There's a short story out there from yesterday....over the terrible woes of a Swiss youth group on a holiday trip in Germany.
They'd taken the option of traveling by German rail. So they arrive at the station, and frankly....they are in pretty bad shape....flu-like symptoms....to the extreme.
Based on commentary....they were all in need of constant toilet seats and puking. Yeah, that particular cabin was in rough shape as it pulled into Mannheim.
Happily, for everyone....including the regular passengers....the Bahn guys took a leadership role and just said enough....calling for ambulances.
Now, as you read the story...it's an odd mix of facts. This came out of the Local.de. Seventeen ambulances were called out to the bahnhof, with fifteen medical personnel. I read this several times....trying to figure the mathematical statement and how you could drag seventeen vehicles to a site with fifteen drivers. Eventually, I came to realize that the ambulance crews were totally separate and just there to toss the kids onto the vehicle and go. The medical team were totally separate.
Then you came to the last part of this story.....the seventeen ambulances would transport fourteen young folks to the local hospital. Again, mathematically it doesn't make much sense. Then you realize that the whole emergency plan was mostly chaotic and they probably sent every single ambulance in the local area that was manned that evening.
Sometimes, you have to think long and hard through these stories.
As for the coach area after this mess? All the Bahn guys will say is that it was taken off the line and disinfected. In the flu season, riding the train is probably one of the top five ways of getting a flu-like virus....so it's pretty practical to use alcohol hand-rub when you sit on such a train or exit it.
As for the fourteen kids? I'm guessing they have a pretty good story to tell the rest of their life, and they probably won't be traveling by train ever again.
Tuesday, March 26, 2013
Cyprus: Day Nine (Tuesday)
Monday came and went.....with the script for an ending still mostly unknown.
The banks now say that they will be closed until Thursday morning. So the ATM mechanism is the only thing keeping the isle alive. According to various news sources....cash is the only thing keeping any hint of civilization alive right now.
The government has announced that they are appointing some investigators to find out who did what, and apparently bring a few folks to a "show-trial" (my term for whatever comes out of this). Someone will ask some questions over who authorized the purchase of the Greek bonds, and why such a massive amount of investment money was spent on these. My humble guess is that the bankers will point back to some governmental pressure (maybe the former Communist president of Cyprus who left the government in the last couple of months). The end result is someone going through a public court forum, and then being carried off to three or four years of prison. At best, you won't see more than a couple of individuals tried.
The Russians? They've been a bit more careful in the words over the past twenty-four hours. The problem is that when things finally settle....every Russian with money still left will want to remove the cash, and they don't want a bunch of stumbling blocks in their way. The idea is to have a friendly EU deal, and maybe even find another European country with decent banking situations to move the cash into.
Long-term survival of Cyprus? It may take a year.....maybe even two years....but every Russian will likely remove the cash they have left and just depart the island. Whatever big growth they had....is gone for the foreseeable future.
There's a comment or two from the Cyprus Mail over the social media connection with this crisis. Cypriots have used the forum to voice feelings.
The Cyprus Mail even mentions the church folks are also on the losing end of the mess....with at least 100 million Euro lost as the big accounts are taxed.
As for Tuesday? I think you can see the end of the tunnel here. Banks ought to open on Thursday, with some drastic limits in effect. A common citizen probably will be able to walk in and ask for 500 Euro and easily get it. If you wanted to close your account? Forget it.....I don't think anyone will be allowed to do this. On the positive side, at least you will be able to back to credit cards, and pay for fuel and groceries with this method.
By Saturday, most of the international media on the isle will have packed up and been ordered to go back home because the story is mostly finished.
The banks now say that they will be closed until Thursday morning. So the ATM mechanism is the only thing keeping the isle alive. According to various news sources....cash is the only thing keeping any hint of civilization alive right now.
The government has announced that they are appointing some investigators to find out who did what, and apparently bring a few folks to a "show-trial" (my term for whatever comes out of this). Someone will ask some questions over who authorized the purchase of the Greek bonds, and why such a massive amount of investment money was spent on these. My humble guess is that the bankers will point back to some governmental pressure (maybe the former Communist president of Cyprus who left the government in the last couple of months). The end result is someone going through a public court forum, and then being carried off to three or four years of prison. At best, you won't see more than a couple of individuals tried.
The Russians? They've been a bit more careful in the words over the past twenty-four hours. The problem is that when things finally settle....every Russian with money still left will want to remove the cash, and they don't want a bunch of stumbling blocks in their way. The idea is to have a friendly EU deal, and maybe even find another European country with decent banking situations to move the cash into.
Long-term survival of Cyprus? It may take a year.....maybe even two years....but every Russian will likely remove the cash they have left and just depart the island. Whatever big growth they had....is gone for the foreseeable future.
There's a comment or two from the Cyprus Mail over the social media connection with this crisis. Cypriots have used the forum to voice feelings.
The Cyprus Mail even mentions the church folks are also on the losing end of the mess....with at least 100 million Euro lost as the big accounts are taxed.
As for Tuesday? I think you can see the end of the tunnel here. Banks ought to open on Thursday, with some drastic limits in effect. A common citizen probably will be able to walk in and ask for 500 Euro and easily get it. If you wanted to close your account? Forget it.....I don't think anyone will be allowed to do this. On the positive side, at least you will be able to back to credit cards, and pay for fuel and groceries with this method.
By Saturday, most of the international media on the isle will have packed up and been ordered to go back home because the story is mostly finished.
Monday, March 25, 2013
How the Russians Fell into the Pit
It's a curious story over Cyprus, the bank problem, and the Russian billionaires.
The Russians had been around Cyprus for at least a decade, ease of entry, warm climate, and a safe place to relax.
When January of 2008 rolled around, the new currency of Cyprus...was the Euro. The Russians brought their money and deposited significant sums immediately
You see, there's really no trust in Moscow with the Russian banking sector. So they wanted a European spot to park their money and to feel some trust. Cyprus made sense.
There's a strange at this point. Cyprus, as of 2008....was run by a President from the Communist Party on the island. Most of the cabinet officers....were generally of the same persuasion. The finance minister? You can figure that he was mostly a friend of the party or better.
What the banking sector did, with any clear understanding by the Russian billionaires ...was to immediately take the cash and flush it into Greek bonds. If you had to pick the worst possible time to do something like this....this was it.
Did the Russians grasp what they were signing up to? I seriously doubt it. I imagine that the banking folks simply sat through meetings with their government counterparts, and eventually came to feel that helping Greece with these bonds....made sense. If you'd brought this up with a French banker, a German banker, or even a Japanese banker.....they would have laughed and suggested to go put the money into a safer environment.
So weeks pass. Months pass. The money just plain evaporated into thin air. Greece and it's bonds were going to ever be a positive investment.
I would imagine by the spring of 2012....the bankers were aware of the mess, and just worried over how to explain massive losses. If the Russians had never come or invested the billions....none of this would have occurred. Instead, there's nothing much left now.
The EU folks understood the mess, but didn't have any compassion for the Russians. This was a money pit with no rules. The Cyprus banking atmosphere was a joke. And the lack of any taxation on the Russians bothered most everyone. No one wants to hand European cash over to the Cyprus banks...which would then hand it straight to the Russians.
The Russians should have hired one smart economic expert, and then listened to him. They could have diversified their money into a thousand different ventures, and settled for some fairly safe bets. Instead, they listened to a couple of communist political hacks who talked up Greek bonds.
For pity? Well....yeah, it's sad that you had a billion Euro today, and tomorrow....it's just half-a-billion probably.
The Russians had been around Cyprus for at least a decade, ease of entry, warm climate, and a safe place to relax.
When January of 2008 rolled around, the new currency of Cyprus...was the Euro. The Russians brought their money and deposited significant sums immediately
You see, there's really no trust in Moscow with the Russian banking sector. So they wanted a European spot to park their money and to feel some trust. Cyprus made sense.
There's a strange at this point. Cyprus, as of 2008....was run by a President from the Communist Party on the island. Most of the cabinet officers....were generally of the same persuasion. The finance minister? You can figure that he was mostly a friend of the party or better.
What the banking sector did, with any clear understanding by the Russian billionaires ...was to immediately take the cash and flush it into Greek bonds. If you had to pick the worst possible time to do something like this....this was it.
Did the Russians grasp what they were signing up to? I seriously doubt it. I imagine that the banking folks simply sat through meetings with their government counterparts, and eventually came to feel that helping Greece with these bonds....made sense. If you'd brought this up with a French banker, a German banker, or even a Japanese banker.....they would have laughed and suggested to go put the money into a safer environment.
So weeks pass. Months pass. The money just plain evaporated into thin air. Greece and it's bonds were going to ever be a positive investment.
I would imagine by the spring of 2012....the bankers were aware of the mess, and just worried over how to explain massive losses. If the Russians had never come or invested the billions....none of this would have occurred. Instead, there's nothing much left now.
The EU folks understood the mess, but didn't have any compassion for the Russians. This was a money pit with no rules. The Cyprus banking atmosphere was a joke. And the lack of any taxation on the Russians bothered most everyone. No one wants to hand European cash over to the Cyprus banks...which would then hand it straight to the Russians.
The Russians should have hired one smart economic expert, and then listened to him. They could have diversified their money into a thousand different ventures, and settled for some fairly safe bets. Instead, they listened to a couple of communist political hacks who talked up Greek bonds.
For pity? Well....yeah, it's sad that you had a billion Euro today, and tomorrow....it's just half-a-billion probably.
Cyprus: Day Eight (Monday)
The deal is done, and it's all downhill from this point on.
If you were a regular citizen on Cyprus, with a bank account of 100k Euro or less....you survive with no taxation on your account. Otherwise? You are screwed. You guys with the bigger accounts won't be able to reach in and close out your accounts immediately (as you would expect), and your taxation might be as high as forty percent (it's not clear about how the taxes will work on the bigger accounts).
The EU deal was agreed upon at the last minute, and there's to be a minimum of 10 billion Euro dropped to Cyprus to cover the operations.
As for Monday? Well, there is some bad news in that ATM machines are now limiting folks to roughly 100 Euro per day. Some might go as high as 120 Euro. It's a one-day limitation, at least on appearance. One would expect Tuesday's operations to start back to a more normal state....maybe back to 260 Euro. Perhaps by Thursday....back to a norm.
Based on commentary in several news sources....the state came to an agreement....there's to be a temporary restriction to cash withdrawals, with no specified date to end this. There's a ban on bank transfers put into effect, again with no specified date to end it. There's a general limit put on credit cards and debit cards. And there appears to be a new rule to stop sudden interruption of CD-type bank accounts.
The losers in all of this? The Russian billionaires. I suspect that they will be fairly displeased over the answer, and lock their sights onto the politicians, bankers and EU aristocrats who engineered this rescue. I'd personally suggest they look over at the Russian government who said they didn't have a desire to get into this Cyprus mess or help rescue them. It'll be weeks....if not months....before the billionaires will be allowed to touch and move their money. They won't be happy about this.
As for Monday? No bank openings....just a moment for the dust to settle, and for everyone to eye Tuesday carefully. Food and gas appear to be the number one issues on everyone's mind. Had this gone on for another five to seven days....the isle would have been in utter chaos. The European markets ought to be one to two percent higher today by closure.
If you were a regular citizen on Cyprus, with a bank account of 100k Euro or less....you survive with no taxation on your account. Otherwise? You are screwed. You guys with the bigger accounts won't be able to reach in and close out your accounts immediately (as you would expect), and your taxation might be as high as forty percent (it's not clear about how the taxes will work on the bigger accounts).
The EU deal was agreed upon at the last minute, and there's to be a minimum of 10 billion Euro dropped to Cyprus to cover the operations.
As for Monday? Well, there is some bad news in that ATM machines are now limiting folks to roughly 100 Euro per day. Some might go as high as 120 Euro. It's a one-day limitation, at least on appearance. One would expect Tuesday's operations to start back to a more normal state....maybe back to 260 Euro. Perhaps by Thursday....back to a norm.
Based on commentary in several news sources....the state came to an agreement....there's to be a temporary restriction to cash withdrawals, with no specified date to end this. There's a ban on bank transfers put into effect, again with no specified date to end it. There's a general limit put on credit cards and debit cards. And there appears to be a new rule to stop sudden interruption of CD-type bank accounts.
The losers in all of this? The Russian billionaires. I suspect that they will be fairly displeased over the answer, and lock their sights onto the politicians, bankers and EU aristocrats who engineered this rescue. I'd personally suggest they look over at the Russian government who said they didn't have a desire to get into this Cyprus mess or help rescue them. It'll be weeks....if not months....before the billionaires will be allowed to touch and move their money. They won't be happy about this.
As for Monday? No bank openings....just a moment for the dust to settle, and for everyone to eye Tuesday carefully. Food and gas appear to be the number one issues on everyone's mind. Had this gone on for another five to seven days....the isle would have been in utter chaos. The European markets ought to be one to two percent higher today by closure.
Sunday, March 24, 2013
Cyprus: Day Seven (Sunday)
Saturday has come and gone.
The best of Saturday was this realization around the island that a tax of some type....will occur on account holders, period. The numbers might be tossed around in some minor way but there is nothing much left of a alternate deal.
It appears that individuals with accounts of 100k Euro or less....will survive on. Accounts above that level....will be in a special status. You probably won't be able to relieve your money or do much of anything with it. Bad loans will affect the bigger accounts....with money simply taken off the top of those banks. The method? Yet to be decided.
Sunday ends up being the day that meetings at the EU occur with Cyprus officials and the final details are put into place.
Monday is another off day for the banks....but it's also a day that all bank officials can run up the final details and be prepared for Tuesday.
Sometime on Tuesday morning....the banks ought to open, and do regular business. Whether or not anything can ever be 'regular' again....might be open to debate.
The best of Saturday was this realization around the island that a tax of some type....will occur on account holders, period. The numbers might be tossed around in some minor way but there is nothing much left of a alternate deal.
It appears that individuals with accounts of 100k Euro or less....will survive on. Accounts above that level....will be in a special status. You probably won't be able to relieve your money or do much of anything with it. Bad loans will affect the bigger accounts....with money simply taken off the top of those banks. The method? Yet to be decided.
Sunday ends up being the day that meetings at the EU occur with Cyprus officials and the final details are put into place.
Monday is another off day for the banks....but it's also a day that all bank officials can run up the final details and be prepared for Tuesday.
Sometime on Tuesday morning....the banks ought to open, and do regular business. Whether or not anything can ever be 'regular' again....might be open to debate.
Saturday, March 23, 2013
A Little Hospital Story
What the experts will admit....even in public forums....is that German hospitals are in a over-abundant quantity. Because of this, there's an ongoing battle with costs and how the system will survive.
This past week....the German government came to a temporary solution. They will inject two different payments out into the public hospitals of Germany. It didn't matter if you were running a fairly profitable hospital or a very financially weak hospital....you got a chunk of money out of the magic bucket. The amounts? For 2013, it's around 300 million Euro ($390 million dollars roughly). For 2014, it's to be around 580 million Euro (figure around $800 million dollars). (Numbers from the Local.de).
There are around 2,000 public hospitals in Germany. Some are major significant operations, and a fair number are simply small operations in the middle of nowhere. The experts tend to believe that over fifty percent are in financial trouble and could fail within the next four years.
The issues? There's a limit on profit, and a limit on almost every single item which the doctor or the hospital might prescribe for a person. Toss in pay-raises which are being continually demanded by nurses and doctors, and you've got a fairly difficult situation. Changes which dropped facility management from the state's budget, and put it directly onto the back of the hospital....means that they have to now pay for maintenance, construction, heating, and general repair.
The general gut feeling by the insiders (doctors).....is that there's going to have to be a cut on the 2,000 public hospitals. We aren't talking about a mere 100 or 200 hospitals either. You might find yourself in a rural community in the Eifel region one day, and the nearest hospital is now sixty minutes away, instead of the twenty minutes you were used to in the old days.
The general solution? Somehow, the government will have to invent another method to tax people for medical situations....without anyone noticing it's another tax. Then pass this onto the hospital program without making this obvious that it's a payment to keep them in operation.
This past week....the German government came to a temporary solution. They will inject two different payments out into the public hospitals of Germany. It didn't matter if you were running a fairly profitable hospital or a very financially weak hospital....you got a chunk of money out of the magic bucket. The amounts? For 2013, it's around 300 million Euro ($390 million dollars roughly). For 2014, it's to be around 580 million Euro (figure around $800 million dollars). (Numbers from the Local.de).
There are around 2,000 public hospitals in Germany. Some are major significant operations, and a fair number are simply small operations in the middle of nowhere. The experts tend to believe that over fifty percent are in financial trouble and could fail within the next four years.
The issues? There's a limit on profit, and a limit on almost every single item which the doctor or the hospital might prescribe for a person. Toss in pay-raises which are being continually demanded by nurses and doctors, and you've got a fairly difficult situation. Changes which dropped facility management from the state's budget, and put it directly onto the back of the hospital....means that they have to now pay for maintenance, construction, heating, and general repair.
The general gut feeling by the insiders (doctors).....is that there's going to have to be a cut on the 2,000 public hospitals. We aren't talking about a mere 100 or 200 hospitals either. You might find yourself in a rural community in the Eifel region one day, and the nearest hospital is now sixty minutes away, instead of the twenty minutes you were used to in the old days.
The general solution? Somehow, the government will have to invent another method to tax people for medical situations....without anyone noticing it's another tax. Then pass this onto the hospital program without making this obvious that it's a payment to keep them in operation.
Cyprus: Day Six (Saturday)
Friday has come and gone.
It was a day of talk and discussion. The idea of the tax on account holders? It's back to the front, and probably the ultimate solution now. The Russians and their loan deal is off the table....period, no discussion.
The new talk? Well....this is mostly around the idea of the tax, but starting to center on the idea that anyone with a small account (100 Euro or less) might skip out of the tax entirely, and those with bulky accounts....end up with a twenty-percent tax. You can imagine the hostile nature of the Russian billionaires but since Russia wasn't going to help in the loan business....they aren't exactly a good buddy of Cyprus now. No love lost....would be a good term to use.
After almost a week, there's a number of signs being reported by various media groups that grocery stores and pharmacy operations are starting to suffer. You can buy anything....unless you show cash. In a modern society, you can't run a business operation on cash only....it just doesn't work.
From the Cyprus Mail (the better of sources for news on the isle)....the reports indicate Fridays chief accomplishment of splitting bank operations off into good banks (with small investors, 100k Euro or less) and bad banks (over 100k Euro). You as the customer....had no say in the matter, after they passed the bill into law.
The German angle today? There's a fair amount of hostility brewing within the public sector, with feelings that Germany is the stumbling block to achieving any solution. One of the comments came out of the bank employees at one location....talking up their point....."We are not Germany's slaves". It's hard to judge how this motivates everyone on the island about Germans and the amount of tourism that occurs.
In a normal year, there's around 2.1 million tourists to arrive on Cyprus (statistics used from the 2011 World Economic Forum). From this group....roughly 131k German visit the island for at least a week. The UK carries the bulk of the tours, with almost a million Brits coming to Cyprus. If you figure a couple flying in, staying at a beachfront hotel, consuming a fair amount of beverage, and eating out for each meal, then riding tour buses or rent cars....there's probably around 1,500 Euro spent by each guest for their visit.
Getting upset and dumping onto the Germans for the long-term....probably isn't smart. But if you've been living for the past week on minimal cash and worried over your future....well, you've got some reason to whine.
What's left for this weekend? I suspect the big investors are screwed when a tax is implemented. They've lost their cash and will be determined to yank what they can out....within the next couple of weeks. Cyprus will save Cyprus, and it's citizens....but damn the Russians. It's a simple solution in the end, if you think about it.
It was a day of talk and discussion. The idea of the tax on account holders? It's back to the front, and probably the ultimate solution now. The Russians and their loan deal is off the table....period, no discussion.
The new talk? Well....this is mostly around the idea of the tax, but starting to center on the idea that anyone with a small account (100 Euro or less) might skip out of the tax entirely, and those with bulky accounts....end up with a twenty-percent tax. You can imagine the hostile nature of the Russian billionaires but since Russia wasn't going to help in the loan business....they aren't exactly a good buddy of Cyprus now. No love lost....would be a good term to use.
After almost a week, there's a number of signs being reported by various media groups that grocery stores and pharmacy operations are starting to suffer. You can buy anything....unless you show cash. In a modern society, you can't run a business operation on cash only....it just doesn't work.
From the Cyprus Mail (the better of sources for news on the isle)....the reports indicate Fridays chief accomplishment of splitting bank operations off into good banks (with small investors, 100k Euro or less) and bad banks (over 100k Euro). You as the customer....had no say in the matter, after they passed the bill into law.
The German angle today? There's a fair amount of hostility brewing within the public sector, with feelings that Germany is the stumbling block to achieving any solution. One of the comments came out of the bank employees at one location....talking up their point....."We are not Germany's slaves". It's hard to judge how this motivates everyone on the island about Germans and the amount of tourism that occurs.
In a normal year, there's around 2.1 million tourists to arrive on Cyprus (statistics used from the 2011 World Economic Forum). From this group....roughly 131k German visit the island for at least a week. The UK carries the bulk of the tours, with almost a million Brits coming to Cyprus. If you figure a couple flying in, staying at a beachfront hotel, consuming a fair amount of beverage, and eating out for each meal, then riding tour buses or rent cars....there's probably around 1,500 Euro spent by each guest for their visit.
Getting upset and dumping onto the Germans for the long-term....probably isn't smart. But if you've been living for the past week on minimal cash and worried over your future....well, you've got some reason to whine.
What's left for this weekend? I suspect the big investors are screwed when a tax is implemented. They've lost their cash and will be determined to yank what they can out....within the next couple of weeks. Cyprus will save Cyprus, and it's citizens....but damn the Russians. It's a simple solution in the end, if you think about it.
Thursday, March 21, 2013
Cyprus: Day Five (Friday)
Thursday has been mostly a day of limited accomplishments over the whole Cyprus affair.
The EU is basically saying that a decision has to be made, and that there's no real time left to wait this out. The dire warning? Basically four days....come to an agreement or just walk away from the EU Central Bank. For days now....they've flown in some cash and helped to keep the ATM systems operational on the isle.
Cyprus did agree today to restructure their number two bank. It would have probably dissolved next week, but this deal helps in some minor ways to delay their issues. On the flip side....if you had an account with them....you can only remove 260 Euro a day, max. Figure around $320 for an average American.
The odd thing about this restructure? Well....it looks like it's going to be two banks in operation. The one bank will handle the ensured accounts (everything below 100k Euro), and the other? The exposed folks who have no guaranteeing structure. It would allow the EU solution to fall into place and help the little guy in Cyprus to survive. The Russians? Well....you can guess their consequences here (lose, lose, lose).
There's a better and more in-depth report out there on natural gas discoveries. It's not a huge find, but there's billionaires to be made off it. The odd thing, after I spent five minutes reading the whole article.....it's not even going to be productive for another seven years. On top of that....you need someone with real cash to come in....take charge....build with easy access (no environmentalists in the middle)....and direct the whole operation. My impression from the whole article...is that Cyprus would like the billionaire a year rolling into their nation, but they really don't have the expertise to run this. You can sense that they'd like to keep this money on the island.
Oddly enough, there's a Dutch finance minister who came forward and kind of admitted he's the person who dreamed up the tax on accounts idea. It helps relieve the Germans of some heat, but it's still a nasty shock for folks on Cyprus.
Then there's this oddball idea....grab everyone's accounts....perhaps over a certain size, and just say they are now ten-year CD accounts and you can't really touch the bulk of your money. There would have to be some rules and some ways to remove part of your money, but it's a fairly interesting idea. Course, you'd be smart enough to ask if anything could get fixed in ten years or if any profit would ever come out of this ten-year forced CD deal.
For the German side? Just more speculation, more suggestions, more time passing by. The market is in a deep pit right now. The DAX was down around one percent for the day. It could have been a worse day, but for the whole week so far (up to Thursday)....the numbers are not great.
Finally, I have to mention this situation. On the isle, there's one slim border which splits the Greek Cypriots and the Turk Cypriots from each other. The Turks operate their side with about forty percent of the isle....the flat part of the territory. Some folks would argue, but the Turks probably got the better farming area when the border was established (mostly by threat of violence from both sides).
They may all be Cypriots, but each see themselves with a bloodline which leads either to Greece or Turkey. Each will claim a sacred view of the island.
For the last decade, there's been this amusing attempt to forge a united island. There's have to be various guarantees and issues to be worked out. The EU would like to see a united Cyprus. For the Turks, it'd help to bring them closer to being accepted into the EU, if an agreement could be worked out.
Today, a somewhat clever but limited plan was put on the table by the Turk Cypriots ....who have no banking issue. Turkey would step into this mess and hand the Greek Cypriot banking sector....seven billion Euro. The expectations? Pretty simple...come back to the 2004 unite-Cyprus plan, agree to pay back the seven billion (it's not a gift), and agree not to object to Turkey coming into the EU (a long desired thing).
This is a fresh new deal that most wouldn't have expected. The question is....of all the evil people at the table (in the minds of the Cypriot people)....who is the least evil....the Germans, the EU, the Russians, or the Turks?
For those who might be wondering how the split occurred? A Greek Cypriot will try to spend four hours telling you some long story of woe. The simple truth is that some Greek political folks got all peppy in the early 1970s. Seizing power on a united island seemed simple. Ordinary elections couldn't achieve what they wanted....so there was to be a coup. Word got out....the Turks (not the Turks on the island, but the country of Turkey)....just plain said they would not accept a coup and possible deaths of Turk citizens on the island. So Turkey brought in real military forces.....pushed Greek Cypriots back from the north, and created a line. Neither group can sit at the same table without telling a long story which is a fair bit of fiction. The truth is simple....the rest, well, you can guess.
For Friday? The Russians need to conclude their deal on the natural gas and put real money on the table. If nothing comes out of that....then the tax deal on accounts might come back or the Turk deal might be discussed. Come Sunday, the EU is expecting a final resolution, period. If you had to pick seven days to rock Europe....this has turned into a fairly interesting history and economics class.
The EU is basically saying that a decision has to be made, and that there's no real time left to wait this out. The dire warning? Basically four days....come to an agreement or just walk away from the EU Central Bank. For days now....they've flown in some cash and helped to keep the ATM systems operational on the isle.
Cyprus did agree today to restructure their number two bank. It would have probably dissolved next week, but this deal helps in some minor ways to delay their issues. On the flip side....if you had an account with them....you can only remove 260 Euro a day, max. Figure around $320 for an average American.
The odd thing about this restructure? Well....it looks like it's going to be two banks in operation. The one bank will handle the ensured accounts (everything below 100k Euro), and the other? The exposed folks who have no guaranteeing structure. It would allow the EU solution to fall into place and help the little guy in Cyprus to survive. The Russians? Well....you can guess their consequences here (lose, lose, lose).
There's a better and more in-depth report out there on natural gas discoveries. It's not a huge find, but there's billionaires to be made off it. The odd thing, after I spent five minutes reading the whole article.....it's not even going to be productive for another seven years. On top of that....you need someone with real cash to come in....take charge....build with easy access (no environmentalists in the middle)....and direct the whole operation. My impression from the whole article...is that Cyprus would like the billionaire a year rolling into their nation, but they really don't have the expertise to run this. You can sense that they'd like to keep this money on the island.
Oddly enough, there's a Dutch finance minister who came forward and kind of admitted he's the person who dreamed up the tax on accounts idea. It helps relieve the Germans of some heat, but it's still a nasty shock for folks on Cyprus.
Then there's this oddball idea....grab everyone's accounts....perhaps over a certain size, and just say they are now ten-year CD accounts and you can't really touch the bulk of your money. There would have to be some rules and some ways to remove part of your money, but it's a fairly interesting idea. Course, you'd be smart enough to ask if anything could get fixed in ten years or if any profit would ever come out of this ten-year forced CD deal.
For the German side? Just more speculation, more suggestions, more time passing by. The market is in a deep pit right now. The DAX was down around one percent for the day. It could have been a worse day, but for the whole week so far (up to Thursday)....the numbers are not great.
Finally, I have to mention this situation. On the isle, there's one slim border which splits the Greek Cypriots and the Turk Cypriots from each other. The Turks operate their side with about forty percent of the isle....the flat part of the territory. Some folks would argue, but the Turks probably got the better farming area when the border was established (mostly by threat of violence from both sides).
They may all be Cypriots, but each see themselves with a bloodline which leads either to Greece or Turkey. Each will claim a sacred view of the island.
For the last decade, there's been this amusing attempt to forge a united island. There's have to be various guarantees and issues to be worked out. The EU would like to see a united Cyprus. For the Turks, it'd help to bring them closer to being accepted into the EU, if an agreement could be worked out.
Today, a somewhat clever but limited plan was put on the table by the Turk Cypriots ....who have no banking issue. Turkey would step into this mess and hand the Greek Cypriot banking sector....seven billion Euro. The expectations? Pretty simple...come back to the 2004 unite-Cyprus plan, agree to pay back the seven billion (it's not a gift), and agree not to object to Turkey coming into the EU (a long desired thing).
This is a fresh new deal that most wouldn't have expected. The question is....of all the evil people at the table (in the minds of the Cypriot people)....who is the least evil....the Germans, the EU, the Russians, or the Turks?
For those who might be wondering how the split occurred? A Greek Cypriot will try to spend four hours telling you some long story of woe. The simple truth is that some Greek political folks got all peppy in the early 1970s. Seizing power on a united island seemed simple. Ordinary elections couldn't achieve what they wanted....so there was to be a coup. Word got out....the Turks (not the Turks on the island, but the country of Turkey)....just plain said they would not accept a coup and possible deaths of Turk citizens on the island. So Turkey brought in real military forces.....pushed Greek Cypriots back from the north, and created a line. Neither group can sit at the same table without telling a long story which is a fair bit of fiction. The truth is simple....the rest, well, you can guess.
For Friday? The Russians need to conclude their deal on the natural gas and put real money on the table. If nothing comes out of that....then the tax deal on accounts might come back or the Turk deal might be discussed. Come Sunday, the EU is expecting a final resolution, period. If you had to pick seven days to rock Europe....this has turned into a fairly interesting history and economics class.
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