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Saturday, March 16, 2013

Brussels officials dispute over Cyprus's financial future

German policymakers have outlawed use of the European Stability Mechanism in rescuing Cyprus, fearing the country will remain unable to repay debts.

Officials in Brussels have wrangled over a rescue plan for Cyprus since it became obvious the island government had few resources of its own to meet debt repayments.

With debts almost equal to its annual national income of €17bn and few taxpayers to tap for funds after years as a tax haven, a plan was hatched to tax bank deposits to generate some €5bn alongside €10bn in loans on offer from the troika and a possible €2bn loan from Russia.

Inside the eurozone, Cyprus has become one of the most leveraged countries in the world. Its banking system has assets equivalent to eight times the country's gross domestic product (GDP), much of it in the form of loans linked to Russian oligarchs.

Some policymakers wanted to involve the European Stability Mechanism, which has provided loans to Ireland, Portugal and Greece. But the German outlawed this route, arguing that it would repeat the same mistake made during the rescue of Greece, which involved throwing money at a situation with little hope of ever being repaid.

Ireland forced second ranking bank bondholders to take some of the hit following its rescue by Brussels. Spain and the Netherlands have also punished bondholders rather than spend only taxpayer money rescuing their banks. However, Cyprus banks issued only small amounts of subordinated debts, leaving depositors to take the strain.

Berlin, which is still pressing for a banking union to support future bailouts, wanted Cypriots to make a cash contribution rather than place all the emphasis on loans to be paid back years later.


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PM, Abbott brave rain for Greek festival


PM, Abbott brave rain for Greek festival
Ninemsn
Under umbrellas and coats, Prime Minister Julia Gillard and Opposition Leader Tony Abbott walked along the city's Greek precinct on Lonsdale Street on Saturday, the first night of the Antipodes Festival. Ms Gillard said Greek Australians had changed ...


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Giannena beat Aris 2-0 in Greek league


Giannena beat Aris 2-0 in Greek league
The Advocate
ATHENS, Greece (AP) — Branca Ilic scored in the first half and Nikos Korovessis added another goal in the second to give Giannena a 2-0 victory over visiting Aris in the Greek league on Saturday. The victory allowed Giannena to provisionally reclaim ...

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Greece seeks buyers for local units of Cypriot banks


Kathimerini

Greece seeks buyers for local units of Cypriot banks
Reuters
Cyprus's two top lenders with a presence in Greece are Bank of Cyprus and Popular Bank. Greek operations accounted for more than a quarter of total group operating income at Bank of Cyprus and 10 percent at Popular, according to nine-month 2012 results ...
Cyprus Bank Rescue Won't Add to Greece Debt Burden - Greek FinMinWall Street Journal
Cypriot bank branches in Greece not affected by depositor tax but likely to be ...Kathimerini
Bailout Cuts Cyprus Bank Accounts, Withdrawals BarredGreek Reporter
Famagusta Gazette -GlobalPost
all 310 news articles »

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Armenian, Greek FMs sign memorandum of cooperation


PanARMENIAN.Net

Armenian, Greek FMs sign memorandum of cooperation
PanARMENIAN.Net
Minister Nalbandian further met with his Greek counterpart Dimitris Avramopoulos, with political dialogue, bilateral cooperation, activities of the intergovernmental committees, as well as prospects of expanding relations in the tourism sector, fields ...
Greek President to visit ArmeniaPublic Radio of Armenia
Armenian Foreign Minister Edward Nalbandian met with President of Greece ...Aysor

all 9 news articles »

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Greece's hidden riches


Greece's hidden riches
Aljazeera.com
And the US Geological Society estimates there are around 22 billion barrels of oil in the Ionian Sea, off western Greece, and another 4 billion barrels in the northern Aegean Sea. Turkey also has oil and gas in the area - its total reserves are ...

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UPDATE 1-Greece seeks buyers for local units of Cypriot banks


UPDATE 1-Greece seeks buyers for local units of Cypriot banks
Reuters
Cyprus's two top lenders with a presence in Greece are Bank of Cyprus and Popular Bank. Greek operations accounted for more than a quarter of total group operating income at Bank of Cyprus and 10 percent at Popular, according to nine-month 2012 results ...


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LOOK: Nervous Depositors Rush To Get Money Out Of Bank Before Huge Tax Increase

NICOSIA, Cyprus — Cyprus' president said Saturday that the decision to force bank depositors to share the burden of a (EURO)10 billion ($13 billion) bailout...

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Cyprus: panic as savings levy is imposed

Cypriots rush to ATMs before savings are docked as part of a bailout deal agreed in Brussels

Cypriots reacted with shock that turned to panic on Saturday after a 10% one-off levy on savings was forced on them as part of an extraordinary 10bn euro (£8.7bn) bailout agreed in Brussels.

People rushed to banks and queued at cash machines that refused to release cash as resentment quickly set in. The savers, half of whom are thought to be non-resident Russians, will raise almost €6bn thanks to a deal reached by European partners and the International Monetary Fund (IMF). It is the first time a bailout has included such a measure and Cyprus is the fifth country after Greece, the Republic of Ireland, Portugal and Spain to turn to the eurozone for financial help during the region's debt crisis. The move in the eurozone's third smallest economy could have repercussions for financially overstretched bigger economies such as Spain and Italy.

People with less than 100,000 euros in their accounts will have to pay a one-time tax of 6.75%, Eurozone officials said, while those with greater sums will lose 9.9%. Without a rescue, president Nicos Anastasiades said Cyprus would default and threaten to unravel investor confidence in the eurozone. The Cypriot leader, who was elected last month on a promise to tackle the country's debt crisis, will make a statement to the nation on Sunday.

The prospect of savings being so savagely docked sparked terror among the island's resident British community. At the Anglican Church's weekly Saturday thrift shop gathering in Nicosia, Cyprus's war-divided capital, ex-pats expressed alarm with many saying that they had also rushed to ATMs to withdraw money from their accounts. "There's a run on banks. A lot of us are really panicking. The big fear is that there soon won't be cash in ATMs," said Arlene Skillett, a resident in Nicosia. "People are worried that they're automatically going to lose ten present [of their savings] in deposit accounts. Anastasiades won elections saying he wouldn't allow this to happen."

She said a lot of elderly Britons had transferred savings to the island when they had decided to retire there. "Nobody can understand how they can do this – isn't it illegal? How can they just dock money from your account?" she asked.

In the coastal town of Larnaca, Cypriots described how they had queued from the early hours in the hope of withdrawing deposits from banks. "A lot of us just can't believe it," said Alexandra Christofi, a divorcee in her 40s who said she had rushed to her bank before doors even opened at 6am. "I had put my money there for a rainy day. It's absolutely all I have and I cannot understand how Cyprus is being singled out. Other EU countries got bailouts and we're only in this position because we supported Greece," she said, referring to the massive losses the Cypriot banking system suffered as a result of Greece's restructuring its debt last year. "Where is the fairness in that? Where is the solidarity and support that is meant to be the reason why we are all unified in this common currency in the first place?"

Maria Zembyla, from Nicosia, said the levy would make a "big dent" in her family's savings and "erode the investor confidence". "It is robbery. People like us have been working for years, saving to pay for our children's studies and pensions and suddenly they steal a big share of this money. Russians that currently keep the economy afloat will leave the country along with their money," she added.

Howard Skelton, in Limassol, said: "The only people who will benefit in the long term are the banks. It will be many years before the man in the street begins to feel any benefit from this bailout. The sooner I can return to the UK the better."

The levy does not take effect until Tuesday, following a public holiday, but action is being taken to control electronic money transfers over the weekend. Co-operative banks, the only ones open in Cyprus on a Saturday, closed following a run on the credit societies while ATMs cancelled transactions due to "technical issues".

"I wish I was not the minister to do this," Cypriot finance minister Michael Sarris said after Friday's late-night talks in Brussels. "Much more money could have been lost in a bankruptcy of the banking system or indeed of the country."

Depositors started queuing early to withdraw their cash, and protestors gathered outside the presidential palace. "I'm extremely angry. I worked years and years to get it together and now I am losing it on the say-so of the Dutch and the Germans," said British-Cypriot Andy Georgiou, 54, who returned to Cyprus in mid-2012 with his savings.

"They call Sicily the island of the mafia. It's not Sicily, it's Cyprus. This is theft, pure and simple," said a pensioner.

IMF managing director Christine Lagarde, who attended the meeting, said she backed the deal and would ask her board in Washington to contribute to the bailout. "We believe the proposal is sustainable for the Cyprus economy," she said, "The IMF is considering proposing a contribution to the financing of the package. The exact amount is not yet specified."


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Airline bomber set to be released from prison

FILE - In this December 12, 1991, file photo Mohammed Rashed, center, convicted of the 1982 PanAm jetliner bombing, listens to his unidentified PLO interpreter, left, during his appeals court hearing in Athens, Greece. Rashed tucked a bomb beneath his jetliner seat cushion, set the timer and disembarked with his wife and child when the flight touched down in Tokyo. The device exploded as the jet continued on to Honolulu, killing a Japanese teenager in an attack that investigators linked to a terrorist organization known for making sophisticated bombs. It would be 20 years before Rashed, one-time apprentice to Abu Ibrahim, currently featured on the FBI list of most wanted terrorists, would admit guilt in an American courtroom. Now, credited for his cooperation against associates, Rashed is about to be freed from federal prison after more than two decades behind bars in Greece and the United States. (AP Photo/Aris Saris, File)Mohammed Rashed slipped a bomb beneath the seat cushion, set the timer and disembarked with his wife and child when the plane landed in Tokyo. The device exploded as Pan Am Flight 830 continued on to Honolulu.



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Cypriots' president defends bailout deal





NICOSIA, Cyprus (AP) — Cyprus' president said Saturday that the decision to force bank depositors to share the burden of a €10 billion ($13 billion) bailout package from its European partners and the International Monetary Fund was done to save his country from financial ruin.

The president said the deposit levy rescues banks, keeps the country's debt load manageable, and avoids the risk of deeper pay cuts and tax hikes.

News of the levy stunned the public because Anastasiades and his top ministers had vehemently rejected any suggestions of going after deposits to save Cyprus' banks that lost billions on bad Greek debt.

"The Cypriot banking sector will be significantly reduced to a sustainable level and business model," he said.

The Cypriot bailout still needs parliamentary approval by euro area countries, and Schaeuble said it will be brought before the German parliament in the second half of April.

Because of this, Cyprus' situation and this agreement are not transferrable to any other country in the eurozone.


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And The Country That Hates America Most Is...

From 24/7 Wall St.:Disapproval of U.S. leadership had no statistical improvement last year, according to the latest U.S.-Global Leadership Project, a partnership between Meridian International...

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Cyprus' savers bear brunt of unprecedented bailout

EU and Cypriot flags flutter atop the Presidential palace in NicosiaBy Annika Breidthardt and Robin Emmott and Michele Kambas BRUSSELS (Reuters) - The euro zone struck a deal on Saturday to hand Cyprus a bailout worth 10 billion euros ($13 billion), but demanded depositors in its banks forfeit some money to stave off bankruptcy despite the risks of a wider run on savings. The eastern Mediterranean island becomes the fifth country after Greece, Ireland, Portugal and Spain to turn to the euro zone for financial help during the region's debt crisis. ...



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Thessaloniki Jews mark WWII Nazi deportation





THESSALONIKI, Greece (AP) — Jewish residents of this northern Greek city gathered Saturday to commemorate the 70th anniversary of the roundup and deportation of this city's Jews to Nazi extermination camps in World War II.

Several hundred people gathered at the city's Eleftherias (Freedom) Square, where the first batch of Jews were rounded up by the occupying German forces on March 15, 1943.

The crowd held a moment of silence and then marched to the city's old railway station, where the first trains departed for the Auschwitz-Birkenau concentration camp complex.

[...] some people look upon this era nostalgically and are bringing back the old Nazi symbols, said David Saltiel, leader of the city's Jewish community.


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Thessaloniki Jews mark WWII Nazi deportation

THESSALONIKI, Greece (AP) — Jewish residents of this northern Greek city gathered Saturday to commemorate the 70th anniversary of the roundup and deportation of this city's Jews to Nazi extermination camps in World War II.

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A look at Cyprus' decision to tax depositors





PARIS (AP) — Cyprus' eurozone partners and the IMF agreed early Saturday to bail out Cyprus to the tune of €10 billion ($13 billion) — largely to prop up its flailing banking industry.

[...] it's meant to hold off a bank collapse.

Just ask the residents of Greece, Portugal and Ireland — all bailout recipients — who saw their tax bills skyrocket as those countries tried to reduce their debts.

Bank customers still can draw on the rest of their funds via ATM machines this weekend, and nervous depositors did that on Saturday to drain their accounts.

When the crisis hit there in 2008, Iceland protected its domestic deposits but reneged on deposit insurance for overseas, Internet-based accounts held by British and Dutch.

Cyprus could have only gone after non-EU depositors, but it may have been hard to distinguish between Cypriot and Russian savers, Jacob Kirkegaard said, since many Russians have dual citizenship and many Russian businesses are registered on the island.

Kirkegaard, who is a senior fellow at the Peterson Institute for International Economics in Washington, said Cypriots may paradoxically welcome this measure since the government just managed to widen its tax base to include a lot of Russians; the taxes levied in Greece, Portugal and Ireland were for residents alone to shoulder.

Bank stocks will probably fall and they'll see their borrowing costs rise since this deal is a signal that other eurozone countries may call on bondholders, if their banks run into trouble.

[...] Heather Conley, director of Europe program for the Center for Strategic and International Studies, says it's hard to know the far-reaching implications of this one-off deal.


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Cypriot banks to transfer Greek units to Greek owners: sources


Cypriot banks to transfer Greek units to Greek owners: sources
Reuters
The units of Cypriot banks in Greece, which account for about a tenth of Greece's banking market, were specifically excluded from the levy after a deal to transfer them to Greek lenders, one senior banking source and one senior finance ministry ...
Cyprus Banks to Transfer Greek OperationsWall Street Journal

all 1 news articles »

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Greek Jews commemorate Auschwitz deportation anniversary


Raw Story

Greek Jews commemorate Auschwitz deportation anniversary
Raw Story
Greece's second largest city Thessaloniki on Saturday commemorated the 70th anniversary of the first deportation of its Jews to the Auschwitz concentration camp. Around one thousand people walked in a silent march to the old railway station where the ...
Greek Jews commemorate 70th anniversary of Auschwitz deportationGlobalPost
Thessaloniki Jews Commemorate Deportation by NazisGreek Reporter
Thessaloniki Jews commemorate HolocaustThe Advocate

all 5 news articles »

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CORRECTED-Cypriot banks to transfer Greek units to Greek owners


Hurriyet Daily News

CORRECTED-Cypriot banks to transfer Greek units to Greek owners - sources
Reuters
(Corrects share of Greek operations as total of Popular Bank, 8th paragraph). ATHENS, March 16 (Reuters) - Cypriot banks will transfer their Greek units to Greek owners as part of the island's international bailout agreed earlier on Saturday, two ...
Greek Cyprus bailout looms over EU summitHurriyet Daily News
Bailout Cuts Cyprus Bank Accounts, Withdrawals BarredGreek Reporter
Cypriot bank deposits tapped as part of €10bn eurozone bailoutFinancial Times
GlobalPost -Channel 4 News (blog) -BBC News
all 257 news articles »

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Cypriot bank branches in Greece not affected by depositor tax but likely to be ...


Kathimerini

Cypriot bank branches in Greece not affected by depositor tax but likely to be ...
Kathimerini
Greeks who have deposits in local branches of Cypriot banks have been assured by the Finance Ministry that that their money will not be taxed after the Eurogroup decided that savings in Cyprus should face a one-off levy as part of the country's bailout.
Cypriot banks in Greece not affected by rescue deal: ministryGlobalPost
Bailout Cuts Cyprus Bank Accounts, Withdrawals BarredGreek Reporter
Luxembourg PM: Cyprus Solution Won't Be Same as Greece'sWall Street Journal
Reuters -gulfnews.com -This is Money
all 257 news articles »

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Cypriots rue bailout deal's bank deposit levy





Lines formed at many ATMs as people scrambled to pull their money out after word that the €10 billion ($13 billion) rescue package Cyprus agreed with its euro area partners and the International Monetary Fund included one-off levy on deposit, an unprecedented step in the eurozone crisis.

"Politicians and senior bank bosses have covered each other's backs for years, now it's ordinary people who are paying the price and are being punished," said Christos Demetriades, 58, milling outside a shut Nicosia cooperative bank branch.

Cypriot and European officials feared that forcing depositors take a hit would undermine investors' confidence in Cyprus and other weaker eurozone economies and even possibly lead to bank runs.

Cyprus has become the fourth euro area country to get a rescue package to save its banks that took massive losses because of their exposure to toxic Greek debt.


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Greece will use Rehhagel to boost public opinion of Germany


Victoria Times Colonist

Greece will use Rehhagel to boost public opinion of Germany
SI.com
ATHENS, Greece (AP) -- He pulled off one of soccer's greatest historic upsets. Now Otto Rehhagel has been handed a task equally challenging: to make Germany popular again in crisis-hit Greece. Germany is widely seen here as the country pressing hardest ...
Germany picks coach Rehhagel as motivator-in-chief for recession-hit GreeceVictoria Times Colonist
Rehhagel picked to make Germany popular in GreeceNews 12 New Jersey

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Cypriot banks in Greece not affected by rescue deal: ministry


Cypriot banks in Greece not affected by rescue deal: ministry
GlobalPost
Athens on Saturday reassured account holders that branches of Cypriot banks in Greece would not be subject to a hefty levy on bank deposits included in a 10 billion-euro ($13 billion) Cyprus bailout deal. "Deposits in branches of Cypriot banks in ...


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Thessaloniki Jews commemorate Holocaust




THESSALONIKI, Greece (AP) — Jewish residents in this northern Greek city have gathered to commemorate the 70th anniversary from the first roundup and deportation of Jews to Nazi extermination camps in World War II.

The crowd held a moment of silence and then marched to the city's old railway station, where the first trains departed for the Auschwitz-Birkenau concentration camp complex.


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Jews in the city of Thessaloniki commemorate 70th anniversary of roundup by Nazis

THESSALONIKI, Greece - Jewish residents in this northern Greek city have gathered to commemorate the 70th anniversary from the first roundup and deportation of Jews to Nazi extermination camps in World War II.

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