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June 26th, 2012 
FAKE NEWS for the Zionist agenda - Bailout to cover budget deficit as well as banking sector
- Needs €1.8bn to recapitalise second largest bank
- Exposure to Greece has left island with limited funding options
By
Daily Mail Reporter
14:23 EST, 25 June 2012
|
15:41 EST, 25 June 2012
Cyprus has become the fifth eurozone country to apply to Brussels for an emergency bailout.
The tiny Mediterranean country is applying for funds for both for its banking sector, which has been hit by exposure to Greece and for its budget deficit.
The announcement means Cyprus would
follow Greece, Ireland, Portugal and Spain into the arms of the
emergency rescue funds set up for the 17-member euro currency zone.
Crisis: Cyprus has become the fifth eurozone country to apply to Brussels for a bailout
It has just four days left to raise at
least 1.8 billion euros – equivalent to about 10 per cent of its
domestic output – to satisfy European regulators about the health of
Cyprus Popular Bank, its second largest lender which saw its balance
sheet hurt by bad Greek debt.
Finance Minister Vassos Shiarly said the
country would also seek enough money to help with its budget deficit.
The full amount would be decided over the course of weeks.
‘The amount will be as much as it may be needed to cover the recapitalisation and fiscal requirements,’ he told Reuters. ‘These will be established after careful review during the next few weeks.’
With its coffers emptying rapidly and hurtling towards an immovable deadline, the island suffered a further sovereign credit rating cut on Monday by Fitch, to the non-investment, or junk, BB+ grade.
Cyprus has already been shut out from
raising new funds on capital markets, with yields on its existing bonds
well into double digits.
Cypriot President Demetris Christofias, The EU’s only Communist leader, has been reluctant to accept the fiscal and regulatory conditions that might be attached to a European rescue
Cypriot officials said the bailout request did not specify how much they need from their EU partners.
An
island with just 1 million residents, Cyprus has a disproportionately
large financial sector that is heavily exposed to Greece, a neighbour
more than 10 times the size with which it shares a language, culture and
close political links.
A
government statement said: ‘The purpose of the required assistance is to
contain the risks to the Cypriot economy, notably those arising from
the negative spill over effects through its financial sector, due to its
large exposure in the Greek economy.’
With a bailout widely viewed as all
but inevitable, Cyprus has for weeks been trying to juggle its options
between a bailout from Europe’s rescue funds – the temporary EFSF and
the permanent ESM – or a bilateral loan from either Russia or China.
Cypriot
President Demetris Christofias was scheduled to brief political leaders
on Tuesday afternoon, a statement from the presidency said.
The
EU’s only Communist leader, Christofias has been reluctant to accept
the fiscal and regulatory conditions that might be attached to a
European rescue.
As late as
this weekend, trips by government officials to China suggested Cyprus
was still holding out hope for a bilateral loan from a third country.
On Friday night Christofias spoke of ‘trying to avoid’ the mechanism.
Commerce,
Industry and Tourism Minister Neoklis Sylikiotis was dispatched to
China, where talks were focused on a loan or a Chinese investment in the
troubled Cyprus Popular Bank.
‘We have had some contacts… We have
requested an answer in coming days,’ Sylikiotis said in comments to the
state broadcaster hours before the government said it would be applying
to the EU.
Moscow already
provided Cyprus with 2.5 billion euros in a bilateral loan last year and
has an interest in maintaining Cyprus as an offshore financial centre
with low tax rates for Russian businessmen, who use it as a base to
reinvest in Russia.
Gloom: A commercial property lies vacant in the island’s capital Nicosia. Cyprus has a disproportionately large financial sector that is heavily exposed to Greece
However, seeking such large sums from
Moscow or Beijing is controversial in Cyprus, where EU membership is a
matter of national pride.
It could be embarrassing for Brussels as well, as Cyprus assumes the bloc’s rotating presidency on July 1.
Cyprus
is fiercely protective of a corporate tax rate that is one of the
lowest in the EU, and eight months before a general election shows no
appetite for the stringent spending cuts likely to be demanded in return
for EU funding.
Christofias has repeatedly said any economic measures would not further impact ‘the workers’.
The European Commission has
repeatedly urged Cyprus to take measures to cut its deficit below 3.0
percent and increase the competitiveness of the economy.
The
government says it is in the process of implementing such steps and
targets a deficit of about 2.5 percent of GDP this year.
Cyprus
is fiercely protective of a corporate tax rate that is one of the
lowest in the EU
‘The main source of concern is the bank recapitalisation, but given that the European Commission is coming out quite strongly about excessive imbalances in the Cypriot economy one would expect them to look at that too,’ said Michalis Florentiades, head of economic research at Hellenic Bank.
Cyprus Popular needs a capital infusion urgently to satisfy regulators after writing off the value of Greek government bonds in a sovereign debt swap earlier this year.
In its report, Fitch said the recapitalisation bill for Cypriot banks could potentially reach 4 billion euros.
That amount, equivalent to 23 percent of GDP, would also take into account rising non-performing loans from the domestic market.
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Cyprus is a country in its own right ?? I was taught that the North was part of Turkey and the South was part of Greece.
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No sympathy. They hitched themselves to a basket case {albeit an historical one} then concreted over their beautiful island, slabbed it with tarmac and allowed the Russian Mafia to run amok. Why was this island allowed to join in the first place, they’re in the Middle East anyway!
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Is the Euro meltdown underway
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Does this bail out include the whole island ,bearing in mind that turkey rules half the island ?
– A Native englishman
Ummm, no, the independent Turkish cypriot north is not part of the EU,nor is Turkey.
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Where will this all end. The civilised world has to much and expects too much
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The euro is dead good riddence….it is only a matter of time now….
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It’s only a few days since our government, who are supposed to be looking after our interests, allowed the Bank of Cyprus to transfer the bank safety net from the Cyprus government to the UK government for british based savers in the Bank of Cyprus. This means that if the Bank of Cyprus is unable to repay the savings of many thousands of mainly British based Greek Cypriots saving with them, then the British taxpayer will have to do so. And of course, why would the Bank of Cyprus pay back British based savers when the British tax payer has been passed the baby? I hope you all enjoy bailing out the Bank of Cyprus customers. Thank Dave for it.
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The unelected leaders of the EU Dictatorship are willing to bankrupt the whole of Europe so as to continue their dream of an ever expanding European Empire, ruled by them and paid for by us.. Now their euro is failing they want us to keep that going as well. We have been letting them control us for too long, helped by our traitor leaders in Westminster, and no way do we want Cameron to be giving over our money for these constant euro bail outs. It is time to get out of the EU Political Union, which we never gave our consent to be part of in the first place, and were tricked into thinking we would be trading only with them. We have allowed ourselves to be mugged for long enough, and have thrown away hundreds of billions we could have used here. We will never prosper shackled to the EU Dictatorship.
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“Recapitalise” actually means replace the money that the bankers have lost, ensure their bonuses and guarantee all their bad debt at the expense of the taxpayer. Bankruptcy would mean redundancy for the useless bankers and no bonuses to pay. The bad debt would get written down or moved to a “toxic” holding vehicle, the good debt could be sold on, and the savers could be compensated from the good debt sales and bonus saving. All in all, a cheap and effective solution, that would have the added benefit of scaring the pants of the bankers who are left. Who knows, they might even start to take things seriously again !
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Are we all not getting sick tired of hearing this? This crisis is crippling the World. Most of the human population on Earth are suffering because we don’t have enough money. It’s pathetic. Suffering happens because of a man made thing.
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