What is Sovereignty when you are in the EU?

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Offline the leveller

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What is Sovereignty when you are in the EU?
« on: March 30, 2013, 07:48:17 PM »
From: Ian

 Sovereignty? What is Sovereignty when you are in the EU? Talk to the hand!
 After reading this memo from the Central Bank of Cyprus sent to bank CEOs on February 11, arguably to put them at ease, all we can say is "Oooops"...

We'll ignore the contents of the memo, including such statements that "restricting the property rights of depositors" is unconstitutional - that is after all for the people of Cyprus to opine on (we did however have a hearty laugh upon learning that there is a European Convention of Human Rights),
As for the FT article referenced? The following, from February 10, which references a "confidential memo" which foretold the events from two weeks ago with absolute precision :

A radical new option for the financial rescue of Cyprus would force losses on uninsured depositors in Cypriot banks, as well as investors in the country?s sovereign bonds, according to a confidential memorandum prepared ahead of Monday?s meeting of eurozone finance ministers.


 The proposal for a ?bail-in? of investors and depositors, and drastic shrinking of the Cypriot banking sector, is one of three options put forward as alternatives to a full-scale bailout. The ministers are trying to agree a rescue plan by March, to follow the presidential elections in Cyprus later this month.


By ?bailing in? uninsured bank depositors, it would also involve more foreign investors, especially from Russia, some of whom have used Cyprus as a tax haven in recent years. That would answer criticism from Berlin in particular, where politicians are calling for more drastic action to stop the island being used for money laundering and tax evasion.


 Labelled ?strictly confidential? and distributed to eurozone officials last week, the memo says the radical version of the plan ? including a ?haircut? of 50 per cent on sovereign bonds ? would shrink the Cypriot financial sector, now nearly eight times larger than the island?s economy, by about one-third by 2015.


 Senior EU officials who have seen the document cautioned that imposing losses on bank depositors and a sovereign debt restructuring remain unlikely. Underlining the dissuasive language in the memo, they said that bailing in depositors was never considered in previous eurozone bailouts because of concern that it could lead to bank runs in other financially fragile countries.


But the authors warn such drastic action could restart contagion in eurozone financial markets...


So far the contagion has been mostly contained, courtesy of epic intervention on behalf of the BIS to keep the EUR stable for the past two weeks. Once again, we doubt this will persist.

At least at this point we know that a Cyprus sovereign debt haircut of 50%, which is noted on the memo as the missing piece to the "sustainability" puzzle, is next.

In the meantime, dear citizens of the world, please enjoy as your central bankers lie to you each and every day, and never forget that everything is under control.
Courtesy of SigmaTV, h/t John Johns, and Yiannis Mouzakis

« Last Edit: March 30, 2013, 07:52:13 PM by the leveller »


Offline the leveller

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Re: What is Sovereignty when you are in the EU?
« Reply #1 on: March 30, 2013, 07:56:15 PM »
Date: Saturday, 30-Mar-2013 07:08:01

Confiscating the customer deposits in Cyprus banks, it seems, was not a one-off, desperate idea of a few Eurozone ?troika? officials scrambling to salvage their balance sheets. A joint paper by the US Federal Deposit Insurance Corporation and the Bank of England dated December 10, 2012, shows that these plans have been long in the making; that they originated with the G20 Financial Stability Board in Basel, Switzerland (discussed earlier here); and that the result will be to deliver clear title to the banks of depositor funds.

New Zealand has a similar directive, discussed in my last article here, indicating that this isn?t just an emergency measure for troubled Eurozone countries. New Zealand?s Voxy reported on March 19th...

...The 15-page FDIC-BOE document is called ?Resolving Globally Active, Systemically Important, Financial Institutions.? It begins by explaining that the 2008 banking crisis has made it clear that some other way besides taxpayer bailouts is needed to maintain ?financial stability.? Evidently anticipating that the next financial collapse will be on a grander scale than either the taxpayers or Congress is willing to underwrite, the authors state...

Read more: at Namaste Publishing:


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