The Great Cyprus Bank Robbery

◼ The Great Cyprus Bank Robbery - Ron Paul/Freedom Outpost

Especially affected have been the elderly, who were unable to use ATMs or to transfer money electronically. Despite the fact that ATMs severely limited the size of withdrawals during the two week-long bank closure, reports indicated that account holders who had access to Cypriot bank branches in London and Athens were able to withdraw most of their funds, leading to speculation that there would be no money available when banks finally opened up again. In other words, the supposed Russian oligarch money may well be already gone.

◼ Mega-Rich Withdrew Money From Cyprus Before Looting - Paul Joseph Watson/Infowars

News that the Cypriot President’s family moved 21 million euros to London days before the bank accounts of his people were looted as part of the bailout deal serves as another reminder that while the media portrays the victims of the Cyprus “haircut” as the mega rich and wealthy Russian oligarchs, the real victims are middle class families and small business owners.

“A company owned by in-laws of Cypriot President Nicos Anastasiades withdrew dozens of millions from Laiki Bank on March 12 and 13, according to an article published in Cypriot newspaper Haravgi,” reports EnetEnglish.

“The newspaper, which is affiliated to the communist-rooted AKEL party, reports that three days before the Eurogroup meeting the company took five promissory notes worth €21m from Laiki Bank and transferred the money to London.”

In addition, as Reuters reports, “While ordinary Cypriots queued at ATM machines to withdraw a few hundred euros as credit card transactions stopped, other depositors used an array of techniques to access their money.”

◼ Money fled Cyprus as president fumbled bailout - Reuters

No one knows exactly how much money has left Cyprus' banks, or where it has gone. The two banks at the centre of the crisis - Cyprus Popular Bank, also known as Laiki, and Bank of Cyprus - have units in London which remained open throughout the week and placed no limits on withdrawals. Bank of Cyprus also owns 80 percent of Russia's Uniastrum Bank, which put no restrictions on withdrawals in Russia. Russians were among Cypriot banks' largest depositors.

◼ As it turns out, these same oligrachs may have used the one week hiatus period of total chaos in the banking system to transfer the bulk of the cash they had deposited with one of the two main Cypriot banks, in the process making the whole punitive point of collapsing the Cyprus financial system entirely moot. - Zerohedge

◼ Earlier: Big depositors in Cyprus's largest bank stand to lose far more than initially feared under a European Union rescue package to save the island from bankruptcy, a source with direct knowledge of the terms said on Friday. - Reuters

Cypriot President Breaks His Silence

◼ “We have no intention of leaving the euro,” he stated this afternoon, adding, “In no way will we experiment with the future of our country.” - Sarah Westwood/Viral Read

“Everyone will have to make sacrifices as our financial situation, in the violent way in which it has developed, will oblige all of us to share the burden,” the president admitted to his embattled nation today. His statement rings tragically true for wealthier foreign and domestic depositors, since his hastily-assembled bailout deal greenlights a raid on all deposits over 100,00 euros. This plan marks a historical departure from all previous euro zone rescues because it is the first time that bank depositors have been forced to accept a loss.

Savings accounts in Spain, Italy and other European countries will be raided if needed to preserve Europe's single currency by propping up failing banks, a senior eurozone official has announced.

◼ Cyprus bail-out: savers will be raided to save euro in future crises, says eurozone chief - Bruno Waterfield, in Brussels/The Telegraph

Cyprus told: take bank levy or leave euro UPDATED

◼ President, eurozone finance ministers and bailout troika hold emergency meeting as €100 limit imposed on ATM withdrawals - The Guardian

The European Central Bank has threatened to cut off funds propping up Cypriot banks on Monday, precipitating the island's exit from the euro if agreement was not reached on Sunday night at the emergency meeting between eurozone finance ministers, the president of Cyprus Nicos Anastasiades, and the bailout troika of the IMF, European Commission and the ECB.

The Europeans, with the Germans and the IMF taking a particularly hard line, demanded the winding up of Cyprus Popular Bank, the country's second biggest, and the restructuring of Bank of Cyprus, the biggest financial institution.

The parties considered new proposals that had emerged over the weekend with European officials speaking of a levy of up to 25% on Bank of Cyprus depositors with accounts holding more than €100,000, plus a further levy of up to 5% on similar deposits in other banks.

"The numbers have not changed. If anything they've got worse," said Wolfgang Schäuble , Germany's finance minister. He said that last week's agreement to raise €5.8bn had to be achieved. This time, however, savers with less than €100,000 would be spared, meaning the burden would fall much more heavily on the wealthy than the 9.9% levy proposed for their accounts last week.

◼ UPDATE: Cyprus clinches last-ditch bailout deal - NBC

Cyprus clinched a last-ditch deal with international lenders on Monday for a 10 billion euro ($13 billion) bailout that will shut down its second largest bank and inflict heavy losses on uninsured depositors, including wealthy Russians.

The agreement emerged after fraught negotiations between President Nicos Anastasiades and heads of the European Union, the European Central Bank and the International Monetary Fund - hours before a deadline to avert a collapse of the banking system.

The plan, swiftly endorsed by euro zone finance ministers, will spare the east Mediterranean island a financial meltdown by winding down Popular Bank of Cyprus, also known as Laiki, and shifting deposits below 100,000 euros to the Bank of Cyprus to create a "good bank".

Deposits above 100,000 euros, which under EU law are not guaranteed, will be frozen and used to resolve debts, and Laiki will effectively be shuttered, with thousands of job losses.

An EU spokesman said no levy would be imposed on any deposits in Cypriot banks. A first attempt at a deal last week collapsed when the Cypriot parliament rejected a proposed levy on all deposits.

◼ Few winners in Cyprus deal - BBC

Days of uncertainty lie ahead.

It is not clear whether the banks will reopen on Tuesday. Neither is it known when restrictions on cash withdrawals will be lifted or what capital controls will be left in place.

There will be big, and innocent, losers.

What happens to the person who parked more than 100,000 euros in an account before buying a property or before paying foreign suppliers?

◼ EU and Cyprus agree to take big depositors’ money without calling it a “tax” - Le-gal In-sur-rec-tion

So the EU has reached a deal to bail out Cyprus, but unlike the prior proposal, there will be no tax levied on anyone.

Insured deposits under 100,000 Euros will be safe and transferred to a new “good” bank, but the losses will be concentrated on the larger depositors who will be stuck at the “bad” bank. And in a move eerily reminiscent of the maneuvering to get Obamacare passed, the deal is structured to avoid calling it a tax (which would require parliamentary approval).

◼ Zero Hedge summarizes what it means: - Zerohedge

… In other words, a deal far worse then the original one proposed by the Eurogroup last week – when the banks still existed. The key appears to be the ‘saving’ of the insured depositors (crucial to avoid a pan-European bank run) and the crushing of the ‘whale’ depositors….

UPDATE: It appears the ‘deal’ to default/restructure the banks has been designed to bypass the need for parliamentary votes, since it is theoretically not a tax.

◼ The Next Phase of the Financial Meltdown in Cyprus: an "Unimaginable" and Vicious Policy is Being Considered - Doug Ross

...Just a week ago the entire financial world shuddered when Cypriot banks were to "tax" (i.e., steal) 12 to 15 percent of deposits.

Now the act of total confiscation of these accounts is on the table.

This is lawlessness. And Statist cheerleaders like Henry Blodget and Paul Krugman support the policies that will bring Cyprus to our shores.

Cyprus looks to take quarter of all large bank accounts

◼ Cyprus said on Saturday it would tax big savers at its largest bank in a dramatic U-turn as it raced to satisfy European partners and seal an 11th-hour bailout deal to avert financial collapse. - Reuters ◼ Via Drudge

Examiner Editorial: Nobody's property is safe when bailouts begin

◼ Imagine checking your bank statement one day only to discover that someone had just taken 10 percent out of your savings account without your permission. - Washington Examiner EDITORIAL

You'd be pretty upset, wouldn't you? So were many citizens of Cyprus, whose government announced last Friday it would be assessing a 9.9 percent "stability levy" on all deposits of more than $100,000 and a 6.75 percent levy on deposits less than that. Cypriots quickly deduced that the government was seizing their property to bail out their nation's banks and immediately tried to withdrawal their funds. To prevent them, the government of Cyprus has declared a bank holiday that has been extended through at least Wednesday.

...But this could never happen in the United States, could it? Wrong. It already did.

When the Obama administration bailed out Chrysler in 2009, it threw out more than 100 years of federal bankruptcy legal precedent by stiffing Chrysler's secured creditors and giving that money to its political allies in the United Auto Workers union.

The lesson Americans should draw from Cyprus is simple: The more the government controls the economy, the less safe their property is from confiscation.

◼ All Roads Lead to Cyprus - Sultan Knish

Cyprus is Europe's original failure. It was the first part of modern Europe to be invaded and colonized by Muslims, while its native Christian population was ethnically cleansed. Cyprus is to Islam what Czechoslovakia was to Nazism; the canary in the coal mine warning of worse things to come.

Now Cyprus has wound up in the middle of the European Union's meltdown as everyone scrambles to salvage what they can from an unsustainable system at the expense of everyone else. It's easy to look at what almost happened as another case of powerful elites abusing ordinary pensioners, but it's a good deal more complicated than that....

Cyprus is the place we go to learn that everything is tangled up with everything else and that there are no more answers left; just blame to be passed around and money to be stolen.

Everyone is deep in debt and no one is going to pay up. And why should they? Southern Europe may have dug itself into a hole, but the Eurocrats ordering them to dig out were the ones who provided the shovel because it seemed like a good idea at the time. Debt was a profitable and useful political tool. It still is.

American Federalism was built on the Federal assumption of state debts. Obama's two-term reign was built on massive bailouts used to consolidate power while reassuring the banks that they would be taken care of. The National Debt is headed into 17 trillion dollar territory because that too is a useful political tool. Driving the debt to the point where it can never be repaid is meant to transform the entire way we do business and spend money. And it's working.

Cyprus was a dirty little demonstration that you can kill two birds with one stone by giving a desperate government two impossible choices. And despite all the reassurances, there is no real reason to believe that it will stay in Cyprus. If anything the last few days have demonstrated how effective that particular tactic is. And once the money has fled Cyprus, the demonstration will be considered a success.

◼ Steve Forbes: Cyprus Bank Levy Is ‘Crazy’ and ‘Destructive’ - Money News

Imposing a levy on bank deposits as a condition for a bailout is “crazy” and “destructive,” writes Steve Forbes, chairman and editor-in-chief of Forbes Media, warning that this idea could be disastrous for everyone.

Cyprus: Savings Seizure Tax – Banks Closed, Assets Frozen, ATMs Broken or Empty

◼ Europe gets to test the plan Obama is clearly interested in – dip into the savings of Americans. - Maggie's Notebook

The Cypriot Prime Minister “agreed to force a tax on all bank deposits” to qualify for a bailout from the International Monetary Fund, the European Commission and the European Central Bank. A citizen of Cyprus or anyone having deposits in the country will pay nothing…the government will just ‘take.’ Charles Barkley is on Fox this minute saying the message to Cyprus is you’re bankrupt, you need €10 billion ($13 million). You have to come up with €6 billion before the €10 billion comes your way. So the €6 billion comes from the people’s savings. No warning. Today through Thursday, if you want to get money out of your bank in Cyprus you are SOL. Closed banks was to be a one day event, then lengthened to Thursday. The question now: which Thursday? Frozen assets, broken or frozen ATMs happening now for the people of Cyprus....

Zerohedge reports that small accounts are also included and that there is likely ◼ no way Bernanke and Obama did not know of the plan. Some of those smaller account are foreign depositors.

...Déjà vu: The people’s money will be used to shore up Cypriot banks. Sound familiar? ◼ Read what’s brewing in the U.S.

DRUDGE HEADLINES:

◼ CYPRUS SHUTS BANKS UNTIL THURSDAY - Reuters
◼ NEW EU BAILOUT PLAN: STEAL BANK ACCOUNTS...
◼ Island set to seize personal savings...
◼ Plan moves ahead as vote delayed...
◼ Putin: 'Unfair,' 'Dangerous'...
FT: Here come bank runs...Financial Times
◼ Germany: Not our idea...
◼ Will Italy follow?
◼ Markets rattled...
◼ Euro tumbles...
◼ Dow drops...

MORE:
◼ Cyprus lawmakers delay emergency vote on bank-deposit tax - LA Times

CBS: White House re:Cyprus bank deposit tax proposal--US takes care not to endorse/comment/etc on EU actions.

— Sharyl Attkisson (@SharylAttkisson) March 18, 2013

◼ First, They Came For The Cypriots... - IBD

Rule Of Law: Markets tumbled after Cyprus and the EU said they might tax private bank accounts to pay for a bailout. Arbitrary property grabs are a new low and a bad precedent in this crisis. Worse still, it can happen here.