Thursday, March 21, 2013

ECB Gives Cyprus Until Monday

The European Central Bank raised the stakes in the Cyprus crisis on Thursday, telling Nicosia it had until Monday to agree a bailout with the EU and International Monetary Fund or it would cut off emergency liquidity provision to the country’s banks.

From the FT:
The ultimatum came as EU leaders maintained pressure on Nicosia to come up with a new plan on its own and Russian prime minister Dmitry Medvedev told a visiting European Commission delegation that a solution had to include Russian participation.

“It is now up to the Cypriot authorities to come up with proposals,” Jeroen Dijsselbloem, chair of the committee of 17 eurozone finance ministers who negotiated the bailout, told the European Parliament on Thursday morning.

In a short statement the ECB said its 23-person governing council had agreed to maintain emergency liquidity provision to Cyprus’s banks until Monday. “Thereafter, Emergency Liquidity Assistance could only be considered if an EU-IMF programme is in place that would ensure the solvency of the concerned banks,” it said.

The country’s two biggest banks, Bank of Cyprus and Laiki, are believed to be reliant on Emergency Liquidity Assistance provided by the Central Bank of Cyprus. The ECB’s governing council can terminate ELA if it believes the banks receiving it are no longer solvent.

The move, however, raises the prospect of the ECB having to make good on its ultimatum on Monday, which could leave the banks unable to honour their obligations. Some analysts have speculated that the collapse of the banks could trigger a series of events that lead to Cyprus leaving the euro, with unpredictable consequences for the rest of the eurozone.

The best thing that could happen to Cyprus is that they default on their sovereign debt and escape the clutches of the banksters by leaving the eurozone. Will they have the courage to do so?


Reuters reports that:

 Euro zone finance officials acknowledged being "in a mess" over Cyprus during a conference call on Wednesday and discussed imposing capital controls to insulate the region from a possible collapse of the Cypriot economy. 
In detailed notes of the call seen by Reuters, one official described emotions as running "very high", making it difficult to come up with rational solutions, and referred to "open talk in regards of (Cyprus) leaving the euro zone".


  1. Is it possible the IMF/EU actually wants Cyprus to burn? Seems like this unnecessarily short fuse is going to cause political chaos at a minimum, if not push the Cypriot politicians directly into the hands of the Russians. What in the world is going on here?

  2. No one would have ever guess it would be Cyprus that caused the Euro house of cards to come crashing down.

    Let's hope Cyprus with Russian help want to stick it to the ECB worse than they want to remain in the Euro.

  3. Destined to go down in history as the world's longest announced bank robbery.

  4. You are watching the death throes of the EU. Everyone now knows that there is no bringing it back, and what you see is simply the ongoing holding action that attempts to forestal the inevitable. In the process, many will get trampled, and when the beast finally falls it will take everything with it. Thus go the dreams of world domination and control - "full of sound and fury, signifying nothing".

    When this morality play finally ends (the fat lady is now singing), the system will implode. The players will be packed off to jail or executed based on crimes committed, and the world can start to rebuild. They want you to believe it will be the end of everything, but like nearly all they say, it is a lie. This should frighten no one. It is the best and only possible outcome. It will be difficult at times, but we will finally be rid of the central planners - the scourge of mankind - and be able to take back control of our own lives. We CAN do this.

    I, am Spartacus