Cyprus strikes last-minute EU bailout deal

Agreement set to involve heavy losses for wealthy investors, while those with savings under €100,000 will be spared

The Guardian, Ian Traynor in Brussels, Monday 25 March 2013

Cypriots queue at a Laiki ATM. Under the new deal the bank will be closed with
 deposits over €100,000 seized and its 'good' assets transferred to Bank of Cyprus.
Photograph: Hasan Mroue/AFP/Getty

European leaders reached an agreement with Cyprus early on Monday morning that closes down the island's second-biggest bank and inflicts huge losses on wealthy savers.

Russians would lose billions of euros under draconian terms that are aimed at preventing the Mediterranean tax haven becoming the first country forced out of the single currency.

"Herman Van Rompuy has brokered an agreement between the troika and Cyprus," said an EU source, referring to the president of the European council and Cyprus's trio of creditors: the European commission, the European Central Bank and the International Monetary Fund.

A meeting of eurozone finance ministers that started six hours late reached an agreement in the early hours of Monday morning to finalise the fine print of the deal. Savers with deposits of less than €100,000 (£85,000) would be spared but it was thought there would be heavy losses inflicted on the deposits of the wealthy.

Laiki, or Cyprus Popular Bank, is to be closed, with its good assets transferred to Bank of Cyprus, the country's biggest bank, where savers would suffer big losses in return for equity shares. Those with more than €100,000 in Laiki would also be hit hard.

Negotiations got under way amid a hardening of the stance by the IMF and Germany, which insisted that depositors must take the hit for bailing out the eurozone's latest crisis economy.

There were signs of panic in Cyprus as a €100 limit was imposed on ATM withdrawals, with more stringent capital controls to follow if the deal is finalised.

The European Central Bank had threatened to cut off funds propping up Cypriot banks on Monday, which would have precipitated the island's exit from the euro if agreement was not reached at the emergency meeting.

"The numbers have not changed. If anything they've got worse," said Wolfgang Schäuble, Germany's finance minister. He said the aims of last week's agreement to raise €5.8bn – details of which were rejected by Cyprus – had to be achieved. This time, however, savers with less than €100,000 will be spared, meaning the burden falls much more heavily on the wealthy than the 9.9% levy proposed last week for their accounts.

Germany is determined that the island deflate a bloated financial sector that exceeds the size of the Cypriot economy by a factor of seven.

"It is well known that I won't allow myself to be blackmailed by no one or nothing," said Schäuble. "I'm aware of my responsibility for the stability of the euro. If we take the wrong decisions we'll be doing the euro a great disservice," he told a German Sunday newspaper.

Russians are estimated to hold more than €20bn of the €68bn deposited in Cypriot banks. Bank of Cyprus holds €28bn in deposits although it was not clear how much of that would qualify for the "haircut". But it was clear that the losses would amount to several billion.

The Cypriot president, Nicos Anastasiades, held meetings with EU officials in Brussels before the meeting of the euro group – the 17 finance ministers of the single-currency area – which included troika representatives Christine Lagarde, head of the IMF, Mario Draghi, president of the ECB, and Olli Rehn, European commissioner for economic and monetary affairs.

Little progress was reported from the earlier meetings on resolving the stalemate over how to structure a €17bn bailout, with creditors unwilling to offer more than €10bn while expressing dissatisfaction with Cypriot proposals to supply the remainder.

The agreement outlined early on Monday came close to what Lagarde had demanded a week ago and which had been rebuffed by Anastasiades.

Over the weekend Nicosia moved on legislation to wind up Cyprus Popular Bank and introduce capital controls to try to prevent a bank run and the flight of money out of the country.

Cypriots attend Sunday service at Saint-Mamas Orthodox church in

the capital Nicosia on March 24, 2013 (AFP/File, Barbara Laborde)

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Matthew message (Channelled by Suzanne Ward, Feb 18, 2013)

"... The Rothschild faction of the Illuminati, which governed its empire from London and the Vatican, lost its media foothold along with its other powers in that part of the world. A section of the Illuminati’s Rockefeller faction, headquartered in Washington, DC, and New York City, still has influence on major media in the US as well as on Wall Street; and their lingering foothold in Congress is evident in the intransigence that has stagnated progress. .."

In this photo provided by the Vatican newspaper L'Osservatore

Romano,  cardinals attend a meeting at the Vatican, Monday,

March 4, 2013. (AP Photo/L'Osservatore Romano, ho)

Archangel Michael on the World’s Movement into the Golden Age, March 24, 2013 – Part 2/2 - New

“… GW: Shifting to events that are taking place in Europe at this point in time, it seems that the events in Europe are reaching or about to hit a breaking point of some kind. Several leaders, including Nigel Farage and allegedly Russian Prime Minister Medvedev have suggested that people should be removing their money from their accounts as the cabal may attempt a last ditch grab for money.

Now, I know, and perhaps many know, that the current system is corrupt and that there will have to be a degree of change in the current system before people will be willing to embrace the new system.

I don’t wish this question to sound alarmist to people, but is what is happening now one of the final, if not the final, straw that will help expose the banking cabal and allow the new system to be implemented? Is this new system ready? Or is it already being implemented? Or is it still only limited to preparatory work?

AAM: No, it is already underway. It is already being implemented. And yes, we do not wish to sound alarmist either, and so we also wish people to know that their resources, what they think of as their money, for those who have saved and put their faith in banking systems, they will be protected to a certain extent. So do not think that you have need to run out and remove all your monies, or that it will be completely gone. But yes, this is the beginning of a transition.

The expression of the lack of faith in particularly the European banking system causes enormous disruption, more significant perhaps than anywhere else. And so yes, it does have a domino effect, but it is not one simply shutting down [the old system] and a new system emerging. It is coming into balance with the new emerging as the old simply fades away.

Is it a last ditch effort on the part of those who have clung to the old paradigm of the 3rd, what you call the cabal? Yes, it is. But it matters not, because it is not going to work for them. Seldom are things such as this situation so black and white. There is always room for free choice and free movement and adjustment.

But in this situation it is simply evolution and expansion. And the expansion of the new, of the new paradigm, of what you think of as Fifth-Dimensional financial systems does not allow for systems that are based on greed and theft and control — and unfairness, basic unfairness, usury.

So, it is rather clearly defined. You have an expression that you use on Earth, “Out with the old.” And this is one of those situations where it is, in fact, the truth.

GW: Okay. So, along the lines of the leadership, or at least some of the leadership of what’s taking place in the financial sector globally, it has been reported that the apartment of the IMF managing director Christine Lagarde was raided last week.

Was this an attempt to expose her as part of the banking cabal, or was it an attempt to stop her from fulfilling the reforms that she is allegedly trying to bring to the international banking system?

AAM: It was an attempt to gather information and perhaps even destroy documentation that she is trying to bring forth for the reform of the financial situation. It was an unsuccessful raid.

GW: Okay. So what I’m hearing in your answer, then, is that Christine Lagarde is working for, I guess, the forces of light to bring the greater change to the IMF. Am I correct?

AAM: Yes. This one has had a real turn-around. No, we do not ever categorize individuals or groups or people as light or dark. But this one has truly committed herself to reformation.

She sees and she has the experience very clearly of knowing what does not work. And therefore she has committed her mission, her purpose to this reformation.

GW: Okay. And could the same be said about the new US Secretary of the Treasury Jack Lew? Is he on board with all the changes and working for the reformation as well with Lagarde?

AAM: He is an agent and an angel of change. He could not be simply on board. He is a moving force. ‘…‘’