Cyprus Refuses to Learn From Its Mistakes

By HUGO DIXON | REUTERS

Published: March 24, 2013

http://www.nytimes.com/2013/03/25/business/global/25iht-dixon25.html?_r=0

The New York Times

Cyprus will pay dearly for its sins. The Mediterranean island has committed many follies over the years — and is still making mistakes.

The Cypriots always seem to overestimate their negotiating position. In recent years, their first big mistake was to reject in 2004 the U.N. plan for uniting their island. That irritated their E.U. partners, put Cyprus in a weak strategic position vis-à-vis Turkey and left a jagged scar across the island.

There’s a Reason for Deposit Insurance

By ROGER LOWENSTEIN

Published: March 23, 2013

The New York Times

http://www.nytimes.com/2013/03/24/business/deposit-insurance-and-the-historical-reasons-for-it.html?src=recg#h[Fatpfd,2]

  FOR all the criticism of bailouts since the financial crisis struck, virtually no one has suggested that depositors in banks be made to suffer along with their investors, employees and customers. Until this week, when the euro zone proposed that, in return for a bailout of the failing banking system in Cyprus, depositors pay a “tax” of 6.75 percent of their deposits — 9.9 percent for deposits above 100,000 euros.

Anxious, angry Cypriots face uncertain future

By Karolina Tagaris and Costas Pitas

NICOSIA | Sun Mar 24, 2013 2:12pm EDT

(Reuters) - Dora Giorgali says she has to go back almost 40 years, when Cyprus was at war, to recall such a feeling of anxiety.

Cyprus seeks 11th-hour deal to avert meltdown

By Michele Kambas and Karolina Tagaris

NICOSIA | Sun Mar 24, 2013 5:14am EDT

(Reuters) - Cypriot President Nicos Anastasiades was expected in Brussels on Sunday to seek an 11th-hour reprieve from financial meltdown, with a bailout from the European Union and the island's place in Europe's single currency bloc hanging in the balance.

Underlining the gravity of Cyprus' position, the EU's economic affairs chief said there were now "only hard choices left" for the latest casualty of the euro zone crisis.

Cyprus weighs big bank levy; bailout goes down to wire

By Karolina Tagaris and Laura Noonan

NICOSIA | Sat Mar 23, 2013 4:34pm EDT

(Reuters) - Cyprus conceded on Saturday to a one-off levy on deposits over 100,000 euros in a dramatic U-turn as it raced to satisfy European partners and seal an 11th-hour bailout deal to avert financial collapse.

Opinion: Why the EU is right on Cyprus

Peter Gumbel

Reuters

5:52 a.m. CDT, March 22, 2013

The reaction to this weekend's European Union bailout deal for Cyprus has gone from initial shock to rather predictable condemnation. "Europe botches another rescue," ran the headline on an editorial in the Financial Times. "It's as if the Europeans are holding up a neon sign, written in Greek and Italian, saying ‘time to stage a run on your banks,' " Paul Krugman, the economist and New York Times columnist wrote on his blog.

Cyprus lawmakers work on economy-saving plan

By MENELAOS HADJICOSTIS, Associated Press – 2 minutes ago 

NICOSIA, Cyprus (AP) — Cypriot authorities were putting the final touches to a plan they hope will convince international lenders to provide the money the country needs to avoid bankruptcy within days.

As well as trying to forge an overall financing package, lawmakers were meeting to decide the fate of the country's second largest lender Laiki which was hardest hit from its exposure to bad Greek debt.

Europe sets Cyprus bailout deadline, banks face cutoff

By Michele Kambas and Lidia Kelly

NICOSIA/MOSCOW | Thu Mar 21, 2013 5:32am EDT

(Reuters) - The European Central Bank gave Cyprus until Monday to raise billions of euros to clinch an international bailout or face losing emergency funds for its crippled banks and inevitable collapse.

The warning came with the island's leaders locked in talks on a "Plan B" to raise 5.8 billion euros demanded by the EU under a 10 billion euro ($13 billion) rescue, after angry lawmakers threw out a tax on deposits as "bank robbery".

Cyprus Is Drowning in an EU Spoon

The Wall Street Journal

U.S. bank bailouts have taken a beating. They were criticized for their excess, uneven distribution and preservation of a status quo that shortchanges the little guy in favor of "stability of the financial system" or, put another way, private gains and socialized losses.

And the bailouts do look pretty awful—until you compare them with what's happening in Europe.

Cyprus seeks Russian rescue, EU threatens cutoff

By Michele Kambas and Lidia Kelly

NICOSIA/MOSCOW | Wed Mar 20, 2013 8:58am EDT

(Reuters) - Cyprus pleaded for a new loan from Russia on Wednesday to avert a financial meltdown, after the island's parliament rejected the terms of a bailout from the EU, raising the risk of default and a bank crash.

Cypriot Finance Minister Michael Sarris said he had not reached a deal at a first meeting with his Russian counterpart Anton Siluanov in Moscow, but talks there would continue.

Κούρεμα καταθέσεων στην Κύπρο

Τι λέει το νέο νομοσχέδιο

Εξαιρούνται από το κούρεμα οι καταθέσεις μέχρι 20 χιλ. ευρώ σύμφωνα με το νέο νομοσχέδιο που κατήρτισε η κυπριακή κυβέρνηση. Όπως αναφέρει το stockwatch, σύμφωνα με το νέο νομοσχέδιο, για καταθέσεις από €0 μέχρι €20 χιλ. η επιβολή τέλους θα είναι μηδενική. Για καταθέσεις από €20 χιλ. μέχρι €100 χιλ. το τέλος θα ανέρχεται στο 6,75%, ενώ για καταθέσεις άνω των €100 χιλ. το τέλος θ’ ανέρχεται στο 9,9%.

EU Member States, Lawmakers Reach Deal on Bank Supervisor

Read more: http://www.nasdaq.com/article/eu-member-states-lawmakers-reach-deal-on-bank-supervisor-20130319-00768#ixzz2O44oyPbu

By Dow Jones Business News,  March 19, 2013, 11:15:00 AM EDT

BRUSSELS--The creation of a single supervisor for European banks moved a step closer Tuesday when European lawmakers struck a deal with member states on the structure of the new agency.

The deal leaves in place most of the main points agreed by European Union finance ministers in December for how the supervisor should function.

Cypriot Lawmakers Reject Deposits Seizure Bill

By MENELAOS HADJICOSTIS and ELENA BECATOROS Associated Press

NICOSIA, Cyprus March 19, 2013 (AP)

Cypriot lawmakers on Tuesday rejected a critical draft bill that would have seized part of people's bank deposits in order to qualify for a vital international bailout, with not a single vote in favor.

The rejection leaves Cyprus's bailout in question. Without external funds, the country's banks face collapse and the government could go bankrupt. Nicosia will now have to come up with an alternative plan to raise the money: the government could try to offer a compromise bill that would be more palatable to lawmakers.

Seen From Greece, Great Depression Looks Good

By FLOYD NORRIS

Published: March 15, 2013
http://www.nytimes.com/2013/03/16/business/economy/seen-from-greece-great-depression-data-looks-good.html?_r=0
The New York Times

 FIVE years into the Great Depression, one out of five workers in the United States was unemployed. The economy was nearly 20 percent smaller in 1934 than it had been at the peak, in 1929.

 The Greeks can only wish they had it so good.

 The Greek government this week released its estimate of economic output in the fourth quarter of last year, and also published its unemployment report.

Cyprus reworks divisive bank tax, delays vote

By Michele Kambas and Karolina Tagaris

NICOSIA | Mon Mar 18, 2013 3:56pm EDT

(Reuters) - Cypriot ministers scrambled to revise a plan to seize money from bank deposits before a parliamentary vote on Tuesday that will either secure the island's financial rescue or threaten its default.

The weekend announcement that Cyprus would impose a tax on bank accounts as part of a 10 billion euro ($13 billion) bailout by the European Union broke with previous practice that depositors' savings were sacrosanct. The euro and stock markets fell on concern the euro zone crisis was reigniting.

UPDATE 8-Savers forced to bear costs in Cyprus bailout

Sat Mar 16, 2013 3:08am EDT

* Cypriot bailout of 10 billion euros agreed by euro zone

* One-off levy on bank deposits to raise almost 6 bln euros

* IMF's Lagarde says backs deal, will make contribution soon

* Cypriots incredulity at decision gives way to fury

By Annika Breidthardt and Robin Emmott and John O'Donnell and Jan Strupczewski

National Bank Falls as Investor Faces Hurdles: Athens Mover

By Natalie Weeks - Mar 15, 2013 2:36 PM GMT+0200

Bloomberg

National Bank of Greece SA, the country’s biggest lender, extended this week’s slide after saying an investor’s interest in covering part of NBG Group’s recapitalization needs is facing hurdles.

Italy’s Borrowing Costs Rise at Bond Auction After Downgrade

By Chiara Vasarri - Mar 13, 2013 2:39 PM GMT+0200

Bloomberg

Italian borrowing costs rose in the first bond auction since a credit rating downgrade last week that highlighted the economic risks of the country’s current political stalemate.

Greece Faces 150,000 Job-Cut Hurdle to Aid Payment: Euro Credit

Bloomberg News

By Maria Petrakis and Marcus Bensasson on March 11, 2013

http://www.businessweek.com/news/2013-03-11/greece-faces-150-000-job-cut-hurdle-to-aid-payment-euro-credit#p1

Greece is locked in talks with international creditors in Athens about shrinking the government workforce by enough to keep bailout payments flowing.

Identifying redundant positions and putting in place a system that will lead to mandatory exits for about 150,000 civil servants by 2015 is a so-called milestone that will determine whether the country gets a 2.8 billion-euro ($3.6 billion) aid instalment due this month. More than a week of talks on that has so far failed to clinch an agreement.

Europe's Rising Social and Political Risks

Posted: 03/11/2013 12:13 pm

Daniel WagnerCEO, Country Risk Solutions
http://www.huffingtonpost.com/daniel-wagner/europes-rising-social-and_b_2853191.html

While income inequality has been falling globally since the 1980s, it has been rising in most of Europe. The Gini Coefficient, a widely used measure of income inequality, has risen since that time not only in Eastern Europe, but among Europe's wealthiest societies.