>Srdjan, if you're out there, could you provide a local's view of the ongoing events?

Well, usual. Politicians + Banxsters created financial catastrophe and now game is up for someone else to pay the bill.
Since we do not have luxury of QE1,QE2 .... QEn (selling green paper for real goods {g}) country is indeed on the verge of financial collapse.


What happened is following;

At first Cyprus grossly over sized banking sector ( 'only' 8X GDP) got into trouble by being forced to take big haircut on Greek bonds
(they were to small of a shark to get their money back next to far bigger US/EU (loan)sharks when Greece was bailed out)
In the meanwhile (normally solvent !) Cyprus government got themselves into debts in last 5 years due to post 2007 economic crises but foremost because of bad (ok, ok left wing! {g} ) government.

So now they need 17 billion bailout loan. From that, (questionably high) 12-13b amount would go for recapitalizing banks (as per EU
requirements) and 3-4b for government needs. Securing that loan would be normally business as usual, if it was for some bigger country, but since Cyprus is small and considered less important in macro-economic terms (and possibly some past issues with EU), EuroGroup and 'Troika' insist on giving only what is considered sustainable debt which is 10-11 billion euro, whereas they are requiring remaining amount to be raised locally (5.8 billion) as CAPITAL rather then debt. (Otherwise they would just grant 17b)

And this is where all hell broke lose!
This time they (both local politicians and so called 'troika') outdid themselves in stupidity and created worldwide financial mess
by attacking for the first time in western economic history actual money deposited in bank accounts!
No less then 'Levy' on all deposits ranging between 3 and 15% ! (or communist style confiscation as some see it) and there you have it!

People naturally got furious, parliament then 'bravely' rejected the bill it and everything is back to square one.
Then FM goes to Russia for help, EuroGroup stays firm, bluffs , scuffs and the rest is what you are watching on the news.


This whole thing created massive damage over almost meaningless (in Euro terms) amount of 5.8B that they were arguing about originally. Not so much for world stock markets that you are concerned about in particular (just some jitters), but more on long terms confidence/stability. Nobody can now guarantee that we will not see bank-runs in Europe in some future EU bailout (Italy,Spain etc) ,
and it is almost guaranteed that we will have bank-run here in Cyprus when banks reopen next week.
(Banks are closed til solution is reached...) Besides that, Cyprus as regional financial services center is now very likely history.
(Who would ever come and invest money if deposits are not safe ?). So despite offering the loan as help, Europe basically asked Cyprus to commit no less then financial suicide.

Whoever geniuses came up with this idea (not sure who did exactly!) with bank deposits, should be fired at the spot if not worse!

I am not sure exactly what is the game behind all this, but it is sure very dangerous. (Wish it was stupidity only!)
Bare in mind that there are large reserves of natural gas that were found around Cyprus some time ago, then there are piles of Russian money that came here in the past (hence oversized financial sector), then there is story about Russian gas supplies to Europe, then Syrian crises in the neighborhood etc. God knows what is happening behind the scenes right now.
(I really wander what will be reaction of those hardened Russian mobsters if they indeed impose 15% 'levy' on their hard earned millions... 'Shhto sluchillo tovarrisch? I cannot transfer ALL of my money to HSBC ?? ' {g} )

FWIW Cypriots alone are not only to be blamed, but we sure have big responsibility in terms of letting our politicians&banxters screw us up this bad. One thing is sure which is that there will be huge price to pay for all this.
We already do quiet a bit (increased taxes etc) but it will get lot worse. I would LOVE to see some local banxters who did the
screw-ups and officials who failed prevent them (past bank governors / FMs for instance) to be prosecuted,
but (just as it did not happen in US back in 2007 {g}) I highly doubt anybody will pay any price.

Except for us, ordinary people that is. :(
While everything else is doom, gloom & disaster right now, that is about only thing that is business as usual.