Cyprus, plan hatched to seize 25% of large bank deposits

Nightmare unfolding in Cyprus, as plan hatched to seize 25% of large bank deposits




Posted on March 23, 2013 by The Extinction Protocol





March 23, 2013 – CYPRUS - Cyprus
said on Saturday it was looking at seizing a quarter of the value of
big deposits at its largest bank, as it races to raise the funds for a
bailout from the European Union and to avert financial collapse.
Finance Minister Michael Sarris said “significant progress” had been
made in talks in Nicosia with officials from the European Union,
European Central Bank and International Monetary Fund. He confirmed
discussions were centered on a possible levy of around 25 percent on
holdings of over 100,000 euros (about $130,000) at Bank of Cyprus, and
expressed hope that a package could be ready by the end of the day for
approval by parliament. Cyprus faces a Monday deadline to clinch a
bailout deal with the EU or the European Central Bank says it will cut
off emergency cash to the island’s over-sized and stricken banks,
spelling certain collapse and a potential exit from Europe’s single
currency. Amid signs of momentum, Cypriot and EU officials said Cypriot
President Nicos Anastasiades was expected in Brussels on Sunday to meet
EU leaders including Council President Herman Van Rompuy and Commission
President Jose-Manuel Barroso, as well as IMF Managing Director
Christine Lagarde and the head of the ECB, Mario Draghi. Protesters in
Cyprus gather outside parliament as government officials try to strike
a bailout deal with the European Union. NBCNews.com’s Dara Brown
reports. Van Rompuy and Barroso canceled a planned EU-Japan summit in
Tokyo to tend to the Cyprus saga and euro zone officials told Reuters
that the bloc’s 17 finance ministers would meet on Sunday afternoon.
“Significant progress has been made in the direction of getting a deal,
at least at the troika level,” Sarris told reporters. He said a number
of issues were still outstanding, but that a package could be ready
“late this afternoon or early evening” for approval by parliament.
Arriving at the troika talks, Andreas Artemi, chairman of Bank of
Cyprus, was asked if a 25 percent haircut was being considered on
uninsured deposits. He replied: “I don’t know that yet.”

http://www.blacklistednews.com/EU_Caught_Playing_Dirty_and_it%E2%80%99s_all_about_Russian_Gas/24915/0/38/38/Y/M.html

EU Caught Playing Dirty and it’s all about Russian Gas


March 23, 2013


Print Version

Source: Oilprice

Oil and gas, that’s all it’s ever been about …


There was a lot going on this week, but it’s all being overshadowed
by the fascinating geopolitical game over Cyprus. This is a stage on
which a country’s pending financial collapse hinges explicitly on its
hydrocarbons potential, and whoever turns up with aid will win access
to exploration blocks.

Yesterday morning, Oilprice.com’s Jen Alic took us through the nuances of this game,
noting that Russia could bail out Cyprus in return for a nice chuck of
exploration acreage offshore. By the close of the day, that is exactly
how things appeared to be unfolding. Later in the day, it began to
emerge that Gazprom had reportedly
offered Cyprus a bailout deal in return for offshore exploration
rights. But by Friday, Russian and Greek Cypriot officials had said no
deal had been reached. The deal Cyprus put on the table was the
creation of a Cypriot state company with control of gas reserves into
which Russian companies could invest, along with a nice stake in
Cypriot banks to be rescued by the Russian investment fund. It’s not
enough for Moscow, which is holding out for more—and likely to get it
if the EU refuses to budge.

This all came after the EU tried to get Cyprus to agree to partially
fund an EU bailout package by putting a levy on bank deposits and
offering account-holders compensation in the form of potential gas
futures. This is where the EU was caught playing dirty—and it’s all
about Russia. Russian oligarchs use Cyprus for their offshore banking
needs, and as such hold a lot of the bigger accounts that would have
been targeted under this scheme.

The EU would never have done this in the past because Russia would
have just turned off the gas spigots that control European supplies.
What’s behind the new bravado? Quite simply, 122 trillion cubic feet of
Mediterranean gas in the Levant Basin, discovered by Israel (in a
US-Israeli partnership), and in Lebanon, Syria and Cyprus. If all goes
well, the estimated 425 billion cubic meters (16 trillion cubic feet)
of gas found in Israel’s Leviathan field will eventually be pumped via
undersea pipeline directly to Turkey and then on to Europe. Another
Israeli gasfield, Tamar, has 250 billion cubic meters (9 trillion cubic
feet) and production should begin in April. This is Europe’s answer to
the Russian gas stranglehold. It’s no longer afraid of Russia turning
the spigot off.

However, it gets tricky when Cyprus isn’t playing along. The Greek
Cypriots rejected the EU bailout scheme and headed straight for Moscow,
knowing full well the power of negotiation behind the island’s
estimated 60 trillion cubic feet of gas.

Moscow played hard to get for a few days, but it wants Cyprus
because if Europe gets ahold of the island’s gas then Russia will
certainly lose its hegemony over the European market. And it’s not
ready quite yet. Its diversification plans to Asian markets has not
been solidified.
This is a race to the finish line to develop
Mediterranean gas. When all is said and done, this Mediterranean gas
could provide 40% of Europe’s total gas needs.

Europe took a gamble here with Cyprus through bailout politics.
Russia’s energy strategy is far more decisive. Not only will Russia now
get a nice chuck of Cyprus’ offshore exploration acreage—it also saves
its oligarchs from a probably 10% loss in their Cyprus bank accounts
courtesy of the now-rejected EU bank deposit levy scheme.

Cyprus has known from the beginning that its bailout is tied to its
potential petrol dollars, while the EU has attempted to couch this in
all manner of moral-high-ground rhetoric.

What will the EU do now? Will it bail Cyprus out on kinder terms to
keep Russia from getting hold of the island’s gas? Monday is D-Day:
This is the deadline the European Central Bank has set for Cyprus to
come up with $6 billion in order to “qualify” for a bailout package.
MORE@LINK

It's up to 40%:

Quote :

...The revised accord spares bank accounts below the insured limit of 100,000 euros. It imposes losses that two EU officials said would be no more than 40 percent on uninsured depositors at Bank of Cyprus Plc, the largest bank, which will take over the viable assets of Cyprus Popular Bank Pcl (CPB), the second biggest. ...

http://www.bloomberg.com/news/2013-03-25/cyprus-to-chop-banking-system-to-win-aid-avoid-default.html