Cyprus Says F*ck You Eu/imf

[Gromit]

Now Looking to the Russians for help.

Great place for a Russian military base.

Has the EU under estimated Cyprus, and the Russian hand underpinning its banks?

[youngmafbog]

You could be right there Jake.

The problem is I dont think it is certain either way what would happen to Cyprus if they came out the Euro or the EU. They could end up funded and cushioned from the expected fall which would backfire as any warning.

We are dealing with the unknown here and IMHO dangerous territory for all of us because like it or not we are affected by the EuroZone.

[Gromit]

Strange Answer New Judge, can't say I agree with any of it.

Cyprus' problems are due to the EU's solution to the Greek Financial Crisis.

// EU leaders thought that it would be a good idea to "solve" the fiscal problems of Greece by making private bond-holders "agree" to a "voluntary" write-down of the value of its debt- The problem is that one institution's debt is another's asset, and with Cypriotic banks heavily invested in Greek debt due to Cyprus' close ties to Greece, this meant that Cypriotic banks made heavy losses. In short, the "solution" to the Greek problem caused the Cypriot problem we're now discussing. //.

In short, the Cypriot bankers put all their money into Greek Bonds and then the EU devalued them. Nothing to do with currency conversion rates or EU membership, more to do with bankers getting their bets wrong - again.

[New Judge]

Yes we are and we will continue to be so affected so long as the flawed single currency exists in its current for. It is not only us. The global economy is influenced to a considerable degree shilst this ridiculous project continues. But more important than that is that individuals throughout Europe are suffering various degrees of uncertainty and hardship. This is being prolonged by the prevarication of politicians and their refusal to accept that the euro was probably the single biggest political blunder since WW2.

[ichkeria]

Sorry to bang on about the Russian aspect, in turn, but i don't think it is smoke and mirrors. In fact, arguably it's the Euro crisis which is the smoke and mirrors and the real problem is the laundering issue I mentioned earlier.

[jake-the-peg]

The Russian aspect isn't smoke an mirrors if indeed there is large amounts of Russian money squirreled away in there.

Seems to me Nicosia is betting the Russians won't want to see those banks go bust with all their money in there and would rather cough up bail out money than see it all go down he tubes.

They're running out of options

We are in unknown territory but I can't see what sort of cushion YMB is envisioning in the case of a default and Euro Exit.

Ask yourself this - if that were to happen would you push your money into the new Cypriot Pound?

[New Judge]

No, jake, Few people would. Nor would they if Greece readoted the Drachma. But they would have continued to invest in Cyprus had they retained the Pound. For Cyprus the damage is done. The answer is not to simply use other people's cash to "bail them out". They have fundamental problems which need addressing. They should not have joined the euro and certainly should not have done so at the exchange rate they did. And I do accept that their exposure to Greek debt played a big part in their current problem (which I acknowledged in the earlier question I referred to).

But Cyprus would not have suffered this ignominy had it not joined the single currency. It would not have bought Greek debt. It would probably not have attracted “Funny” money. Its economy would not have expanded beyond its means. It would not be using a currency which it cannot afford. It’s delusional to believe that Cyprus’s problems are caused by anything other than the single currency. How many more lesser members of the Euro zone have to go down the kharzi before this simple fact is recognised? Is it pure coincidence that the nations which are experiencing difficulties are all countries which, if the facts are examined objectively, should never have been allowed to share a currency with Germany?