EUCOM Economic Analysis - Part I

[Firn]

The Telegraph live-blogs the events following the Guardian model.

18.23 Apparently they voted with a show of hands.

18.16 So they voted after all. And surprise surprise, the bank levy bill has been defeated. There were 36 votes against, and 19 abstentions. One MP didn't even show up. Cyprus's parliament has 56 seats.

So they said no. Very bad news indeed, especially for the man on the street, may he or may he not carry a shield crying murder. The banks should not open anytime soon.

I appreciate that things are hectic and if many twitter and talk there must be some pretty idiotic stuff among it:

Germany might be telling the world not to blame it for Cyprus' bailout plan, but one analyst told CNBC that Russia could avenge the loss of billions of dollars it has invested and deposited on the island by cutting Germany's energy supply.
...

On the other hand it is different if you hear something like that:

15.05 Former governor of the Cypriot central bank, Anthanasios Orphanides has launched an powerful rebuke towards Cyprus's European creditors, branding their actions tantamount to blackmail. Speaking to Bloomberg TV, he said:

Decisions like this, much like the decision to haircut Greek debt in October 2011, actually benefit some countries. For example as we’ve seen from markets yesterday a decision like this reduces the financing costs for the German government so the German government can now borrow at negative rates as a result while it inflicts pain on other countries. Not everybody is equal under the law the way European governments are behaving these days.

Such talk is quite dangerous and during the last years I would have been quite glad if some would have said not a single word. He was the fromer top guy of the CCB when the bank secto got out of control and dirty money was pouring in. It happened on his watch and just like terrible governments at home brought us into a mess with few good alternative the Cypriotic leader did shovel their island their own hole. They made themselves dependent on help and goodwill of others which they squandered by doing nada of what they had asked them.

Let us see the offical stance of France:

"The rates could be different and could protect deposits under 100,000 euros, we are waiting for that and we are ready for that," French Finance Minister Pierre Moscovici told CNBC on Tuesday.

"There was a huge problem in Cyprus, nobody can deny that - with a banking sector which was absolutely enormous, with some advantages which were huge too and a lack of transparency- we had to address that, that's what we're doing,"

In short so far: Do what you want but you have to collect enough money to pay your part of the bailout.