Crunch time in Cyprus

Cyprus has until Monday to figure out a way to raise the $5.8 billion they’ll need in exchange for the $10 billion bailout package the EU and IMF has put on the table to save their flailing banks and guard against a sudden exit from the eurozone — and although the legislature rejected the idea of imposing a one-off ‘tax’ on deposits earlier this week because of the vociferous public outcry, the bottom fell out of their Russian Plan B and they’re getting seriously desperate. Via Reuters:

Advertisement

Cyprus said on Saturday it would tax big savers at its largest bank in a dramatic U-turn as it raced to satisfy European partners and seal an 11th-hour bailout deal to avert financial collapse. …

His counterparts in Europe’s 17-nation currency union scheduled talks in Brussels for Sunday evening to see if the numbers add up, taking the crisis down to the wire. …

Government officials held talks through the day at the finance ministry with Cyprus’s ‘troika’ of lenders – the EU, ECB and IMF. Angry demonstrators outside chanted “resign, resign!” …

Rebuffed by the Kremlin, Sarris said on Saturday talks with the troika were centered on a possibly levy of around 25 percent on savings over and above 100,000 euros at failing No. 1 lender Bank of Cyprus. …

Racing to placate its European partners, Cypriot lawmakers voted in late-night session on Friday to nationalize state pensions and split failing lenders into good and bad banks – a measure likely to be applied to No.2 lender Cyprus Popular Bank, also known as Laiki.

Advertisement

Oof. Germany probably isn’t going to go for that nationalizing-pensions plan, and I’d wager that Cypriots probably have something to say about it, too. That’s the pesky thing about debt crises, though: They reliably do not end well, for anybody. They’re going to have to pay for this somehow, and one way or another, it’s going to hurt. Take heed, planet Earth.

Join the conversation as a VIP Member

Trending on HotAir Videos

Advertisement
Advertisement
Advertisement
Advertisement