It turns out it all goes down the tubes on Cyprus of all places.
And really, let’s be honest, no one would have guessed Cyprus if you’d ask them last year. Everyone and their brother would have put the end of the Eurozone due to Greece, Spain or possibly even Italy.
But not Cyprus.
And now the EC is going to screw this up even more, which is truly impressive if you think about it.
From the FT: “a revised deal being discussed in Nicosia, with the blessing of the European Commission, would shift more of the burden on to deposits larger than €100,000, according to officials involved in the talks. Under a controversial deal struck with international bailout lenders in the early hours on Saturday, a 6.75 per cent levy would be imposed on all deposits under €100,000 while accounts over that threshold would be hit with a 9.9 per cent levy. The depositor levy was demanded by a German-led group of creditor countries to bring down the bailout’s price tag from €17bn…. Officials involved in last night’s talks said the changes in the levy’s rates were in flux, but they could see the higher rate increase to as much as 12.5 per cent while the smaller deposits could be about 3.5 per cent.”
Ah yes, let’s back up a step.
It was announced over the weekend that as part of getting “saved” by the EC, Cyprus would get some cash. Oh and they would have to go back on their promise of making depositors whole by “taxing”, ie stealing, various amounts depending on the amount in the bank at the time.
As various pundits here in the US have said, the markets don’t like uncertainty. So that is exactly what the geniuses in Brussels have decided to do.
They’ve bolloxed the situation by showing that no depositor is safe in the EU. No one. Not anywhere. They claimed this is a one time emergency but really, when it comes to money grubbing pols, there’s never just one time. There’s just the first time.
And to make things worse, after rightfully getting pummeled this way to next Tuesday, it seems they’re going to adjust the amount they take. Please don’t. Now you’re just going to confuse the situation. It’s a bad situation. I’m amazed that they’re going to make it worse by muddling what’s going on by changing how much they steal.
Really, these guys in the EC make the keystone cops and the Washington Generals look world class. Can’t wait to see the flight to treasuries and how everyone leaps out of the Euro. At least it’ll make Monday interesting.