Under conditions expected to be announced on Saturday, depositors in Bank of Cyprus will get shares in the bank worth 37.5 percent of their deposits over 100,000 euros, the source told Reuters, while the rest of their deposits may never be paid back.Why would anyone leave money in any bank in the European Union after this?
The toughening of the terms will send a clear signal that the bailout means the end of Cyprus as a hub for offshore finance and could accelerate economic decline on the island and bring steeper job losses.
Officials had previously spoken of a loss to big depositors of 30 to 40 percent.
Cypriot President Nicos Anastasiades on Friday defended the 10-billion euro ($13 billion) bailout deal agreed with the EU five days ago, saying it had contained the risk of national bankruptcy.
As Ace points out, this is like the pilot of a crashing plane offering the passengers a part ownership.
Charles Krauthammer suggests that Apple could buy the whole island with cash on hand, and still have some to spare:
“What’s amazing here I think is how small Cyprus is and how relatively small the problem is,” Mr. Krauthammer told Shannon Bream, was filling in for host Brett Baier.Maybe they should save it for iFornia.
“I mean, this is one country that Apple could purchase, and have a lot left,” he continued. “It could own the island and call it, you know, iCyprus or something, and have all this cash left over.”