Cyprus

Monday

M.E. Synon

How long will capital restrictions last in Cyprus? ‘Can’t say’

To the European Commission headquarters this morning for a briefing with Michel Barnier, the Frenchman who is commissioner in charge of banking. The press pack wanted to talk about – what else? – Cyprus. But Barnier wanted to talk about his green paper on the long term financing of the European economy.  Which made for the usual pantomime: the journalists sat and scrolled through emails while Barnier read out his plans on how to finance the EU economy without depending so much on banking (good luck there, commissioner). When he finished, the reporters looked up and started the questions about the banks in Cyprus. Reuters asked how long capital restrictions would last in Cyprus.

Sunday

Louise Cooper

A generation of Cypriots are about to be badly hurt. It’s all unravelling – badly.

This picture is from a website for Cypriot homes:  you can buy a three bedroom apartment for £1.6mn.  Whoever owns that — property developer or individual and whichever bank lent them the money to develop or buy it — now risks being wiped out. And this is just the beginning. Here are a few thoughts on this situation. 1. The downfall. Cyprus was a problem amplified by political incompetence, a disaster that never should have happened.  The outlook is exceeding bleak for this small economy and the economic pain coming to the 800,000 inhabitants will be severe.  Why? Because the banking industry got so giant – at seven times the economy - and it is about to shrink rapidly.

Thursday

Martin Vander Weyer

In Cyprus as in Britain, the prudent must pay for others’ folly – but not like this

The Cypriots are the authors of their own misfortune, having turned their banking system into a rackety offshore haven for Russian loot and lent most of the proceeds to Greece. But it was madness on the part of bailout negotiators to shake confidence in banks across the eurozone by trying to impose a levy on deposits held by even the smallest Cypriot savers, in what was presumably an attempt to cream off a layer of ill-gotten foreign cash. And even if the proposal has been radically watered down by the end of the week, we now know the European powers-that-be are prepared to pull this device out of their toolbox if the subject government is too weak to resist.

Rod Liddle

So the Cypriots cop it for having fallen for the honeyed promises of the EU

I had forgotten about Cyprus. I suppose it was lodged somewhere near the back of my mind as a cheap British Mediterranean satrapy usefully divided into two: a southern bit, where our chavs went on holiday, and a northern bit where our criminals hide out from the filth. I was dimly aware that we had allowed them, some time ago, to go their own merry way and that since had followed a predictable descent into barbarism, yet another Ottoman invasion and some sort of coup effected by the useless Greeks. And that’s it, really.

The Spectator

The empty Budget

Dangerous, unfair, verging on kleptomania: the bailout deal proposed by the EU at the weekend and rejected by Cyprus MPs on Tuesday is everything it has been described as over the past few days, and worse. Now it has been established that the EU views bank depositors as a potential piggy bank to be raided at whim, it is hard to see why anyone would keep significant quantities of cash on deposit in European banks. We are back where we started in 2007, with the threat of Northern Rock-style bank runs across the Continent. Yet the proposed raid in Cyprus is really only different in perception from what is being imposed by stealth on British savers. In his Budget, George Osborne admitted how badly his plans are going: he’s spending far more than he intended and receiving far less.

Tuesday

Isabel Hardman

What will it take to keep Cyprus in the euro?

How will the eurozone respond to the Cypriot parliament's overwhelming rejection of the bank deposit levy? There are only a few days in which to make a deal before the country's banks must re-open, with an ensuing run on deposits. The question is whether Cyprus or the other eurozone countries blink first. Given all members present of the governing DISY party abstained on the vote, there is a chance that an amended bill could come before the parliament again. Indeed, one member, Nicos Tornaritis, said this evening that this would 'strengthen the bargaining position of the Republic of Cyprus'. This will still require action from other countries, whether in the form of concessions on the current plan, or a different deal altogether.