, with considerable military might, would not just pay and go quietly, they may threaten military actions if they are forced to bear the brunt of Cypriot banking stupidity.

Russian roulette indeed.

Meanwhile the Cyprus government will keep all banks closed until next Tuesday, after the holiday weekend, and a Cyprus central bank official indicated that unless a new plan was hatched before Tuesday, bankruptcy would assuredly happen on Tuesday, with smaller bank account holders making a run on the bank, as well as businesses with over €100,000 in their account attempting to do the same before the 9.9% levy is imposed.

With both the EU and Russian officials blocking at giving Cyprus a softer deal, it appears that Cyprus will have to take the hard-hit, either actually going bankrupt, or forcing the levy on to all account holders in the Cyprus banking system, something it does not want to do because of the aforementioned Russian response.

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