Cyprus Banks Closed Until Thursday; "Solution is Feasible, Can Be Extrapolated to Spain", Says Spanish Economist; Lies of the Day
Mish Moved to MishTalk.Com Click to Visit.
Direct robbery of Spanish citizens would net Spain about €120 Billion according to economist Niño Becerra who says "Cyprus Solution is Feasible, Can Be Extrapolated to Spain"
Santiago Niño Becerra, Professor of Economics at the University Ramon Llull in Barcelona, says a tax as imposed on Cyprus in exchange for bailout, would be possible and that "it is very clean, unlike a freeze all balances, which would be a mess."Direct theft is now considered a "feasible" option for Spain. Lovely.
Through his twitter account, Niño Becerra says it would be more painful for Cypriots if "the bailout were to occur in the form of public debt."
The Spanish government was quick yesterday to claim the Cyprus solution was not applicable to other countries. Niño Becerra disagrees: "I'm not saying this will happen, only that it is feasible, it is possible and if extrapolated to Spain, would be very clean."
Becerra estimated savings using Spanish a "tax" of 10% would raise €120 Billion. A 5% tax would raise €60 Billion, which, added to the €40 Billion commitment would be the amount regulators said a year ago that they may need for Spanish banks.
Cyprus Banks Closed Until Thursday
While pondering that thought, note that Cyprus banks will stay closed until Thursday
The Cypriot central bank has announced that the country's banks will stay closed until later this week as fears mount of a bank run."When It Becomes Serious You Have to Lie"
The country's banks were closed for a scheduled Bank Holiday on Monday, something that allowed Cyprus to try to implement a levy on savers' deposits. That move triggered unease among depositors in Cyprus, where cash machines soon ran out of funds.
This is the first time the 17-nation eurozone has seen a country dip into people's savings to finance a bailout.
Meanwhile, an emergency session of the Cypriot parliament has been postponed until Tuesday. Also, Germany must approve the plan, but is not due to vote until next month.
Following eurozone finance ministers' negotiations last week, Cyprus became the fifth euro-area country to get a bailout to save its banks, which suffered significant losses because of their exposure to Greek debt.
Recall the statement by Jean-Claude Juncker, Luxembourg PM and Head Euro-Zone Finance Minister "When it becomes serious, you have to lie"
So, why did Cypriot banks hold so many Greek bonds? They were stupid enough to believe lies by former ECB president Jean-Claude Trichet who insisted there would be no Greek bond haircuts.
Why was this move a shock to Cypriot citizens? They were stupid enough to believe lies by candidate (now president) Nicos Anastasiades when he said there would be no tax on deposits.
Lies of the Day
Today's lie of the day is by Chancellor Angela Merkel who says don't worry, Cyprus is a "Special Case".
How long will citizens of Spain, Portugal, and Italy believe that lie?
The answer is hard to say. People seem willing to believe what they want to hear, even when dealing with known liars.
Mike "Mish" Shedlock