– Eurogroup Folds: Tells Cyprus To “Safeguard” Depositors Under €100,000 Euros; Angry Russians To Get Even Angrier (ZeroHedge, March 18, 2013):
Reuters headlines crossing the closing tape, supposedly out of a (very credible) Greek source, according to whom the Eurogroup will give Cyprus more flexibility on bank levy, and that Cyprus should safeguard depositors under €100,000. Well, at least they were not kidding with the whole plan. This was not unexpected – as we tweeted last night:
Quite possible that before morning Cyprus will be giving free money to those with under EUR100,000 in deposits
— zerohedge (@zerohedge) March 17, 2013
And while after all this, it is perfectly obvious that ordinary Cypriots just can’t wait to start depositing money again with their local friendly bank, there are two very key questions which remain woefully unanswered:
i) how will Europe restore the confidence it has lost by even contemplating insured deposit impairments, and
ii) a deposit haircut is still a deposit haircut, and as noted earlier, the majority of Cypriot parties have announced they would vote against any bank levy, not just that which is determined to be “fair” by 10 European bureaucrats, and supposedly only hurts those evil, evil Russian billionaires.
In other words, the final word still remains with the Cypriot parties. Let the horse trading begin.
Finally, the Russian response to the discovery that haircuts on big deposits just rose from 9.9% to over 15.6% will hardly be warm and cuddly. Now may be a good time to ban gun (and plutonium) sales to angry Russian billionaire oligarchs.
P.S. All of this coming from a Greek finance minister source (speaking on behalf of Europe) means it is all 100% accurate, credible and true. We can’t wait for the refutation.