New round of meetings today in Cyprus between the
President of the Republic and all the political leaders of the opposition in a
desperate decision to find the sources of funding to come up with the 5.8
billion Euros needed to avoid bankruptcy.
This
morning again governmental sources such as the minister of Transportation
confirmed that Cyprus is trying to find a solution to bring it for a vote in
Parliament.
There are talks that they will try to bring in the
haircut of deposits but this time they will propose that under 100,000 Euros
there will be no flat tax, and over this amount, a 5% tax. Also on the
discussions are the voluntary contributions of pension funds, the contribution
of the Cypriot Church with its properties – real estate as collateral, and an
alternate plan to tax deposits: from 0 – 100,000 Euros 3%, and over this amount
different brackets. The reason being that it will depend whether they come up
with the 5.8 billion needed to present to the Euro group. The irony is that the
same deputies that voted no two days ago may vote yes this time, giving the
aftermath of the decision and the shocking waves spread to the financial
markets and mainly to the banking system.
It is confirmed that Laiki popular bank will be sold
due to its bad debts, and possibly to the Russians. This is why the Cypriot Finance
minister, the minister of Commerce, and executives from the bank are on an
official visit to Russia.
As for the potential loan sought by Cyprus from
Russia, the plan has been aborted by Russia because they wanted to avoid any disturbance
of relations with the European Union.
In Washington where a meeting was held by the board of
directors of the IMF, the representative from Brazil criticized the decision to
tax deposits in Cyprus, said he was against it, and also was critical of the
IMF president.
When Cyprus became a member of the European Union new
that it was a nation of heaven for money laundering, zero tax, high interest on
deposits, its GNP was 18 billion while it’s banking assets 70 billion.
We are awaiting to see what will happen to the Cypriot
banks – branches operating in Greece. The Greek Finance minister said that a
plan is ready to buy out these banks and those depositors in Cypriot banks in
Greece are immune.
