tag:blogger.com,1999:blog-36227136.post3232231164651772842..comments2024-01-16T08:40:53.682+00:00Comments on <a href="http://www.openeurope.org.uk">Open Europe</a>: While everyone is speculating about contagion to other eurozone countries: What are the Italian and Spanish press actually saying about the Cypriot bailout? OEhttp://www.blogger.com/profile/00556463374230498875noreply@blogger.comBlogger14125tag:blogger.com,1999:blog-36227136.post-74975434544436143612013-03-19T22:43:28.606+00:002013-03-19T22:43:28.606+00:00"Franz Joseph was well & truly deceased b..."Franz Joseph was well & truly deceased before the rest of the world woke up to the implications of his assassination."<br /><br />Not that it's important, but it was Franz Ferdinand that was assassinated. Franz Joseph died in 1916 at the age of 86.jon liveseynoreply@blogger.comtag:blogger.com,1999:blog-36227136.post-13649172861580367252013-03-19T17:18:10.467+00:002013-03-19T17:18:10.467+00:00Franz Joseph was well & truly deceased before ...Franz Joseph was well & truly deceased before the rest of the world woke up to the implications of his assassination. Most, except we who keep up on such things, are not aware of where Cyprus is let alone the policies that will exacerbate this crisis. Initial reaction will be from the informed but it will be some time before the average man on the street realizes what's happening.Anonymoushttps://www.blogger.com/profile/12547629279458778775noreply@blogger.comtag:blogger.com,1999:blog-36227136.post-83632775366760107342013-03-19T15:18:55.077+00:002013-03-19T15:18:55.077+00:00The worlwide asset declaration dictate joined at t...The worlwide asset declaration dictate joined at the hip with the equaly bizarre anti fraud laws just introduced in Spain may cost,at least the expat community, more than those holding accounts Cyprus must surrender for the joys of living in the Club Med zone. The Spaniards with assets outside Spain for their part are totally ignoring the complex demands for sensitive personal data, in conflict with EU norms to be revealed to the Finance Ministy's tax and money grabbers,just as they ignored the recent "come clean" amnesty. Interesting that the region and city with almost the lowest credit ratings in Spain are this evening about to burn, literally, in the name of culture some €10-15 million in the form of the noisy and polluting Valencia fallas which started not solong ago as a routine spring time house cleaning.Charles Fitzhughnoreply@blogger.comtag:blogger.com,1999:blog-36227136.post-90339083132345244062013-03-19T13:28:44.849+00:002013-03-19T13:28:44.849+00:00It must be at least 6 months ago that I read of ma...It must be at least 6 months ago that I read of major international companies moving all but working capital out of euro banks. Indeed, those in charge of such companies are (a) by defintion, not thick and (b) under a fiducary duty to their shareholders to avoid the sort of risk that is now evident.<br /><br /><br />IDRISnoreply@blogger.comtag:blogger.com,1999:blog-36227136.post-74816186843186075702013-03-19T11:47:15.912+00:002013-03-19T11:47:15.912+00:00Even more important is how Dimitry Medvedev the Ru...Even more important is how Dimitry Medvedev the Russian Prime Minister has compared the European Union's actions to what used to happen under the old Soviet Communism. "This practice, unfortunately, was very well known and is familiar to many Russians from the Soviet period, when money was exchanged with coefficients and never returned. But Cyprus is a country with a market economy, a member of the European Union. The move "looks just like confiscation of people' money."<br />Another great triumph for the decadent EU - to be compared with Soviet Communism - and by those who suffered under it!<br /><br />Rodney Atkinsonhttp://www.freenations.freeuk.comnoreply@blogger.comtag:blogger.com,1999:blog-36227136.post-70277870355569382032013-03-19T11:28:51.784+00:002013-03-19T11:28:51.784+00:00If you had a Euro deposit saved in a Spanish, Port...If you had a Euro deposit saved in a Spanish, Portuguese, Greek, Italian bank, would you leave it there? Or would you open an account in Germany or Luxembourg or Finland and move it there? I would.Rollohttps://www.blogger.com/profile/18255460090580758354noreply@blogger.comtag:blogger.com,1999:blog-36227136.post-31785019610133285952013-03-19T06:45:22.129+00:002013-03-19T06:45:22.129+00:00@OE and Jon.
Imho you cannot be that sure about th...@OE and Jon.<br />Imho you cannot be that sure about that. For the following reasons:<br />-Probably Italy and Spain going for a bail out/rescue will be seen by many as the end of the line (last major rescue).<br />Which means there is a lot more room to do things. Unless Hollande keeps tanking France further of course.<br />-There is not enough money to rescue Spain and Italy extra funds have to be found somewhere. Very doubtful if it will be the Northern taxpayer.<br />-Average wealth per Italian is probably double that of that of the average German. Makes it nearly impossible to sell.<br />-Cutting bankaccounts is an ideal way to stop real contation (as opposite to contagion in confidence), the bug stops before the border with senior bonds that is not the case.<br />-Btw both countries need to do something on their bankingsector Spain a lot more than Italy. But neither one has the money for it.<br />Seen from that angle it might be something to consider at least.<br />More likely is a bail in PSI of bondholders like in Greece imho. Only as it is shown there the bankingsector and the government are via armtwisting so linked that cuts or recaps end up on the government's BS one way or another. And subsequently will require a PSI there at one point in time (probably earlier) and likely an OSI as well.<br />Looks nearly certain that we will end up with 150ish or something like that debts which are clearly unsustainable. <br />Donot see the IMF accepting that anymore as well. They run into the Greek trap but that was likely the last one.<br /> <br />In that situation it is more logical to tax the locals next to senior bondholders (junior will likley be wiped out (If Holland does that at home forget that they will agree to keep them alive in Spain (politically unsaleble). (also according to MMT (where it is more or less an assumption) of which I am not a real big fan btw).<br /><br />Re bankruns. It is hard to see how anybody can keep lots of savings with a Spanish or Italian bank. There is simply a lot of downside risk and very little or no upside.<br />Any sensibel person should bring savings (not workingcapital) outside the country.<br />However a lot of them didnot do it before and the situation wasnot much better. So it looks like most will blow over. <br />However I expect multinationals as far as they donot already go Greek andkeep as much as possible out. Would be terrible PR if they got caught in a Cyprus, their CFO would look like a complete idiot, relying upon politician's promises.Riknoreply@blogger.comtag:blogger.com,1999:blog-36227136.post-28019192975608185972013-03-18T19:01:22.635+00:002013-03-18T19:01:22.635+00:00@jon livesey
Thanks for the comment. Just to poin...@jon livesey<br /><br />Thanks for the comment. Just to point out (as we have updated in the text) we do not believe the deposit levy will be repeated in Spain or Italy - we were not referring to the possibility of a bank run. We completely agree that bank runs remain a possibility in struggling countries such as these two. It would take something significant to cause them but with Spain's shaky banking system you are correct to point out that it is not impossible. It will of course depend on a number of issues, not least the role of the ECB and other eurozone countries.Open Europe blog teamhttps://www.blogger.com/profile/14476470353790515912noreply@blogger.comtag:blogger.com,1999:blog-36227136.post-31648239873576828272013-03-18T18:48:34.817+00:002013-03-18T18:48:34.817+00:00"There's no way this will be repeated in ..."There's no way this will be repeated in Spain or Italy, so it's not clear when the great bank run is supposed to take place."<br /><br />I am not sure if you are joking here, but the answer if pretty clear. Bank runs will happen - in Spain, for example - when Spain's Banks look as weak as those of Cyprus.<br /><br />When will that happen? It will happen when Spanish house prices fall as much as Irish ones have fallen, and when all the Spanish developer loans that are going to default do default.<br /><br />At that point, Spain will be forced to line up for a bailout, and at that time people will remember what happened in Cyprus, and act accordingly.<br /><br />And all the elegant sarcasm in the World won't stop it.jon liveseynoreply@blogger.comtag:blogger.com,1999:blog-36227136.post-12641607962880017092013-03-18T17:40:06.905+00:002013-03-18T17:40:06.905+00:00It's all well and good that Italy and Spain ar...It's all well and good that Italy and Spain aren't (over)reacting today, but the seizure of 9.9% of Russian billionaires' accounts in Cyprus will likely see a rather strong backlash in Moscow. If Putin acts true to form, seizure of EU nation's accounts and levies to repay the billionaires therefrom is not a completely outlandish prediction.Stephenhttps://www.blogger.com/profile/02988018648403707235noreply@blogger.comtag:blogger.com,1999:blog-36227136.post-48944586582219218952013-03-18T17:32:05.486+00:002013-03-18T17:32:05.486+00:00Its a holiday where I live in Spain so the banks w...Its a holiday where I live in Spain so the banks were shut for today and tomorrow. However, Sunday I emptied half my current account and today another quarter but no evidence of a run. On Wednesday I'll be cashing in my modest savings as they aren't giving me any interest of note. Its just a precautionary measure but I don't trust banks and I don't trust governments especially after recent events.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-36227136.post-32813612348847923902013-03-18T17:18:58.656+00:002013-03-18T17:18:58.656+00:00And when the Spanish and Italians see what happens...And when the Spanish and Italians see what happens when Cypriot banks reopen? When the bank run really starts?<br /><br />It's madness to start a bank run but rational to join one.BlackBobnoreply@blogger.comtag:blogger.com,1999:blog-36227136.post-65300975382453787252013-03-18T16:59:13.703+00:002013-03-18T16:59:13.703+00:00There is no immediate reason why people will be qu...There is no immediate reason why people will be queuing at ATMs today in Spain. But it just shows everyone that savings are no longer safe when bailouts are being discussed by their politicians. They were lied to by their politicians in Cyprus, after all. So I'd expect anyone who can to move their money into a safer form as prevention. So a drawn out draining of capital rather than a bank run.Jimnoreply@blogger.comtag:blogger.com,1999:blog-36227136.post-73320204905863427422013-03-18T16:30:06.884+00:002013-03-18T16:30:06.884+00:00I think that before you got to the point of large ...I think that before you got to the point of large numbers of ordinary people queuing at ATMs to get some cash out while there was still time you'd have a much smaller number of people electronically transferring larger sums of money from their local accounts to their accounts in safer countries. Of course to do that quickly they'd have to be prepared with those foreign accounts already set up.Denis Coopernoreply@blogger.com