Cyprus Runs Up The White Flag To Bankers

Cyprus' new national flag
Cyprus’ new national flag

On Feb. 25, conservative lawyer Nicos Anastasiades, promising Cypriots he would never allow foreign entities to steal money out of their bank accounts to pay for mistakes the banks made, was easily elected the island’s new President.

On March 25 – Independence Day in Greece and now Surrender Day in Cyprus – someone dressed like Anastasiades, because it surely couldn’t have been the same man who said he would stand by his compatriots, rolled over with his tail between his legs and said he would allow foreign entities to steal 30-100 percent out of Cypriot bank accounts over 100,000 euros ($130,000) so that Cyprus could get a 10 billion euros ($13 billion) bailout from them.

He didn’t put up an ounce of resistance, beyond a fake threat to resign if pushed too far by officials of the European Union and International Monetary Fund because a whipped dog never bites. He even colluded with the enemy by getting around his Parliament, which had voted 36-0 to reject demands to confiscate bank accounts, by sliding through another bill that dealt with the resolution of the state banks, leaving out the lawmakers who had handed him a defeat even more humiliating than suffered by Greek leaders, the Yes Men for the Troika of the EU-IMF-European Central Bank.

Cyprus was on the verge of a bank and economic collapse because its banks had a stack of bad loans to Greek businesses who went belly-up in their country’s crushing economic crisis and holdings in Greek bonds that were devalued 74 percent, bringing 4.5 billion euros ($5.82 billion) in losses. So instead of going after the people who defaulted on the loans, the government is going to steal 5.8 billion euros ($7.5 billion) from the accounts of people who had saved and put their money in the bank.

This is the point where apologists for this legalized bank robbery, who don’t have their money in Cypriot banks and can preach from afar, will say that Cyprus had no alternative and was facing default and that the confiscation will hit Russian oligarchs and mobsters who use the island’s banks to launder money.

That accounts for about 30 percent of the uninsured deposits over 100,000 euros, which means 70 percent of them, including many belonging to legitimate Cypriot businesses will be wiped out, the government admitted, acknowledging that it intends to seize up to 100 percent of the money, including from Cypriot business owners who aren’t Russian oligarchs or mobsters and now will lose so much of their money they could lose their businesses too.


Almost as soon as the deal was done, German and Dutch banks were offering the rich on Cyprus bank accounts that could be opened in an hour. The EU went after Cyprus for being a money-laundering engine but doesn’t object to banks in Switzerland, Luxembourg, Lichtenstein and London letting people have secret bank accounts to evade taxes.

Everybody loves dumping on the rich, especially Russians who party-hardy on Cyprus and show off their wealth in a garish way, but it was their $26 billion in deposits that allowed Cypriot banks to make loans for cars, homes, business start-ups and other legitimate uses that now will be lost.

Cyprus put “capital controls” on banks, which is short hand to mean people couldn’t take all their money out when the banks were to reopen as the government feared a run on the banks, and if anybody had anything left in a Cypriot bank and didn’t take it out when they could then they deserve to be fleeced. And here’s the killer: it’s not the withdrawals that the banks have to worry about so much as trying to get new deposits, the lifeblood of any lender because no one’s going to put money in a bank that steals it.

The Troika obviously wanted to punish Cyprus after the Parliament voted  to reject the initial plan that would have seized 6.75 percent of INSURED bank accounts that were allegedly guaranteed by the government against loss, and they rubbed Anastasiades’ face in the dirt to make him pay for his Parliament’s intransigence.


Some analysts said that because of what he did, Cypriots face years of economic hardship without eliminating the prospect the country could yet be forced out of the Eurozone. Almost immediately – after an inevitable run on the banks once frozen accounts are released again – there will be food and medicine shortages because businesses, unable to access their money, won’t be able to buy goods for markets and even gasoline stations. That’s what capital controls do.

Cyprus then will be hit with at least two years of a deep recession and soaring unemployment as Russians and other foreign investors move what’s left of their money to countries that don’t steal it to pay for other people’s mistakes, and as the EU moves toward a business model of using other people’s money to cover the errors of its members.

Fiona Mullen, an economist specializing in Cyprus, told Agence-France-Presse that while the deal had prevented an overnight exit from the euro that many Cypriots would wonder if it would be better off leaving anyway. “They feel very betrayed by an awful lot of countries in this and I think that there are going to be longer term implications,” she said. And wouldn’t you love to know where Anastasiades’ and his like keep their money, which is undoubtedly a lot more than 100,000 euros.

The plan calls for Cyprus’ second biggest lender Laiki (Popular Bank) to be closed overnight – tossing a lot of people out of work after Anastasiades vowed to protect their jobs, and investors looked set to lose all unsecured deposits of over 100,000 euros. The Bank of Cyprus, the island’s No.1 lender, will survive but the government said uninsured depositors will lose at least 30 percent more.

The ink wasn’t even dry on the deal when the head of the Eurozone, Dutch Finance Minister Jeroen Dijsselbloem, said the Rubicon has now been crossed and that lenders are eying going after bank depositors in other countries to make them pay.

In the background is the heavy hand of German Chancellor Angela “The Iron Dominatrix” Merkel, who loves austerity and punishing people, and you know the Rhine will never be crossed unless we can bring General Patton back from the dead to take a leak in in it.

“If there is a risk in a bank, our first question should be ‘Okay, what are you in the bank going to do about that? What can you do to recapitalize yourself?’ Dijsselbloem told Reuters. “If the bank can’t do it, then we’ll talk to the shareholders and the bondholders, we’ll ask them to contribute in recapitalizing the bank, and if necessary the uninsured deposit holders,” he said.

The insured depositors are next, but here’s a tip: don’t put more than 99,999 euros in any European banks, take out any interest when it goes up, and if you can, use credit unions instead. Anyone who has any money in banks in Greece, Portugal, Italy, Spain and other countries with economic crises should take it out before the Troika does. They have a clerk named Anastasiades ready to fleece you and he came cheap.



  1. Andy you are irrational.

    This is nothing anyone on the right would want. You should be pleased with this deal. Money is being taxed (i.e. stolen) out of the bank accounts of rich people rather than the “poor, pensioners, and workers” you keep self-righteously lamenting about like commies like Tsipiras.

    Whine. Whine. Whine…. for someone else to pay to fix their economic problems. This is the leftist way.

    A bunch of spoiled lazy rotten thieves that refuse to take moral responsibility for their own lives so instead they shamelessly try and narrate why other people are responsible.

  2. Greeks will pay for their sins…….GENOCIDE it committed towards Albanians of Chameria and extermination of Arvanitia.

  3. Its you that are trying to commit GENOCIDE on Greeks by attempting to delete our very identity you evil Nazi.

  4. Come on Andy, you should applaud this. The EU is taking money from people who hid their money in Cyprus to avoid paying taxes. For the past 2 years, you railed on how the rich are untouched and everyone is going after the workers and pensioners and kids are passing out because they ran out of noy noy. Now you are defending the Russian tycoons who hide their money and avoid taxes. Then their was that article this weekend where they said Cyprus stores are empty and showed a picture of a US grocery store before a Hurricane. Shoddy journalism.

  5. Our leftists just like repetitiously ranting in hysteria about the “poor pensioners and workers”. Reason is not big on their agenda. They are governed by their emotions and desire to make us all equal fellow comrades.

    The reality is people are not equal and never have been. We are individuals not clones of one another. We are only equal before the law not in our talents and efforts. Trying to force absolutely equality between unequal things is irrational and harmful. It’s like asking an Olympic champion to carry other competitors during a race. Or asking someone mentally retarded to perform a delicate surgery least we hurt their feelings.

    There is nothing wrong with helping the weakest link but the context of that help matters. If its someone barking in one’s ear how you owe them and throwing rock and Molotov cocktails, its like feeding a rabid animal.

  6. My problem is Andy just whines in every article. He’s basically whining in defense of billionaires right now that they lost their money. He’s defending the elite, the same one he rails against in his articles that don’t pay taxes.

  7. Looking for reason and principle among the irrational is a lost cause.

    This is Greek Reporter. Proud patriot Greeks… that that 10 times a week complain about “Greek racists”.. then go on write O articles about massive racism against Greeks these days.

    Case in point,, even alleged human rights groups say squat to criticize FYROM’s blatantly obvious ridiculous sudden identity change from Slavs into descendents of ancient Macedonians and state sponsored threats against our country. (effectively trying to hide their patronizing racism towards greeks for ignoring our concerns)

  8. More incredible fraud and criminality brought to you by the EU Commission where Merkel and her Nazi friends Olli Rehn and Legarde bully smaller countries into slavery and robbing their banks without slighest regard for the citizens!

  9. Cyprus was on the verge of a bank and economic collapse because its
    banks had a stack of bad loans to Greek and holdings in Greek bonds
    that were devalued 74 percent, bringing 4.5 billion euros ($5.82
    billion) in losses.
    So – let us help Cyprus and pay back our Greek bonds.

  10. the rich have taken out their money already. it’s the poor and middle class who will get hit

  11. There is a tens of billions in rich people money in Cypriot banks. A huge chunk of that is going to be taxed. Andy is just a leftist whiner that contradicts himself.

  12. you don’t know what you’re talking about. if that was the case, then why did the ECB just increase emergency liquidity funding by 3 billion to the Cyprus Central Bank- an amount that is surely to rise because all the Russians and the wealthy pulled out their money over the last 10 days. “When we reported yesterday that over the past week, the Russian depositors in Cypriot banks had managed to find loopholes through which to pull out billions in supposedly halted deposits (courtesy of bank shutdowns and capital controls) some, accurately, balked: if that were the case the Cyprus Centeral Bank would need a proportionate increase in emergency funding from the ECB (in the form of ELA) to make up for the deposit outflows. Which is why moments ago Welt reported precisely what we had been expecting to read all morning: the Cyprus Central Bank is about to demand even more cash from the ECB to plug the holes left from the stealthy Russian outflows.




    Remember: this is just a feeler by the Cyprus Central Bank in direction Frankfurt – the last thing Cyprus wants is to expose just how big the full liquidity hole is resulting from the stealthy Russian deposit outflows. We expect when all is said and done, the full incremental bailout needs to rise in the double digits.”

  13. The whole World knows the Greek LIES now and its GENOCIDES on all ethnic minorities in its boarder sates.

  14. Its you that are trying to commit GENOCIDE on Greeks by attempting to delete our very identity you evil Nazi.

  15. You are the one that doesn’t know what you are talking about. Some of the capital obviously did leave (including in the months leading up to this). This is precisely why capital flow restrictions have now been put in place.

    However there is still billions in deposits by wealthy people in Cypriot banks and that is what is going to take the brunt of it (rather than small savers that leftist claim they support) Lying by resorting to hyperbole that *all* the rich money has left doesn’t gain you any credibility points.

  16. actually it does give me credibility points because all the rich money has left per the sudden increase in ECB liquidity emergency funding to the cypriot central bank TODAY. the money left DURING the capital controls and closures last week. How you may ask? ”

    While ordinary Cypriots queued at ATM machines to withdraw a few hundred euros as credit card transactions stopped, other depositors used an array of techniques to access their money.

    No one knows exactly how much money has left Cyprus’ banks, or where it has gone. The two banks at the centre of the crisis – Cyprus Popular Bank, also known as Laiki, and Bank of Cyprus – have units in London which remained open throughout the week and placed no limits on withdrawals. Bank of Cyprus also owns 80 percent of Russia’s Uniastrum Bank, which put no restrictions on withdrawals in Russia.Russians were among Cypriot banks’ largest depositors.

    So while one could not withdraw from Bank of Cyprus or Laiki, one could withdraw without limitations from subsidiary and OpCo banks, and other affiliates?

    Just brilliant.

    And if there was any doubt that the entire process of destroying one entire nation was simply to punish Cyprus, it can be completely cleared away now:

    ECB officials contacted Latvia, another EU country that has received large Russian deposits, to warn authorities against taking in Russian money fleeing Cyprus, two sources familiar with the contacts said.

    “It was made clear to our Latvian friends that if they want to join the euro, they should not provide a haven for Russian money exiting Cyprus,” a euro zone central banker said.

    If one thinks there is any material Russian cash therefore left in Cyprus with this epic loophole in place, we urge them to make a deposit in the insolvent nation. One person who certainly will not be allocating any of his money into Bank of Cyprus is German FinMin Schaeuble:

    German Finance Minister Wolfgang Schaeuble said the bank closure had limited capital flight but that the ECB was looking closely at the issue. He declined to provide figures.

    Perhaps because if he did, it would become clear that the only entities truly punished by this weekend’s actions are not evil Russian billionaires, but small and medium domestic companies, and other moderately wealthy individuals, hardly any of them from the former “Evil Empire.”

    Companies that had to meet margin calls to avoid defaulting on deals were granted funds. Transfers for trade in humanitarian products, medicines and jet fuel were allowed.

    The stealth withdrawals by Russians of course means that the two megabanks are now utterly drained of capital, and that the haircuts on those who still have unsecured deposits with the two banks will be so big it will likely mean a complete wipeout of all deposits. As in 0% recovery on your deposits!

    In other words, by now any big Russian funds in Cyprus are long gone, and the only damage accrues to the locals: for one reason because their money over the critical EUR100K threshold has been “vaporized”, and for another because the marginal driving force and loan demand creator in Cyprus, the Russians, are gone and are never coming back again.

    This is what passes for monetary real-politik in the New Normal – an entire nation becomes collateral when pursuing a wealthy group of people. And the “wealthy group” is victorious in the end despite everything…

    If we were Cypriots at this point we would be angry. Very, very angry..”

  17. “all the rich money has left”

    No *all* the rich money hasn’t left. Your repetitious hyperbole will not make your statement anymore true.

    While there has been some bleeding in the lag time between capital flow controls being put in place, the exact number is speculative. From reports thus far it seems like only a fraction of the total money has left. There is tens of billions Euros in Cypriot banks before this started. Even if a few billion were moved under the radar it still add up to tens of billions of capital by wealthy people that will take a hit.

    You need to stop listening to the hysteria generated by leftists.

  18. Indientally I didn’t support this move by the Troika (the ones who are effectively calling the shots). Triggering a bank run and more uncertainty for such a small bailout was foolish. The troika also botched things by first not quietly making sure things were in agreement with Cypriot government before going public. (which is exactly what created the lag time)

  19. this was done on purpose to try to hit the russians, though this miserably failed, and to increase deposits into the “stronger” (very relative) countries like Germany. Not to mention German 2 yr bond yields just went negative


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