The Cyprus parliament rejected this plan unanimously a few minutes ago, presumably because they didn’t want to be hacked to death in the streets.
It’s the story of our American policy makers as well- they are so unused to being accountable to the American people, because their real masters are the PACS and wealthy casino owners and Wall Street and big business, that sometimes their own hubris blindsides them. I’m actually kind of surprised anyone actually thought the people of Cyprus would stand for this and that it even made it to a vote.
Deb T
I don’t know how they thought they could get away with it, except they seem to get away with everything these days.
legion
Am I a bad person for thinking that if a few members of our Congress were concerned about being hacked to death in the streets, we might have fewer problems?
Corner Stone
Well, the Greeks haven’t assassinated any political person yet, to my awareness at least, and knowing those cranky bastards I would’ve bet money that the mobs in the streets would’ve led next to torching politicians homes.
The Cypriots really, in all honesty, probably didn’t change this vote. IMO.
The connected KGB private businessman washing their cash changed this outcome.
That’s just IMO, no data to backup.
legion
Am I a bad person for thinking that if a few members of our Congress were concerned about being hacked to death in the streets, we might have fewer problems?
Corner Stone
Still don’t understand how this does not lead to a general bank run in the EZ.
What are they waiting for? It to become real overnight next time in Spain?
Baud
@Corner Stone:
If there wasn’t a run today, I don’t see why there would be one later
Michael Finn
If you are talking about TARP and our own financial problems back then you may have overlooked what happened when congress DIDN’T pass it. The Stock market went down 1K points. It may have been distasteful but our bueurocrats did what was necessary to save the country. The Europeans have yet to do so.
Roger Moore
@legion:
Only if it were the right few members of Congress. Unfortunately, it’s far more likely that the people putting fear of dismemberment into Congress would be right wing freaks scaring lefties than the other way around, so it would probably have a negative overall effect.
kindness
Be patient John. At some point some whack doodle is going to start offing political types and/or media types. Those will not be fun times.
Deb T
@legion:
We’ve all thought it.
MattF
It reminds me of Leona Helmsley– “Only little people pay taxes”. In this case, there’s also supporting cast of multinational institutions, Russian gangsters, and a few neo-Nazis in the wings, but basically it’s Leona all over again.
Violet
The banksters tried and failed. They’ll try again, maybe in Cyprus, maybe in another Euro country. Maybe they’ll try the same thing, but a little less of a cut or they’ll go with a new method. They will not give up their money easily.
mdblanche
@Baud: It’s enough to make you wonder if fears of contagion are overblown.
Corner Stone
@Baud:
Kind of my point, I guess. Any hope that constructive destruction is coming is more than wishful thinking and irrespective of the modern human condition.
Rex Everything
It wasn’t DougJ, it was mistermix.
drj
Maybe this has been pointed out before, but it seems the Cypriot government – and not the EU finance ministers – came up with the unholy idea to levy a 6.75 percent tax on bank deposits of a 100K euros or less.
From yesterday’s statement by the EU finance ministers:
“The Eurogroup continues to be of the view that small depositors should be treated differently from large depositors and reaffirms the importance of fully guaranteeing deposits below EUR 100.000. The Cypriot authorities will introduce more progressivity in the one-off levy compared to what was agreed on 16 March, provided that it continues yielding the targeted reduction of the financing envelope and, hence, does not impact the overall amount of financial assistance up to EUR 10bn.”
So it seems likely the Cypriot people were about to get screwed by its own government rather than the EU.
For by taxing the small deposit holders, the Russian oligarchs (who own most of the deposits held by Cypriot banks) would be on the hook for less.
SG
I’ve been consistently surprised that the banksters and job-killing CEOs haven’t been attacked on the streets or in the boardrooms.
ShadeTail
I wonder how many Cyprus citizens called their legislators and told them in no uncertain terms that they *would* get hacked to death in the streets if they did this?
I wonder how many American citizens would do the same in that situation?
Pooh
@ShadeTail: I’ve said it before here, but I wonder when we are going to start seeing “think pieces” by VSPs about why eliminating FDIC would be a good thing.
mdblanche
The worst outcome for the European establishment today is if it’s not the end of the world. All their persuasive power has been based on fear: do what we tell you or your country and the entire continent will be destroyed. Finally someone said no. If the dire consequences promised don’t show up, someone else will say no too. As of now the Dow Jones is slightly up for the day so it’s not like the markets are panicking over this vote. This time the ECB, IMF, etc. may have overreached and damaged their “bargaining” position permanently.
@drj: Everybody’s been pointing fingers at everybody else about whose to blame since this turned into a fustercluck. The first one I’ll believe is the one from the person who says it’s their fault.
Suffern ACE
@Corner Stone:
Simple. Their elected officials and papers all just write stories like – our deposit system is fully funded and could handle the collapse of all of our banks and Cyprus is about evil russian oligarch money – and we’re good.
Nemo_N
We are reaching satire levels here:
You can’t make this stuff up.
Suffern ACE
@mdblanche: O.K. so apparently the emergency funding line for one of the Cypriot banks ends on March 21. I guess we’ll find out in 2 days what happens next.
Violet
@Nemo_N: That’s awesome. And good of them to advertise it as well. I hope the plane is well protected.
scav
@Suffern ACE: Well, it would help if those little people trusted their politicians for that to work. Do they? Do they trust the bankers and Northern European (German) bureaucrats? They may not have leapt into panic raids right away, waiting for more information and the situation to play out, but I wouldn’t believe all is safe and cool, no problems, not quite yet. This didn’t help anything on the confidence front.
scav
@Nemo_N: You catch the bit where they’d stopped payment to their troops so the money wouldn’t be in the banks to get lopped? I assume this is the second step.
Joseph Nobles
@Rex Everything: Yeah, I think Cole just saw a nutty long name and thought it was one of DougJ’s handles.
patroclus
@drj: Yes, this was the Cypriot government’s idea. Most commenters seem to be missing this relevant fact. And, because it failed, they’ll have to come up with something else (probably equally bad) if they want the bailout.
mdblanche
@Suffern ACE: That’s the problem, isn’t it? All the atrocious behavior the financial establishment has shown in the last few years has shredded their credibility. Even their legitimate warnings risk falling on deaf ears with the public. And now one parliament is more with the public than with them.
Corner Stone
@patroclus: Hmmm. ISTM the EU just wanted their fucking money and didn’t give a shit who it came from.
“Business bad? “Fuck you, pay me.” Oh, you had a fire? “Fuck you, pay me.” Place got hit by lightning, huh? “Fuck you, pay me.”
The Cypriot banking system was scared the Russian mafia would think they were being unfairly targeted so they sent in smaller depositors too since the small depositors were much less likely to kill them and their mistress at the vacation home on the coast.
Eric U.
@Nemo_N: it happens all the time. I used to work with a C141 pilot. He said his scariest flight was into Lebanon to deliver money to the troops. Landing in what amounted to a war zone and all he was carrying was a single pallet.
Corner Stone
I love Jeremy Scahill.
Corner Stone
Can we nuke Brookings Institution from orbit?
It’s the only way to be sure.
scav
@patroclus: Little more complicated than that. both sides contributed to the badness. Cyprus bailout: how Nicos walked straight into a German sucker punch
The Cypriots helped by putting more a squeeze on small savers, mustn’t scare off the overseas depositors and Russians.
Omnes Omnibus
@Corner Stone: Why Brookings in particular?
El Cid
On the plus side, at least there was a very clear and contemporaneous demonstration that Cypriots would be having money taken from them.
Now, most likely, they’ll do it the smart way, and figure out how to take the money but to hide the taking of it in different ways and over a longer term.
Corner Stone
@Omnes Omnibus: IMO, they are probably the absolute worst “cover” for liberal hawks and hiding neo-cons under liberal clothing.
I wish them harm.
Omnes Omnibus
@Corner Stone: Okay. Fair enough.
Violet
From The Guardian liveblog of the Cyprus situation:
patroclus
@scav: Yeah, the Cypriot government would never have proposed this absent the pressure from the EU, ECB and IMF (i.e., Germany). So, blame is indeed shared. But they didn’t have to come up with this particular idea – they could have chosen a method that wasn’t this unpopular. Their next idea won’t be popular either, but hopefully, for their sake, it’ll be less unpopular.
Sad_Dem
To paraphrase Dr. Johnson, fear of being immediately hacked to death in the streets concentrates the mind wonderfully.
Anna in PDX
@legion: No, you aren’t a bad person for thinking this – maybe for the double posting though (J/K)
I often think that it would clarify their thinking if we brought back guillotines and tumbrels, so what would that make me? A real monster I guess…
pseudonymous in nc
@patroclus:
The implication being that they’re accepting their status as an offshore banker to the Russian oligarchs, and would prefer to haircut the small depositors than whack the big depositors with the full cost. The foreign minister is off to Moscow.
Thing is, even with all that dodgy money, the Cypriot banks’ balance sheets are fucked. Best case scenario appears to be if the bigger ones get bought out lock-stock by the Russians, which allows the EU to kick the can a bit further down the road without a direct transfer of funds to the mob.
Ruckus
@Violet:
They will not give up their money easily.
I think it is best to understand the money they want is Not their money. It is money that effectively belongs to all of us, to our governments, to our kids, to our grandparents. It most assuredly does not belong to them. That’s why they have to figure out ways to steal it without us noticing.
My father used to tell me, you are not collecting money that someone owes you, you are collecting your money. But that’s not what the banking business is doing. We don’t owe it to them, they have to earn it. They can’t earn enough to satisfy their greed so they have to steal it.
Ruckus
@patroclus:
Wasn’t the original idea from ECB and IMF that it was 40%? I’d bet that Cypress was told that to change that Cyprus would have to come up with an alternate plan and claim it. So maybe this was technically a Cyprus plan but only in the loosest terms. I could be full of it though.
Lurking Canadian
@Michael Finn: This is not TARP. The equivalent would have been if TARP consisted of the government just taking$30K from each citizen to give the banks. TARP, being borrowed money, could be repaid by taxation over a long time, or never.