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Thread: Cyprus...

  1. #1
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    Cyprus...

    I'd really like to hear the European perspective on what is going on in Cyprus right now.

    Obviously its a nightmare. My big concern, as an American, is the wider effects of a run on the banks in Cyprus on the larger European economy and world wide banking as a whole. If one bank fails, it can have a big effect.

    Thoughts?
    A woman goes to the doctor to figure out why she is having breathing problems...The doctor tells her she is overweight. She says she wants a second opinion...the doctor says, "your ugly".

  2. #2
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    Quote Originally Posted by roosterjuicer View Post
    My big concern, as an American
    ...as an American you should just be concerned with not pissing off the middle east. Stop trying to police the world under the guise of "concern" and realise this banking issue will be rectified by a bunch of white collar goons just like every other banking issue in the past century (barring the two WWs). /endthread
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  3. #3
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    Cyprus is another in the European domino effect. However, if the Cypriot proposal to levy a tax on deposits and limit withdrawals goes through, I think that would have just as devastating an effect on banking in Europe as a bank failing. Fearing a similar tax at home, a lot of folks might start closing out their accounts elsewhere. That could lead banks which are stable but on the edge to go over that edge. Cyprus does not worry me as much, simply because the cash injections needed to stabilise it - provided the EU follows roughly the same formula as they have elsewhere - would be a relative drop in the bucket. EU lawmakers might actually agree to just go ahead and get Cyprus done so they can get back to bickering about Spain and Greece.
    An it harm none, do as ye will

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  4. #4
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    In terms of size Cyprus' economy isn't quite large enough to bog down the UE. At least not as much as Portugal, Ireland or Greece have; nevermind Spain or Italy.

    The problem with Cyprus' bailout is that the levy on deposits could set a very dangerous precedent. And this would indeed be devastating.
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  5. #5
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    Quote Originally Posted by Ferrer View Post

    The problem with Cyprus' bailout is that the levy on deposits could set a very dangerous precedent. And this would indeed be devastating.
    That's my concern. Especially if one or two banks there fail.
    A woman goes to the doctor to figure out why she is having breathing problems...The doctor tells her she is overweight. She says she wants a second opinion...the doctor says, "your ugly".

  6. #6
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    Quote Originally Posted by roosterjuicer View Post
    That's my concern. Especially if one or two banks there fail.
    Well it still hasn't been approved by the parliament. However if it isn't, Cyprus could be out of the Euro or do a messt default and those aren't particularly enticing situations either.

    It's a delicate scenery that's for sure.

    The vote will be held tomorrow early in the afternoon.
    Lack of charisma can be fatal.
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    Quote Originally Posted by Ferrer View Post
    Well it still hasn't been approved by the parliament. However if it isn't, Cyprus could be out of the Euro or do a messt default and those aren't particularly enticing situations either.

    It's a delicate scenery that's for sure.

    The vote will be held tomorrow early in the afternoon.
    What's the sentiment in Spain on it right now? Are people in favor of the tax, against, do they think it will happen there?
    A woman goes to the doctor to figure out why she is having breathing problems...The doctor tells her she is overweight. She says she wants a second opinion...the doctor says, "your ugly".

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    Cyprus has always been a tax haven for the rich, some consider it to be a cowboy/banana republic. If they want to belong to the grown-up world they have to pay a price, and preferably the price has to be paid by the people who used the Cyprus banking system to avoid taxes in other countries. Otherwise they might want to consider to join forces with the Cayman Islands.
    "I find the whole business of religion profoundly interesting, but it does mystify me that otherwise intelligent people take it seriously." Douglas Adams

  9. #9
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    Quote Originally Posted by roosterjuicer View Post
    What's the sentiment in Spain on it right now? Are people in favor of the tax, against, do they think it will happen there?
    People are against it. There's no panic, but we are paying attention to see what's the final outcome. Then things my change from calm to... who knows what actually...
    Quote Originally Posted by henk4 View Post
    Cyprus has always been a tax haven for the rich, some consider it to be a cowboy/banana republic. If they want to belong to the grown-up world they have to pay a price, and preferably the price has to be paid by the people who used the Cyprus banking system to avoid taxes in other countries. Otherwise they might want to consider to join forces with the Cayman Islands.
    Some say that it is a move against the very numerous Russian deposits of dubious provenance in the island's banks...
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  10. #10
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    So far all of the reports I have heard (scant coverage in the US of international proceedings, so it isn't many) say that people are very much against this move.
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  11. #11
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    Quote Originally Posted by Ferrer View Post
    Some say that it is a move against the very numerous Russian deposits of dubious provenance in the island's banks...
    The Russians came much later, the so-called Cyprus route has been very popular in a great number of West european countries for a long time. Cyprus is actually not a country but a legalised money laundering machine. You can say they have been stealing money from other countries that should normally been paid as taxes. I cannot remember having heard the Cyprus population protesting against these practices, because it gave them an income too. Now that machine has faltered, it is only that they also contribute to the repairs.
    In the past the Cyprus flag has also been notoriously attractive for the less scrupulous shipowners, who don't like to pay the cost for fully. complying to international standards.

    The latest news is that the Cyprus government has been allowed by the EC to vary the levy system a little bit, let's hope that they take money form the large accounts, and not small deposits say up to 30-40k Euros.
    Last edited by henk4; 03-18-2013 at 11:27 PM.
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  12. #12
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    Quote Originally Posted by henk4 View Post
    The Russians came much later, the so-called Cyprus route has been very popular in a great number of West european countries for a long time. Cyprus is actually not a country but a legalised money laundering machine. You can say they have been stealing money from other countries that should normally been paid as taxes. I cannot remember having heard the Cyprus population protesting against these practices, because it gave them an income too. Now that machine has faltered, it is only that they also contribute to the repairs.
    In the past the Cyprus flag has also been notoriously attractive for the less scrupulous shipowners, who don't like to pay the cost for fully. complying to international standards.

    The latest news is that the Cyprus government has been allowed by the EC to vary the levy system a little bit, let's hope that they take money form the large accounts, and not small deposits say up to 30-40k Euros.
    Latest news I've heard this morning on the radio is that deposits under 100k € would be safe, but that they will take a higher percentage from deposits over 100k €.
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  13. #13
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    Quote Originally Posted by henk4 View Post
    You can say they have been stealing money from other countries that should normally been paid as taxes.

    The latest news is that the Cyprus government has been allowed by the EC to vary the levy system a little bit, let's hope that they take money form the large accounts, and not small deposits say up to 30-40k Euros.
    Interesting take Henk, and I can't say I disagree. I'm sure there would be a lot less pushback if the levy only hit the illegitimate accounts. Of course, it would be difficult to determine which accounts are legit and which arent.

    The last I heard was the smaller tax would hit accounts over 25k and the larger would hit accounts over 100k.

    While I don't think 25k in savings counts as "small account" i think this is a good move that will stop a lot of people from making a run on the banks. I dont know what kind of savings people retire on there but 25k in an American retiree's savings account would not be unusual in the middle class.
    A woman goes to the doctor to figure out why she is having breathing problems...The doctor tells her she is overweight. She says she wants a second opinion...the doctor says, "your ugly".

  14. #14
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    Most European countries ( cant be sure for Cyprus ) provide the pension arrangement via the government. So the 25k in a US retiree account is really in the governments hands having been collected via taxes.
    Private pensions aren't historically big in the UK but have been forced on many since Thatcher and her cronies raided large company pension schemes
    Not many British pensioners have those kind of sums and if they do they are then "means tested" for certain health benefits. Leading to many having to spend all of it for basic care in England before they will get assistance from the state. ( In Scotland we still provide free care for pensioners - and most Scots are happy to do so for the better good )
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  15. #15
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    Well, looks like they aborted the bank fee plan.
    An it harm none, do as ye will

    Approximately 79% of statistics are made up.

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