First some qualifiers: I think the Cypriot banks are an analog to Cayman banks in that they exist, not at the will or benefit of the native citizens, but at the behest of fat-cat overseas oligarchs and criminals who wanted to stash money, tax and oversight free with the protection of well-larded local politicians. Think Mitt Romney, think AHERF, think any stinking 'Merican tax-evading crook.
Another qualifier: I am linking a Russian news source, not because I respect their professional ethics but because they are far more plugged into this story than US or even EU bureaus. Like, if the Caymans were like affected thusly, would you not expect USA news outlets to be a tad interested? Da!
Last qualifier: This shit is shifting faster than quicksand so don't grill me if I get a detail slightly wrong. We won't know the real shiznit until the banks on Cyprus open Tuesday.
UPDATE: Hattip to commenter WisePiper (who clarifies that he is not making a statement Pro or Con) :
A Cypriot who's managed to save 100,100 Euro would be taxed 30 Euro, not 1/3 of their life savings.
So
Joe Nicosia with an awesome bank account isn't getting nicked a dime on his first 100K euro.
Here's the lede:
BRUSSELS, March 25 (RIA Novosti) - The finance ministers of the 17-nation eurozone agreed in the early hours of Monday on a 10 billion euros bailout deal for Cyprus to prevent the country’s banking system from collapsing and bankruptcy.
The president of the Eurogroup of eurozone finance ministers, Jeroen Dijsselbloem, told a press conference in Brussels, that the plan to recapitalize Cypriot ailing lenders and keep the government afloat was supported unanimously by all finance ministers and the so-called troika of creditors: the International Monetary Fund, the European Commission and the ECB.
Under the plan, the country’s second largest bank, Laiki Bank, will be restructured by splitting it into “good” and “bad” banks. The bank’s good assets will be merged into Bank of Cyprus and toxic assets will be later liquidated.
Holders of bank deposits of more than 100,000 euros will have to take losses as according to Cypriot media sources the levy tax will stand at 30 percent. Deposits below 100,000 euros will be secured.
Did you see that? 30% is one serious haircut! This is the EU's way of saying that Cyprus is no longer a safe place to put your money. In return the IMF, the EC and the ECB will be putting up a puny 4B+ euro vs. the nearly 6B euro the Cypriots will raise. If it seems like a little money it is, but keep in mind Cyprus has about a million souls, it's GDP is < Vermont. In fact, anyone with a wallet north of Donald Trumps could have bought out the trouble, except that no one wanted to bail out this banking cestpool:
He also said that the authorities of Cyprus should continue talks with Russia on the financial aid, adding he hoped Moscow would eventually contribute to international assistance for the tiny Mediterranean island nation of about 1 million.
Cypriot Finance Minister Michalis Sarris flew home from the Russian capital Moscow on Friday following an unsuccessful attempt to persuade Russia to grant his country financial aid in return for investments in its national banks and gas projects.
Yep, it was figgered that, since much (1/3rd has been bandied about) of Cyprus' fat, off-shore money was Russian, Moscow would naturally want to help out. Fat chance. The fact is Putin has made a career out of hating on the oligarchs and the mafias. Some natgas vaporware and maybe a port weren't worth the gargantuan FU this move sends to his natural enemies.
It certainly didn't help how the indigenous politi-whores on the isle were so willing to sell out their plebs in the original plan simplified below. Note: the sub-100K euro penalties were THEIR idea:
The rejected bill envisioned a 6.75 percent levy on deposits of less than 100,000 euros ($128,950) and 9.9 percent on larger deposits.
Yeah, the Cypriot executive branch wanted to help pay off the collosal fuck up of their banking sector on the hump of average Cyps, who've already had to deal with the '08 recession, the Greek meltdown and a
fucking naval base exploding (seriously, I kid thee not) that cost an estimated 10% of the countries GDP. These rat-fuckers actually thought that if they contained the costs enough, overseas tax-evading money launderers would continue to use them. Continue to bribe them more directly.
Poor Cyprus will never again be an international banking center and I'll bet most of the country's folk will never give a fuck. Visit the Cayman Islands and ask if Mitt Romney ever bought them a beer. This is abuse of geography by abusive fucks who deserve to be hunted like vermin. I am happy to see this "hair-cut"... It isn't short enough for me.