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View Diary: BREAKING NEWS: Parliament of Cyprus Rejects "Bailout," Bank "Haircut" (143 comments)

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  •  Very bizarre situation here. (2+ / 0-)
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    DRo, marsanges

    This all unraveled extraordinarily quickly but I've seen some hints in the press that the powers-that-be in the EU and IMF wanted a more progressive structure but that perhaps the Cypriots wanted it this way.

    The managing director of the International Monetary Fund, Christine Lagarde, said earlier Tuesday that she was in favor of modifying the agreement to put a lower burden on ordinary depositors. “We are extremely supportive of the Cypriot intentions to introduce more progressive rates,” she said in Frankfurt.
    That's pretty strong language.  I know that it's de rigueur to hate on the IMF here but strangely, the IMF seems to be on the right side of this issue.  So if they wanted more progressive rates, how did we end up here?  Did the Cypriots want the tax to include deposits below €100,000 in order to limit their losses and protect foreign depositors, have Cypriot citizens take some of the hit in order to cushion the blow to Russian and Middle Eastern depositors and not have a total exodus of foreign currency?  Or is this a poison pill, did the Prime Minister want a deal that Parliament would reject in order to get a far better deal?

    "The first drawback of anger is that it destroys your inner peace; the second is that it distorts your view of reality. If you come to understand that anger is really unhelpful, you can begin to distance yourself from anger." - The Dalai Lama

    by auron renouille on Tue Mar 19, 2013 at 03:09:24 PM PDT

    •  Who are the "Cypriots"? (2+ / 0-)
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      3goldens, JesseCW

      The president may have wanted it that way, but clearly not the people of Cyprus, and clearly not most of the members of parliament.

      •  To save on verbiage, I meant the government's (2+ / 0-)
        Recommended by:
        Gary J, Aquarius40

        negotiators.

        In a parliamentary system, having a bill rejected is extraordinarily rare - there are no checks on the government because the government is by definition the lower house's majority party.  Imagine a system where we had only a figurehead president, a Senate with no real powers, and where the Speaker of the House of Representatives was the head of the government.  Since the Speaker is chosen by the majority, the vast majority of bills will pass.  Only when the backbenchers revolt do bills not pass, and that's quite rare - the majority party in a parliamentary system wields enormous power and can end the backbenchers' careers.

        "The first drawback of anger is that it destroys your inner peace; the second is that it distorts your view of reality. If you come to understand that anger is really unhelpful, you can begin to distance yourself from anger." - The Dalai Lama

        by auron renouille on Tue Mar 19, 2013 at 03:30:35 PM PDT

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        •  Cyprus has an executive President (4+ / 0-)
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          auron renouille, AoT, JesseCW, mrkvica

          What you say is true of Parliamentary systems, when there is a stable majority. However Cyprus does not have such a system. It chose, when it became independent from the United Kingdom, not to have a Westminster style government.

          There is no man alive who is sufficiently good to rule the life of the man next door to him. Sir Rhys Hopkin Morris, M.P.

          by Gary J on Tue Mar 19, 2013 at 04:48:54 PM PDT

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          •  Thank you, I stand corrected :). *blush (0+ / 0-)

            "The first drawback of anger is that it destroys your inner peace; the second is that it distorts your view of reality. If you come to understand that anger is really unhelpful, you can begin to distance yourself from anger." - The Dalai Lama

            by auron renouille on Tue Mar 19, 2013 at 04:51:36 PM PDT

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    •  that was my idea too (0+ / 0-)

      that that was a poison pill thing. That someone wanted this to go down.

      Currently, the Cypriots (govt) blame Schaeuble (German FM) and Schaeuble blames the Cypriot govt.

      It is a possible hypothesis - that Cyprus govt, which above all doesnt want to cross its business partners, and having vainly fought against depositor taxation, then made it so that it was sinkable.

      possible, not proven. Counterhypotheis putting blame on German govt says that they wanted the culprits (vagabund capital) to pay too. Thats also plausible, but the german govt has no bone to pick with small-depositor cypriots, they were pushing for getting at the big fish, not small fish.

      So far ... its personal preference what to believe ...

    •  I get a warm, fuzzy feeling inside (2+ / 0-)
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      neo11, JesseCW

      When I read that statement of altruistic sentiment from the IMF. But, it could be that Legarde was just spouting some bullshit for the press. It's Cypriot banks that are failing. The IMF wants Cyprus to prop up the banks — to have Cyprus cover their losses.

      I say they're more concerned about Bundesbank's exposure to Cyprus bank bonds and derivatives that concerns them more than they are for the well-being of the little people citizens of Cypress.

      "Societies strain harder and harder to sustain the decadent opulence of the ruling class, even as it destroys the foundations of productivity and wealth." — Chris Hedges

      by Crider on Tue Mar 19, 2013 at 04:23:37 PM PDT

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      •  The IMF is a force for evil. (1+ / 0-)
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        neo11

        income gains to the top 1% from 2009 to 2011 were 121% of all income increases. How did that happen? Incomes to the bottom 99% fell by 0.4%

        by JesseCW on Tue Mar 19, 2013 at 06:24:13 PM PDT

        [ Parent ]

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