Monday, 18 March 2013

Cyprus bank raid burns on

There is a lot of finger pointing going on after the Eurocrats shot themselves in the foot over the decision to help themselves to Cyprus bank depositors money. Most of the fingers are pointing at the Germans. The FT headlines today, "Russia attacks Cyprus bail out plan" with Comrade Putin putting the tanks in. I don't know if he personally has any Euro deposits in Cyprus but I am sure some of his pals have. Their editorial is headlined, Europe (surely EU is more accurate) botches another rescue, strong words from the rabidly pro EU pink un. The Cypriots have postponed their crucial vote by another 24 hours. Meanwhile all the bank ATMs on the island have run out of money. Watch what happens tomorrow, Tuesday, when the Cypriot banks reopen. Will the ATMs have been refilled?

There could be quite a lot of angry people outside Cyprus bank's ATMs tomorrow demanding their money. I have always thought the Euros fate would be settled in blood on the streets. Possibly it might be outside a cashless ATM! A bit like Dr Who taking on the Daleks

The FT is not alone of the EU lovers sadly disappointed by their beloved's latest failure. Sharon Bowles Lib Dem MEP, flame haired chairperson of the EU finance committee on today's Daily Politics described herself as incandescent at what the EU had done. Click on link to watch the first 10 mins of this revelation.

Ms Bowles gave some honest answers, staggering coming from a Lib Dem, when Jo Co asked her why this trick had not been used in the EU Irish bailout she replied the Irish banks were mainly bond financed not deposit financed like the Cypusu bands and that as the bond holders were mainly Germans they were untouchable! Wow! Allister Heath described this Germanic bullying of a little country as sordid and to her credit La Bowles did not demur. German real politick has not changed since the days of the Kaiser.

La Bowles then went on that rules had to be obeyed etc. Where has she been these last 20 years? EU rules are applied to the little countries and sympathetically intepreted for France and Germany. That is the EU way, always has been and always will be.

Allister Heath made the excellent point that the EU had put huge emphasis on their wonderful deposit insurance so that deposits up to 100000€ were 100% guaranteed. Not so it seems if you live and bank in Cyprus. La Bowles was clearly shaken. What will they do next she whinged. Quite.

The real confidence sapping effect of this cock up will take some time to come home to roost as people realise the dangers of keeping their money in EU banks particularly Club Med ones. Just as in Greece the noney will drain to Switzerland, Singapore and even the UK if Dave does not do his usual Europhile Act. The result will be that the Eurozone will sink yet further into the slough of despond except of course for the political elite. You could not make it up.


ALAN WOOD said...

whatever happened to the old days when a company (i.e. bank) goes bust and the administrator sorts out the leftovers ?

Putting your money in a private bank involves risk.

We seem to have a growing culture where a person's problem is paid for by everyone else. Have a baby -nursery fees will be paid for by taxation of everyone else.
Make a bad choice of bank - everyone else pays.

Can't get pregnant - have some free IVF with my taxes !

The balance between "laissez-faire" and "extreme socialism" veers from "laissez-faire" in communist China to "extreme socialism" in the "democratic" West.

How confusing is that !

The obvious solution is to let Cyprus take the hit as a lesson to all stupid companies and greedy investors (Bank of Cyprus did offer top rates of interest).

But the EU can't allow that !

Eric Edmond said...

Its another Iceland, I presume all your dosh now runs on 4 legs.

ALAN WOOD said...

My mare SASHEEN was "covered" today by the great stallion SCHIAPARELLI who won the German Derby and had produced his first crop in 2012, said to be "athletic" like himself.

Shares in SASHEEN and her potential foal are only £475 for the year ended March 2014 and £600 in FY 2014/15. Better chance of a dividend than shares in the FTSE if Labour get elected.

And you get free tickets, free car park,free programme and free company with me at the races in 2016.

Tell me a better deal than that !

Eric Edmond said...

Ask NF to buy a share.

Eric Edmond said...

Ask NF to buy a share.