Wednesday, February 5, 2014
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Cyprus The bailout deal
Cyprus The bailout deal
After much media propaganda, that the Cypriot president Anastasiades was fighting hard and was even going to quit if the troika didnt back down in the negotiations, he ultimately accepted everything and betrayed his people - as expected. Interestingly, the deal he made was such that it will not require a parliamentary approvement.
There will not only be a haircut in peoples deposits (as they say for those over 100.000 euros), but also their money will be locked into the system without being able to withdraw serious amount of money. The banks got bailed out, the bankers seem O.K. (instead of being on trial) and the people are in for a shock of epic proportions.
Yet, these are just side effects compared to the total destruction of Cypriot economy, which should go back to the Cypriot currency in order to recover. There is no other viable way in the short and mid-term, at least before the gas/oil fields are exploited.
In the short run, well see how the bank run unfolds in the next days and how the banks will cope, or what kind of restrictions will be imposed.
There will not only be a haircut in peoples deposits (as they say for those over 100.000 euros), but also their money will be locked into the system without being able to withdraw serious amount of money. The banks got bailed out, the bankers seem O.K. (instead of being on trial) and the people are in for a shock of epic proportions.
Yet, these are just side effects compared to the total destruction of Cypriot economy, which should go back to the Cypriot currency in order to recover. There is no other viable way in the short and mid-term, at least before the gas/oil fields are exploited.
In the short run, well see how the bank run unfolds in the next days and how the banks will cope, or what kind of restrictions will be imposed.