Euro Area

[gaelic cowboy]

Oh come on, the spice money must flow.

And if it's sitting idle on some bank account, it is actively hurting the economy, they should take 50% and tell people to invest or lose.
It's also funny how everybody is putting the blame on Germany when we wanted to spare the small savers who have below 100k.
I just heard on the radio that that was our plan but cypriot politicians (the elected kind) and the EU(the bank mostly IIRC) wanted to include everyone.

Husar the banks are already lending your money when it's on deposit and even when there is NONE there still lending it on the strength of assets. A million in a back account is not idle however a million in a tin box under the bed most certainly is.

This bailout encourages tin box banking which could cause another bailout next year(and potential bank runs if anyone else needs a bailout later on)

This little BBC article supports that notion with the following quote:


There was even an idea they mentioned that the small savers would be given shares of the bank in return.
You can put your sensationalist outrage under your pillows, next to that stash of money that is destroying your economy a bit more every day.

shares in banks that are bust while the bondholders will get full returns its frankly immoral

It is now clear that negotiators of the bailout in Brussels drastically underestimated the reaction in Cyprus, says the BBC's Mark Lowen.

A tiny eurozone economy feels it is being blackmailed by the most powerful, and the growing resentment will do nothing to foster European solidarity,

Did they seriously not expect people to react badly

Stocks tumble as Cyprus reworks divisive bank tax

MICHELE KAMBAS – 18 MARCH 2013 Irish Independent

CYPRIOT ministers were trying to revise a plan to seize money from bank deposits before a parliamentary vote tomorrow that will secure the island's financial rescue or could lead to its default, with reverberations across the euro zone.

Spoiler Alert, click show to read: 

The weekend announcement that Cyprus would impose a tax on bank accounts as part of a €10bn 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 returning.

Before the vote, which is too close to call, the government was working to soften the blow to smaller savers by tilting more of the tax towards those with deposits greater than €100,000. Many of these depositors Russians and the planned levy has already elicited an angry reaction from President Vladimir Putin.

The government says Cyprus has no choice but to accept the bailout with the tax on deposits, or go bankrupt.

A Cypriot source told Reuters the introduction of a tax-free threshold for smaller bank deposits - maybe up to €20,000 - was under discussion but not yet agreed.

The parliamentary speaker said debate on the bank levy would be delayed until 1600 GMT tomorrow, suggesting banks, shut today for a bank holiday, will remain closed tomorrow

The euro zone has indicated that changes would be acceptable as long as the return of around six billion euros is maintained. If the Cypriot parliament votes the deal down, the euro zone would face a risk of being dragged back into crisis.

"It is up to the government alone to decide if it wants to change the structure of the ... contribution (from) the banking sector," European Central Bank policymaker Joerg Asmussen, who was pivotal in the weekend negotiations, told reporters on the sidelines of a Berlin conference.

"The important thing is that the financial contribution of 5.8 billion euros remains," he said.

Residents on the island emptied cash machines to get their funds over the weekend. The move also unnerved depositors in the euro zone's weaker economies. Investors feared a precedent that could reignite market turmoil that the European Central Bank has calmed in recent months with its pledge to do whatever it takes to save the euro.

The euro fell before tempering losses. European stocks did similarly, dropping two percent before more than halving losses.

In the bond market - often the most reliable guide to euro zone stress - safe haven German Bund futures shot up while Italian equivalents dived, suggesting some concern that Cyprus could infect its larger neighbours.

"The most important question is what would happen the following day if the bill isn't voted," Cyprus central bank governor Panicos Demetriades told parliament.

"What would certainly happen is that our two big banks would need to be consolidated. This doesn't mean that they would be completely destroyed. We will aim for this to happen in a completely orderly way."

Brussels has emphasised that the measure is a one-off for a country that accounts for just 0.2 percent of European output. The worst fear is that savers in other, larger European countries become nervous and start withdrawing funds, although there was no immediate sign of that on Monday.

U.S. economist Paul Krugman wrote in The New York 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!'"


PUTIN ANGRY

Cyprus's banking sector dwarfs the size of its economy and its banks have been severely hurt by exposure to much larger neighbour Greece.

Its open economy has meant its banks also attract cash from Russians. Moscow is considering extending an existing 2.5 billion euro loan to help bail the island out and said the fact it had not been consulted about the bailout would come into play.

"It turns out that the euro zone actions ... took place without discussions with Russia, so we will consider the issue of restructuring the (Cyprus) loan taking into account our participation in the joint actions with the European Union," Russian Finance Minister Anton Siluanov told Reuters.

President Vladimir Putin criticised the bank levy as unfair and setting a dangerous precedent.

"Putin said that such a decision, should it be made, would be unfair, unprofessional and dangerous," Kremlin spokesman Dmitry Peskov told reporters.




Approval in Cyprus's fractious 56-member parliament is far from a given: no party has an absolute majority and three parties say outright they will not back the tax. A vote initially planned for Sunday was rescheduled to give more time to build a consensus.

On Sunday, a source close to the consultations told Reuters authorities were hoping to cut the tax to 3.0 percent from 6.7 percent for deposits under 100,000 euros. The rate for deposits above that would then be jacked up to 12.5 percent from 9.9 percent.

Cypriot President Nicos Anastasiades, a conservative elected just three weeks ago, said in a TV address that the tax was an alternative to a disorderly bankruptcy. It was painful, but "will eventually stabilise the economy and lead it to recovery".

Savers who lost money would be compensated by shares in commercial banks, with equity returns guaranteed by future revenues expected from natural gas discoveries, Anastasiades said. But many legislators remain unconvinced.

"Essentially parliament is called to legalise a decision to rob depositors blind, against every written and unwritten law," said Yiannakis Omirou, speaker of parliament and head of EDEK, the small Socialist party. "We refuse to subscribe to this."

A country that I beleive is what .1% of the GDP of EU sends EU markets down by a many multiples of that.

Cyprus deal sends shares tumbling and pushes gold up

MARC JONES – 18 MARCH 2013

THE surprise decision by euro zone leaders to part-fund a bailout of Cyprus by taxing bank deposits sent shockwaves through financial markets today, with shares and the bonds of struggling euro zone governments tumbling.

Spoiler Alert, click show to read: 

The bloc struck a deal on Saturday to hand Cyprus rescue loans worth €10bn, but defied warnings - including from the European Central Bank - and imposed a levy that would see those with cash in the island's banks lose between 6.75 and 9.9 percent of their money.

Parliament in Cyprus put off a vote on the measure - which has shaken depositors' confidence in banks across the continent

- until tomorrow, however, and with public anger at the deal widespread the government said it was already looking to ease the pain for small savers.

Without the rescue, Cyprus would have be unable to avoid a default.

That would have undermined the promise that Greece's debt writedown last year was a one-off, but the unprecedented move to hit depositors adds a radical new dimension to the crisis across the euro zone.

The initial response of investors was unambiguous. Shares lurched lower, the euro fell to a new three-month low, while safe-haven assets such as gold and German government bonds jumped.

The cost of insuring the debt of even high-quality European banks against default also rose sharply with analysts citing fears the decision could spark contagion across peripheral regions with the potential for widespread outflows of deposits.

"If I were a saver, certainly in Spain or maybe Italy, I think I'd be looking askance at these measures and think this could yet happen to me," Peter Dixon, global financial economist at Commerzbank said.

The European Markit iTraxx senior financials index, which tracks the most important European bank credit default swap (CDS) rates, widened by 17 basis points.

Some credit default swaps in Spanish, Italian and Portuguese banks widened more sharply with the five-year CDS for Spain's

Santander 30 basis points higher, while for Italy's UniCredit it was 23.5 basis points wider.

However, some in the markets were drawing support from a view that the safety measures put in place at the European Central Bank should contain the fallout.

"Clearly this is a negative development for European assets but in the terms of contagion we think it is quite limited," said Guillermo Felices, head euro asset allocation at Barclays in London.

"There are tools - such as the ECB's OMT (bond buying programme) and the option of more 3-year LTROs (ECB loans to banks) that can provide liquidity if needed - that the market will feel comfortable about when assessing the longer-term implications."

Three of the world's biggest central banks are also expected to signal their fresh commitment to loose monetary policies this

week.

The Bank of Japan welcomes a new governor on Wednesday who is likely to begin pumping huge amounts of yen into the recession-hit economy. On the same day the Bank of England may get a new pro-growth mandate in the British government's annual budget, while the Federal Reserve is expected to reaffirm its commitment to the current aggressive U.S. bond-buying programme.

Equity markets were underscoring the more immediate worries, however, that the Cyprus deal could see savers and firms in other highly indebted countries like Italy and Spain rush to pull money out of their own banks.

By 1115 GMT the pan-European FTSEurofirst 300 had clawed back around half of its initial losses but was still down 0.8 percent in its worst morning since last month's inconclusive Italian election.

London's FTSE 100, Frankfurt's DAX and Paris's CAC-40 were down 0.8, 1 and 1.4 percent respectively, leaving MSCI's global share index down 0.85 percent.





CENTRAL BANK SUPPORT

In the currency market, the euro staged a slight recovery after having dropped as low as $1.2882 in the Asian trade, to session be up 0.1 percent on the day $1.2950.

The dollar itself, which investors often head for when tensions in Europe rise, gained 0.45 percent.

"Euro zone politicians will be at pains today to manage down the danger of contagion to other markets. The euro will find a little bit of support from that but markets will remain jittery," said Jane Foley, senior currency strategist at Rabobank.

Italian and Spanish bond yields both jumped sharply as the two countries remain at the centre of concern in the euro zone due to the size of their economies which some economists warn would be too big to rescue.

If savers and firms did pull their money en masse from already strained banks it could tip the region back into full-blown crisis, although the ECB's backstop measures are designed to prevent such problems.

The widespread anxiety drove up German government bonds, the traditional favourite of risk-adverse European investors, and indiscriminately pushed up the cost of insuring against a sovereign default in the euro zone's southern rim.

[drone]

Nothing solves an economic crisis like a bank run. Well done!

[gaelic cowboy]

Nothing solves an economic crisis like a bank run. Well done!

Why didnt they just take it all from everyone over the €100,000 mark and pay for the whole bailout??

[Husar]

Husar the banks are already lending your money when it's on deposit and even when there is NONE there still lending it on the strength of assets. A million in a back account is not idle however a million in a tin box under the bed most certainly is.

Already said I'm aware of this, but it means you entrust your money to the bank, and if your bank cannot be trusted then you lose your money. Now the government may guarantee some amount but it seems like the government can't be trusted and the fault for this lies with the people, who elected that government. If the people trusted a lie and didn't check back whether all these guarantees actually work out, then it's their own fault for electing the same liars again and again. Now you may say some 48% or whatever didn't elect the liars but that's how the world works. People die every day and it's none of their fault. The alternative is to let the banks go belly up and then 100% of the savings are lost.

The real issue is that nothing was done about the reliance on the banks before they went down the drain and nothing is being done about it now that the problems are obvious. And to say that the government should do something is funny because half of Europe elected conservative, free-market parties that are against government meddling in the private industry.

And @Andres, if you have such a problem with Cypriots surrendering some of their money to get money from Germany and the EU, maybe you want Belgian taxpayers to chip in the amount that the Cypriots would have to pay instead?

[gaelic cowboy]

Already said I'm aware of this, but it means you entrust your money to the bank, and if your bank cannot be trusted then you lose your money. Now the government may guarantee some amount but it seems like the government can't be trusted and the fault for this lies with the people, who elected that government. If the people trusted a lie and didn't check back whether all these guarantees actually work out, then it's their own fault for electing the same liars again and again. Now you may say some 48% or whatever didn't elect the liars but that's how the world works. People die every day and it's none of their fault. The alternative is to let the banks go belly up and then 100% of the savings are lost.

this could be edited quite easily to say Germans closed there eyes to the faults of the Euro and it's banking system too.

Or more simply there is enough blame to go round in both the borrower and lender category.

No exchange rate difference was taken for no risk by lenders and borrowers, we now know that was totally wrong but it is been rewarded by heaping bailout debts onto sovereigns.

The real issue is that nothing was done about the reliance on the banks before they went down the drain and nothing is being done about it now that the problems are obvious. And to say that the government should do something is funny because half of Europe elected conservative, free-market parties that are against government meddling in the private industry.

Indeed and the simplest thing to do is just allow outright monetary financing of all eurozone banks by the ECB. but that wont happen.

At it's core this problem was a pan european bank to bank up which has exposed the poor design of EMU.

You wont solve this problem heaping debts on countries balance sheets when the problem is banking liquidity.

[Andres]

Already said I'm aware of this, but it means you entrust your money to the bank, and if your bank cannot be trusted then you lose your money. Now the government may guarantee some amount but it seems like the government can't be trusted and the fault for this lies with the people, who elected that government. If the people trusted a lie and didn't check back whether all these guarantees actually work out, then it's their own fault for electing the same liars again and again. Now you may say some 48% or whatever didn't elect the liars but that's how the world works. People die every day and it's none of their fault. The alternative is to let the banks go belly up and then 100% of the savings are lost.

The real issue is that nothing was done about the reliance on the banks before they went down the drain and nothing is being done about it now that the problems are obvious. And to say that the government should do something is funny because half of Europe elected conservative, free-market parties that are against government meddling in the private industry.

And @Andres, if you have such a problem with Cypriots surrendering some of their money to get money from Germany and the EU, maybe you want Belgian taxpayers to chip in the amount that the Cypriots would have to pay instead?

Is this the best they could come up with?

Why not saving the banks by splitting them and putting the toxic products in "bad banks", use European money to recapitalise the "good banks" and bring those "good banks" under control of Europe?

And please, don't give a fleming lessons in solidarity. I have been paying for Wallonia's misery ever since I started working, yet no hair on my head that thinks about robbing the Walloon citizens of my country of their hard earned savings. Their politicians are scum, but that doesn't mean I would ever advocate robbing the Walloon population of their savings.

If that is the sentiment in Germany, then perhaps you should just admit you don't really want a European Union where we stick together in good times and in bad and instead leave us, so that we can devaluate the euro; a measure we can't take with Germany in the Union, since then it would only benefit Germany.

But you won't, because the Euro suits German interests very well. If Germany were outside the Eurozone, your German Mark would be a much stronger currency than the Euro, which would be bad for your succesful export. Compared to what the German Mark would be, the Euro, certainly without Germany in the zone, is weak, so you can now hide behind the Euro which benefits your economy at the expense of the rest of Europe.

You can look at it from that angle too, you know.

Anyway, I'm not saying Germany should just pay off debts of the poorer southern countries, but robbing the population like that is not the way to go. I don't know how this is sold to the German people, but you undermine the entire European banking system with this measure. You are asking for a run on the banks which will make things much worse for the Cypriotic people. And the Italian, Spanish, Portugese and Greek.

[Andres]

Indeed and the simplest thing to do is just allow outright monetary financing of all eurozone banks by the ECB. but that wont happen.

That's indeed a much better solution (after splitting the toxic products off of the rest).

[Husar]

this could be edited quite easily to say Germans closed there eyes to the faults of the Euro and it's banking system too.

We closed our eyes when the Eurozone was established already, I never disputed that and have to live with it today...

Why not saving the banks by splitting them and putting the toxic products in "bad banks", use European money to recapitalise the "good banks" and bring those "good banks" under control of Europe?

Because that's socialism.
Also who wants a bad bank and what do you do with them?

And please, don't give a fleming lessons in solidarity. I have been paying for Wallonia's misery ever since I started working, yet no hair on my head that thinks about robbing the Walloon citizens of my country of their hard earned savings. Their politicians are scum, but that doesn't mean I would ever advocate robbing the Walloon population of their savings.

We paid Russia to get East Germany and then we started to pay East Germany to get anywhere, additionally the German states also redistribute money from stronger to weaker ones. However, they are also all united under a central government that establishes some rules, which is the part where the Eurozone fails miserably because everybody still believes in independent nation states...

If that is the sentiment in Germany, then perhaps you should just admit you don't really want a European Union where we stick together in good times and in bad and instead leave us, so that we can devaluate the euro; a measure we can't take with Germany in the Union, since then it would only benefit Germany.

But you won't, because the Euro suits German interests very well. If Germany were outside the Eurozone, your German Mark would be a much stronger currency than the Euro, which would be bad for your succesful export. Compared to what the German Mark would be, the Euro, certainly without Germany in the zone, is weak, so you can now hide behind the Euro which benefits your economy at the expense of the rest of Europe.

And in return we give lots of money to everybody else to keep them afloat. Also the notion that Germany wants to deprive small time cypriot savers of their money is wrong as I have demonstrated earlier. The idea actually came from the EU and their elected government.

You can look at it from that angle too, you know.

That's anti-teutonism and you ignore the part where our economy benefits but the people don't because there was more the government ruined back then in addition to the eurozone entry.
Another thing, if it only benefits Germany, why did Greece fake its finances to get in in the first place?

Anyway, I'm not saying Germany should just pay off debts of the poorer southern countries, but robbing the population like that is not the way to go. I don't know how this is sold to the German people, but you undermine the entire European banking system with this measure. You are asking for a run on the banks which will make things much worse for the Cypriotic people. And the Italian, Spanish, Portugese and Greek.

We are not, you still assume we are the (only) driving force behind this move, which is wrong.
Of course the best move would be to let companies that failed fail. However people are afraid that letting banks fail would be the end of society as we know it and think of all the jobs and stuff.

[Fragony]

Why did the EU accept the Greece scamming, better question. Because they knew it was exactly that. I am glad I payed everything off first opertunity I got and a toast on all of who thought the sky was the limit. Feeling very relaxed in my small but stylish comfortable bliss with my two cats.

[InsaneApache]

Another thing, if it only benefits Germany, why did Greece fake its finances to get in in the first place?

Free money.

[Husar]

Free money.

But we're not allowed to blame them because they are our victims?

[InsaneApache]

I didn't say that the Greek government is blameless but are the Greeks? Are the Cypriots?

I'd say the blame squarely lies with those fanatics who want to shoehorn a diverse Europe into a nation state.

[Beskar]

I'd say the blame squarely lies with those fanatics who want to shoehorn a diverse Europe into a nation state.

Because economics 101 is clearly significantly different in 'diverse' cultures.

[Husar]

I didn't say that the Greek government is blameless but are the Greeks? Are the Cypriots?

Did they elect their governments to represent them? Can you say the behaviour of a country's politicians generally reflects the political culture and societal values of a country? If not, why do people elect such politicians to represent them then?

I'd say the blame squarely lies with those fanatics who want to shoehorn a diverse Europe into a nation state.

I'd say the blame squarely lies with those people who continuously block political integration in the EU, which allowed for these huge differences in monetary policy and culture in the first place.

[gaelic cowboy]

I'd say the blame squarely lies with those people who continuously block political integration in the EU, which allowed for these huge differences in monetary policy and culture in the first place.

The blame lies with the original EU politicains back in the 90s thinking you could integrate the money but not the costs, integrate the booms but not the busts, integrate the economy but not banking.

in short they took a political decision without any thought to it's consequences, costs or the requirments to make it REALLY work.

For it to really work you do indeed have to pay for it and that means everyone in the Eurozone pays for a bust bank anywhere that is under it's jurisdiction. Or more simply the ECB just prints till there fixed just like our central banks did before we stupidly half integrated our money.

Were waving voodoo dolls of inflation and we wonder why people are voting for extremes

[Philippus Flavius Homovallumus]

Did they elect their governments to represent them? Can you say the behaviour of a country's politicians generally reflects the political culture and societal values of a country? If not, why do people elect such politicians to represent them then?



I'd say the blame squarely lies with those people who continuously block political integration in the EU, which allowed for these huge differences in monetary policy and culture in the first place.

We're so far past this petty argument, I can't believe you still want to have it.

Fact: Social unrest is rising everywhere.

Fact: EU integration would not pass a Plebicite anywhere.

So stop complaining about who the electorate are not enlightened enough and get to grips with the problem at hand, viz. actually restoring confidence and making the Euro workable.

So break the blooding thing in two already, rather than tying everyone to the D-Mark.

[Brenus]

“Did they elect their governments to represent them? Can you say the behaviour of a country's politicians generally reflects the political culture and societal values of a country? If not, why do people elect such politicians to represent them then?”
Massive abstention is questioning your statement.
Government are not representing the country, but only the small “elite” coming from the same school and network. No, the politicians don’t reflect the culture and value of a country.
And we have no choice in electing them as they have the same background. Helped by massive media campaigns, they brainwash the populations making them believe there is no alternative.

[Greyblades]

For crying out loud brenus learn to use the quote option!

Unrelated: I have no frame of reference outside of the previous set of mooks who caused the current set of problems and the current ones who keep mucking up the recovery, but were there ever any competent governments in anywhere in the world or is this complete lack of competence the norm and our ancestors got lucky enough to not have thier governments cock up on this level?

[Husar]

We're so far past this petty argument, I can't believe you still want to have it.

Fact: Social unrest is rising everywhere.

Fact: EU integration would not pass a Plebicite anywhere.

So stop complaining about who the electorate are not enlightened enough and get to grips with the problem at hand, viz. actually restoring confidence and making the Euro workable.

So break the blooding thing in two already, rather than tying everyone to the D-Mark.

Yes, and the plebiscite also cheered for Total War 70 years ago. As for the problem at hand, that's what I'm talking about instead of the usual "they did it wrong in the 90ies, I blame the europhiles of the 90ies" that I got in return. The problem at hand requires more political integration and that is blocked by the same plebiscite which is complaining about the problem at hand.
I can't make the Euro workable alone, it requires the votes of many so why would I not complain about them being wrong? Or are you suggesting I become emperor of the northern euro zone and institute a new NorthernEuro that excludes the southern countries of the eurozone? That also makes sense only if the plebiscite are not enlightened enough to vote for such an option...

Massive abstention is questioning your statement.
Government are not representing the country, but only the small “elite” coming from the same school and network. No, the politicians don’t reflect the culture and value of a country.
And we have no choice in electing them as they have the same background. Helped by massive media campaigns, they brainwash the populations making them believe there is no alternative.

Massive abstention just says that people have no idea and can't be bothered to think about a solution, how does that reflect positively on them? The Americans, despite their weird two-party system, know that democracy requires some level of active participation to work and that comes from normal people. In our parties the party representatives are all elected to some extent by the party base. So if the parties keep electing people from the same background then it's still the fault of the people from other backgrounds who vote for them to rise in the party ranks in the first place. The pirate party leaders here aren't from that same background as far as I can tell, however people don't dare to vote for them, they rather want someone from "that same background" and keep wondering why nothing really changes. I think it was Einstein who said: "Stupid is who keeps doing the same thing over and over, expecting a different result."

Your idea that the masses are brainwashed and Phillipus' suggestion that I should stop looking at the plebiscite as not enlightened enough don't go well together. What people forget though is that one can form a new party that is different from the established ones, it is then up to the voters whether they want something new or whether they want to stay with what they know and don't like. In the latter case I'll not shut up telling them they're not behaving in a very clever way. I'm in no way saying the pirate party has all the solutions but if the other parties feel there is some competition, they usually start to reconsider their stance.

On that topic we have a funny situation here in Germany where Merkel does whatever is popular with some exceptions, yet she is criticized for not having her own opinion. So people need to decide whether they want politicians who do what the voters want or politicians who do what they think is right regardless of the opinions of the voters. One thing is for sure, you can never make everyone happy, regardless of the politics you choose.

[Sir Moody]

Massive abstention just says that people have no idea and can't be bothered to think about a solution, how does that reflect positively on them? The Americans, despite their weird two-party system, know that democracy requires some level of active participation to work and that comes from normal people. In our parties the party representatives are all elected to some extent by the party base. So if the parties keep electing people from the same background then it's still the fault of the people from other backgrounds who vote for them to rise in the party ranks in the first place. The pirate party leaders here aren't from that same background as far as I can tell, however people don't dare to vote for them, they rather want someone from "that same background" and keep wondering why nothing really changes. I think it was Einstein who said: "Stupid is who keeps doing the same thing over and over, expecting a different result."

Sorry I disagree with this massively - Brenus is on the money here - the current political systems are set up to "rig" the result to a few set parties often populated by the same "type" of person.

Over here that would be private schooled social elites - these make up the bulk of both Labour and the Conservatives and due to our system these are the only parties that truly matter (the only reason the liberals (who incidentally are predominately social elites as well) are currently important is because they are in Coalition). Since both parties benefit from the current political system neither will push forward the radical and sweeping changes we need to "fix" the system so Politics once again represents the people and not just the Social Elites view of the people. Which of course assumes it ever did represent the people - I would argue it NEVER has and has always been a game of the Social Elite and we simply aren't buying their bullsh$t anymore...

On a side note the quote is "Insanity: doing the same thing over and over again and expecting different results."

[gaelic cowboy]

Yes, and the plebiscite also cheered for Total War 70 years ago. As for the problem at hand, that's what I'm talking about instead of the usual "they did it wrong in the 90ies, I blame the europhiles of the 90ies" that I got in return. The problem at hand requires more political integration and that is blocked by the same plebiscite which is complaining about the problem at hand.
I can't make the Euro workable alone, it requires the votes of many so why would I not complain about them being wrong? Or are you suggesting I become emperor of the northern euro zone and institute a new NorthernEuro that excludes the southern countries of the eurozone? That also makes sense only if the plebiscite are not enlightened enough to vote for such an option...


Massive abstention just says that people have no idea and can't be bothered to think about a solution, how does that reflect positively on them? The Americans, despite their weird two-party system, know that democracy requires some level of active participation to work and that comes from normal people. In our parties the party representatives are all elected to some extent by the party base. So if the parties keep electing people from the same background then it's still the fault of the people from other backgrounds who vote for them to rise in the party ranks in the first place. The pirate party leaders here aren't from that same background as far as I can tell, however people don't dare to vote for them, they rather want someone from "that same background" and keep wondering why nothing really changes. I think it was Einstein who said: "Stupid is who keeps doing the same thing over and over, expecting a different result."

Your idea that the masses are brainwashed and Phillipus' suggestion that I should stop looking at the plebiscite as not enlightened enough don't go well together. What people forget though is that one can form a new party that is different from the established ones, it is then up to the voters whether they want something new or whether they want to stay with what they know and don't like. In the latter case I'll not shut up telling them they're not behaving in a very clever way. I'm in no way saying the pirate party has all the solutions but if the other parties feel there is some competition, they usually start to reconsider their stance.

On that topic we have a funny situation here in Germany where Merkel does whatever is popular with some exceptions, yet she is criticized for not having her own opinion. So people need to decide whether they want politicians who do what the voters want or politicians who do what they think is right regardless of the opinions of the voters. One thing is for sure, you can never make everyone happy, regardless of the politics you choose.

Bollocks the ECB doesnt need a state to work with it only needs to act like a central bank (which it doesnt at present) national vetoes dont come into it.

The ECB is interperating it's charter in a very narrow scope because it revels in being most independent central bank in the world. No central bank would have done the things it did the last 4yrs from raising interest rates to threatening to cut off funding to it's own banking system.

there is something rotten at the heart of europe but it aint nationalism (the standard genuflection of europhiles) rather instead it's congenital-elitism of an unelected bureaucratic caste.

No need for asset levy outside of Cyprus - Eurogroup head

THERE will be no need to impose a levy on assets in other euro zone countries along the lines of that Cyprus plans on bank deposits to limit the size of emergency loans it needs, the chairman of euro zone finance ministers said on Tuesday.

Cyprus plans a levy on deposits above €20,000 of 6.75pc and 9.9pc on deposits higher than €100,000, to raise cash for the recapitalisation of its oversized banking sector, hit hard by the Greek sovereign debt restructuring.

Spoiler Alert, click show to read: 

This raised concerns that a similar measure could be used in other euro zone countries, undermining depositors' confidence in banks. But Dutch Finance Minister Jeroen Dijsselbloem, who chairs meetings of euro zone ministers, said it would not happen in other countries.

"It is absolutely out of the question, there is no need for a one-off levy in other countries on assets," Dijsselbloem said in the Dutch parliament.

He reiterated that because of the size of the Cypriot banking sector and its recapitalisation needs, it was inevitable that depositors had to be called on to help.

thankfully saner ideas seem to be coming through on Cyprus anyone under 20000 is exempt

[InsaneApache]

t was inevitable that depositors had to be called on to help.

They're not called on or asked. They were told and effectively mugged. Also that it wont happen in other countries? If you believe that, I have a bridge........etc

[gaelic cowboy]

They're not called on or asked. They were told and effectively mugged. Also that it wont happen in other countries? If you believe that, I have a bridge........etc

Seems like it will happily be defeated in a vote anyway apprently the votes off for now

[Fragony]

Not so pleased the people in Cyprus are with a Flemish ferret who looks like an owl who just dropped from a tree, a German who has been good after the war since 1945 and a Portugese waitor. Time to reconsider things a bit no. Cyprus bank are in trouble because Russia/russiuan maffia took their money back, and that is the truth, the whole truth, and nothing but the truth your honour

[Husar]

Sorry I disagree with this massively - Brenus is on the money here - the current political systems are set up to "rig" the result to a few set parties often populated by the same "type" of person.

How, why and which political systems do you mean? It's not like Britain, the USA, Germany and France for example have the same political system. Unless you're a monarchist trying to tell me democracy is bad. Germany for example has more political movement than the USA, still not as much as I'd like to see, but in some elections the smaller parties get a considerable chunk of the votes and in quite a few cases they can become part of a government coalition. I prefer that a whole lot over a two-party system but please explain how and which systems are rigged as I'm not exactly seeing it here and probably don't have enough insight concerning the system in the UK.
In the US it's a media thing because people are easily swayed by shiny ads, definitely a problem of education and little effort on the part of the voters IMO.

Bollocks the ECB doesnt need a state to work with it only needs to act like a central bank (which it doesnt at present) national vetoes dont come into it.

So you think the states should do whatever they want and the ECB should print as much money as the lowest common denominators need to keep up their spending? The point of political union is to have a somewhat united fiscal policy, I wasn't aware that how much money Greece spends and collects in taxes is somehow the fault of the ECB.

[gaelic cowboy]

So you think the states should do whatever they want and the ECB should print as much money as the lowest common denominators need to keep up their spending? The point of political union is to have a somewhat united fiscal policy, I wasn't aware that how much money Greece spends and collects in taxes is somehow the fault of the ECB.

states can only access money on the bond market or through taxation, any printed ECB money would go to banks not countries.

it still wouldnt be ideal but it's better than fooling yourself into thinking people will be fine paying the unemployment benefits of millions other europeans not in there own polity in a fiscal union.

No fiscal union anywhere has the kind of united fiscal policy your talking or thinking of, they do often however have a united treasury. (which is not the same thing)


were 4-5years in here and were still talking about greeks spending which is a joke, it is a tiny economy the problem was banks liabilities outside greece owed by greece. Greeks do the sensible thing and not pay and suddenly the whole credit system would collapse, because of the refusal of the ECB to lend to eurozone banks to protect them. This was a complete banking failure whereby the ECB never gave as much as a peep about countries selling bonds to EU banks.

All that happened was that exchange rate risk was exchanged for sovereign risk (but sovereign risk was ignored as there was no exchange rate risk)

that was a monumental up and only the ECB had the tools and data to potentially see an prevent it coming. They didnt and instead they allowed a potential banking system collapse in country after country (cos inflation is gonna eat my baby or summit)

[gaelic cowboy]

Cyprus parliament rejects deposit tax for bailout

19 MARCH 2013

CYPRIOT lawmakers overwhelmingly rejected a deeply unpopular tax on bank deposit this evening, throwing into doubt an international bailout for the troubled euro zone member needed to avert default and a banking collapse.

The 56-seat parliament voted by 36 votes against and 19 abstentions to bury the bill, a condition of a €10bn European Union bailout for the Mediterranean island. One deputy was absent.

not a single vote in favour apparently

[InsaneApache]

Well if they want to get re-elected I'm not surprised. I wonder who thought up this wonder levy idea? My monies on UKIP.

[gaelic cowboy]

Cyprus furore is rocky start for new Dutch "Mr Euro"

For Jeroen Dijsselbloem, the new face of the euro zone, a furore over a decision to hurt savers in Cyprus has been a baptism of fire in his role as chairman of the Eurogroup of finance ministers of the currency area.

Spoiler Alert, click show to read: 

After just his third meeting in the job, the Dutch minister faces accusations of failing to anticipate the wrath that a confiscatory levy on small savers would spark, risking a rejection by the Cypriot parliament that could plunge the euro zone back into crisis. Dijsselbloem and ECB executive board member Joerg Asmussen barely mentioned the levy on all bank accounts when they announced an EU bailout deal for Cyprus at 4 a.m. on Saturday, growing irritated when journalists pressed them on the issue.

Insiders who attended the talks said German Finance Minister Wolfgang Schaeuble and Asmussen, a fellow German, had called the shots while the 46-year-old chairman, a minister for just four months, was too inexperienced to carry much weight.

"There is a realisation, a frustration, that countries outside the troika (European Commission, European Central Bank and International Monetary Fund) and Germany are becoming bystanders in these crucial Eurogroups, and Dijsselbloem is just going along with that, cementing that reality," said one diplomat from a small euro zone country.

Dijsselbloem's predecessor, veteran Luxembourg Prime Minister Jean-Claude Juncker, who relinquished the role in January after more than eight years, made clear his disapproval in an interview with an Austrian newspaper.

"It was the first time I wasn't in the Eurogroup. I would have wished for a more gentle approach to small savers," he told Der Standard daily.

JUNCKER'S WILES

Some euro zone officials, speaking on condition of anonymity, said the wily Juncker, a walking encyclopaedia of European integration who had participated in every EU financial decision since the 1991 Maastricht summit that created monetary union, would have sensed the danger.

"If he were still chairman, he would not have allowed this kind of anti-European integration rhetoric that we are hearing now," one official with close knowledge of the Eurogroup said.

The chain-smoking Juncker could be erratic and cantankerous in chairing late-night ministerial meetings, but his political lightning-detector was finely tuned and he was more willing to stand up to the EU's German paymasters, another said.

Many Cypriots blamed Germany and the European Central Bank for coercing Nicosia to impose a one-off tax on even small savings, triggering fury in Cyprus and raising uncertainty for savers in other troubled European countries.

Officials from Berlin and the ECB countered that they had never specified how a 5.8 billion euro ($7.52 billion) Cypriot contribution to the cost of bailing out the island should be divided up among depositors.

Cypriot President Nicos Anastasiades had forced the decision to put a levy on all bank accounts by insisting the hit on the biggest holders must not exceed 10 percent, they said.

The move has raised doubts among savers across the euro zone about the value of an EU-wide government guarantee on bank deposits of up to 100,000 euros, enacted after the 2008 global financial crisis.

The European Commission said the guarantee applied only if a bank collapsed and did not protect savers from fiscal measures decided by parliaments. Dijsselbloem sought to reassure depositors elsewhere that there was no need for a one-off levy on assets in other countries.

Determined to minimise the cost of bailing out Cyprus to German taxpayers in an election year, Schaeuble said depositors in Cyprus had only themselves to blame.

"Whoever deposits their money in a country because it will be taxed less and controlled less runs a risks when the banks in these countries are no longer solvent," he said on Tuesday.

"That is what happened in Iceland and in Ireland some years ago. European taxpayers should not be made responsible for this risk."

UNORTHODOX INVITATION

For Dijsselbloem, the trouble began with the unorthodox way he called Friday evening's meeting.

Schaeuble made clear his irritation at learning of the summons via Twitter at a time when it was not clear whether a majority could be found for any Cyprus deal.

"I'm an old-fashioned person. I have not yet received an invitation and I was in parliament, so I wasn't looking on Twitter, which I don't do on other occasions either," he said.

Another euro zone official said Dijsselbloem had made a good start and was better organised than Juncker, but shortcomings in the preparation of the Cyprus meeting had irked some ministers. The troika's report was only circulated a few hours before the meeting and there were no options and alternatives drafted.

"Of course, he lacks respect, direct and confidential private ties with key leaders that Juncker had. But he can catch up with this in time," said the official, who like others requested anonymity because he is not authorised to speak in public.

When protests erupted in Cyprus, savers stormed cash machines to withdraw their money and the Cypriot parliament put off a vote on the bailout, Dijsselbloem called another Eurogroup meeting by teleconference on Monday to row back on applying the levy to small deposits.

In a statement, he said ministers hoped the levy would not be applied to accounts under 100,000 euros, and the money would be raised instead from a higher rate applied to larger accounts.

"Even though all the ministers now insist they did, nobody fought for the small depositors on Friday night," said a person who participated in the Eurogroup conference call.

The change of heart may have come too late to save the Cyprus rescue package, which Anastasiades said on Monday a majority in parliament was likely to reject.

If that happens, Dijsselbloem may find himself presiding over a full-blow return of the euro zone's sovereign debt crisis that will sorely test his political skills.

According to reuters it was Wolfgang Schäuble and Jörg Asmussen probably due to upcoming elections in Germany


Former Cyprus central banker Orphanides on Cyprus Bailout, Europe's Banks Bloomberg

never heard of this fella before but he pretty much nails it

[Philippus Flavius Homovallumus]

Yes, and the plebiscite also cheered for Total War 70 years ago. As for the problem at hand, that's what I'm talking about instead of the usual "they did it wrong in the 90ies, I blame the europhiles of the 90ies" that I got in return. The problem at hand requires more political integration and that is blocked by the same plebiscite which is complaining about the problem at hand.
I can't make the Euro workable alone, it requires the votes of many so why would I not complain about them being wrong? Or are you suggesting I become emperor of the northern euro zone and institute a new NorthernEuro that excludes the southern countries of the eurozone? That also makes sense only if the plebiscite are not enlightened enough to vote for such an option...

Ah yes, the Germans don't believe in democracy because it elected Hitler.

Oddly, neither did Hitler.

Yes, Germany should leave the Euro - Germany's economy is not compatible with the majority of the block. Once Germany leaves the other countries in the Eurozone will become more competetive, and the D-Mark is not even projected to rise in value that much, which shows the influence you have.