Whats going on in cyprus? | Emergency Preparedness | Forums

This was linked from DrudgeReport. http://www.guardian......avings-tax

I guess i'm not really sure whats going on because Russia is saying the will bail them out also in return for some gas rights. Banks are to open tomorrow I wonder if there will be a run on the banks when they reopen.

Found this on Reddit.

Let those lazy Cypriots pay for spending money relentlessly/tax-evading/etc

The problem in Cyprus is not similar to other EU countries. Of course the country is responsible for it, but in a different way. Cypriot banks, had the vast majority of their money invested in Greek bonds, and this is where the mistake lies. In case you are wondering, this is probably a combination of incompetence, and historical/cultural connections between Cyprus and Greece. As soon as the EU took the decision to wipe the value of those bonds by 80% for saving Greece, banks in Cyprus took a huge hit and these are the effects now.

But Cyprus has way too many deposits that reach almost 700% of their GDP

This is an irrelevant fact, as Cyprus had a healthy economy, up until the EU bailing out Greece (read previous paragraph).

Money in Cyprus banks is owned by the Russian mafia and is the result of money laundering

There has never been any evidence whatsoever in Cyprus of money laundering, despite repeated checks by the EU. In fact, EU's own agencies rank Cyprus better than countries like Germany, when it comes to compliance to EU laws for money laundering. Money laundering is a crime, and if there was any proof about it, the money would had been confiscated long ago.

http://www.frank-cs......toryid=473

But it's the Cypriot government that decided on this tax; why aren't the people of the Cyprus upset at their government?

The president was blackmailed by the EU/IMF, with the original proposal being to tax 40% of all Russian (or foreign?) deposits on the island. Everybody knew well that this would had a disastrous effect on Cyprus as a banking investing center, since foreign capital would flee out of the country. In order to avoid the alternative of getting kicked out of the Eurozone, the 6.75%/10% proposal was brought on the table by the government as a way to mitigate the damage across the board (given that the alternative was to get kicked out of the Euro).

Those lazy Cypriots have been enjoying 4% interest rates in years; what's a 10% tax to them?

Cyprus deposit rates have been high indeed, but loan rates have been much higher than the Eurozone as well. Overall, they've maintained a very healthy spread between deposit and loan rates for years now, and that is definitely not a factor in today's problems.

http://blogs.wsj.com.....a-lot-too/

Regardless of all of this, people there don't want to pay 10% for saving their country?

It is not about the money, but it's the unfairness of it. Unfairness for many reasons, one of which being that the problem exists in the first place, because of a previous decision taken by the EU (read first paragraph). We are talking about proud people that went through an actual war 39 years ago (not that long ago), and had to start from zero back then. They are willing to do it again, if it means not selling their country to foreigners.

So, they expect Germans to pay for their mess?

Recent estimates say that Germany will save at least 15 billion Euros in the next decade, because of the Euro crisis today. Link provided below so I won't go into details. Also, any potential loan will be paid by the IMF, the ECB and the countries of the Eurozone; not simply Germany. Also in order to understand the sizes we are talking about here, the GDP of the EU is 13 trillion, and Cyprus needs 6 billion for saving their banks (that's what the whole discussion is about).

http://www.reuters.c.....H020130318

Why are so many countries interested in this issue?

The Cyprus situation extends well beyond the economical aspects of the problem. In particular, there have been large newly discovered natural gas reserves south of the island. The one who gets to bail out the country from this mess, gets to set their own terms, and if played right, gets to have control over these very valuable resources. This is Europe's one chance to become less reliant on Russia, for natural gas. For Russia, this extends beyond the natural gas, to a military advantage as well, as they are about to lose their only naval base in the Mediterranean, which now exists in Syria.