| inbluevt | Date: Monday, 2013/07/29, 1:26 AM | Message # 1 | DMCA |
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Video go straight to the link..
You can be forgiven for thinking that you don't need to give a hoot about what's going on in Cyprus.
After all, it's just a little island somewhere in the Mediterranean.
But what's going on in Cyprus could actually matter — not just to the rest of Europe, but to the rest of the world.
Here's the short version of what's happening:Some of Cyprus's banks, like many banks in Europe, are bankrupt.
Cyprus went to the eurozone to get a bailout, the same way Ireland, Greece, and other European countries have.
The eurozone powers-that-be (mainly Germany) gave Cyprus a bailout and insisted that the depositors in Cyprus's banks pay part of the tab — a startling condition that has never before been imposed on any major banking system since the start of the global financial crisis in 2008.
The deal did not touch the bondholders. Why the depositors? These are folks who had their money in the banks for safe-keeping.
When Cyprus's banks reopen on Tuesday morning, every depositor will have some of his or her money seized. The current plan is that accounts under 100,000 euros will have 6.75% of the funds seized. Accounts over 100,000 euros will have 9.9% seized. And then the eurozone's emergency
lending facility and the International Monetary Fund will inject 10 billion euros into the banks to allow them to keep operating.
Cyprus's government tried to explain this deal by observing that it was better than the alternative:
Immediate bankruptcy and closure of the major banks. In that scenario, depositors would lose a lot more money. Businesses would go bankrupt. And tens of thousands of people would be instantly thrown out of work.
Message edited by inbluevt - Monday, 2013/07/29, 1:32 AM |
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