Daily Archives: March 21, 2013

Archives March 21, 2013 posted by

Central Bank says to keep 2nd largest lender in business

CYPRUS will take measures to consolidate its banking sector, including steps to avoid bankruptcy at its second largest lender, Popular Bank , Central Bank Governor Panicos Demetriades said on Thursday.

“By establishing this legal framework, resolution measures will be imposed on Popular Bank so that it will be in a position to continue to offer banking services to its clients next Tuesday,” when banks are due to reopen, he told reporters. “Otherwise, the Popular Bank will be led to immediate bankruptcy and termination of its operation with catastrophic consequences for the workers and depositors, our banking system and the country’s economy.

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Archives March 21, 2013 posted by

Russia's VTB not interested in buying Cypriot banks

 

RUSSIA’S VTB said it did not want to buy banking assets in Cyprus, as talks continue on whether Russia can help the island, whose financial system may collapse if it does not get an international bailout.

Cypriot Finance Minister Michael Sarris was in Moscow for a second day to seek investments in Cyprus’ banks and energy resources to reduce its debt burden, as well as an extension to an existing Russian bailout loan.

The European Union has given Cyprus till Monday to raise billions of euros for an international bailout or face the collapse of its financial system and likely euro exit.

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Archives March 21, 2013 posted by

Turkey may challenge Cypriot use of gas reserves in bailout

 

TURKEY could challenge any move by Cyprus to speed up offshore natural gas exploration as a way of attracting desperately needed investment to save its teetering economy, senior Turkish officials said on Thursday.

The EU has given the island until Monday to raise the billions of euros it needs to clinch an international bailout or face the collapse of its financial system and likely exit from the euro currency zone.

Cyprus is in talks with Moscow over possible Russian investments. Cypriot Finance Minister Michael Sarris has identified the divided island’s offshore gas riches as one area in which Russia could invest.

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Archives March 21, 2013 posted by

Cyprus crisis: what we have learnt so far

CONFUSION reigns supreme in the Cyprus bailout. So it is fairly risky to stick out your neck commenting on an unknown outcome that could leave you exposed to ridicule in hours if things change. And this blog is not intended to be a daily or even weekly commentary as I am not providing short-term trading advice, meaning that it is tempting to just wait and see what the outcome will be.

However, as this is so far the most important macroeconomic event of 2013 and it is continuously developing in new and perplexing ways, I feel it is necessary to try to make some sense out of what we are observing and hearing.

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Archives March 21, 2013 posted by

Government achieves consensus on Solidarity Fund

THE GOVERNMENT has achieved consensus on the setting up of an Investment Solidarity Fund in a bid to raise the required €5.8 billion that would unlock the EU/IMF’s €10 billion financial assistance package for Cyprus.

The creation of the Fund comes in the wake of parliament’s rejection of a controversial tax levy on banking deposits agreed by the Cypriot government and Eurogroup last Saturday.

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Archives March 21, 2013 posted by

ECB gives Cyprus bailout ultimatum, banks face cutoff

 

 

The European Central Bank gave Cyprus until Monday to raise billions of euros to clinch an international bailout or face losing emergency funds for its banks and inevitable collapse.

The ultimatum came with the island’s leaders locked in talks on a “Plan B” to try to raise 5.8 billion euros demanded by the EU under a 10 billion euro ($13 billion) rescue, after angry lawmakers threw out a tax on deposits as “bank robbery”.

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Archives March 21, 2013 posted by

Deposit haircut back on the table

 

THE government yesterday ordered banks to stay shut until next week as it toyed with the idea of re-submitting a proposal on tax deposits – at a much lower rate than the previous scheme – as it scrambled to avert a financial meltdown.

The government was yesterday trying to find alternative solutions after parliament on Tuesday rejected the terms of a bailout from the European Union and turned instead to Russia for a lifeline.

“We don’t have days or weeks, we have only hours to save our country,” Averof  Neophytou, ruling DISY deputy chairman, told reporters as crisis talks in Nicosia dragged into the evening. 

Neophytou tried to get the message through to other parties.

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Archives March 21, 2013 posted by

Our View: Russia has no moral, legal or political obligation to save our insolvent banks

IN THE LAST four days, we have been hearing and reading an array of rumours about how the Russians would step in with their billions and spare Cyprus having to agree to the odious levy on deposits that is a condition for the EU bailout. So far not a single one of these rumours has proved to have any basis in reality, but the production was unaffected.

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Archives March 21, 2013 posted by

Sarris: nothing concrete from Moscow visit

FINANCE Minister Michalis Sarris has vowed to stay in Moscow to reach an agreement on ways to help Cyprus out of the quagmire, after yesterday’s meetings proved inconclusive. 

Sarris went to Moscow on Tuesday evening ahead of the Cypriot parliament’s rejection of the revised draft bill regarding a one-off bank levy on deposits. 

Russian assistance had become the great eastern hope of many Cypriots following rejection of the troika’s hard-hitting measures to ‘rescue’ Cyprus, which involved an unprecedented hit to depositors, including small insured savers.

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