What about all that money the offshore drilling was going to bring in ?

For English news stories - it's best to check with the Cyprus Mail online news: http://www.cyprus-mail.com/

More often not though, the better points come from the comments from the readers that appear at the bottom of each article.

Yes, Cyprus put in for a bail out this week - mostly to cover the Laiki Bank (or you may hear it referred to as the Popular Bank) as it's owned by Marfin Laiki which is mainly Greek.

From what I understand they didn't put in for a full bail out but the EU supposedly said what they'd asked for wasn't enough. Cyprus has borrowed from Russia and I think China too. But the Laiki is the main concern and they only have so many months to sort that out.

It was caused by holding lots of Greek bonds (I assume as collateral) but of course now the bonds are completely worthless.

Saying that, I saw somewhere today that BOC (Bank of Cyprus) have also asked for help. We moved our funds a couple of months ago to a bank that is owned only by Cyprus rather than one that has a Greek akinship.

been watching it happen, over here a month ago [didn't notice anything in CM, ] the bank of Cyprus UK operations were transferd to a new company The Bank Of Cyprus UK LTD, becoming a British company under the regulatory financial services authority thus protecting the UK customers from what may happen

It was caused by holding lots of Greek bonds (I assume as collateral) but of course now the bonds are completely worthless.

Government bonds are IOUs and nothing more - just a certificate setting out out how much the country 'selling' them is borrowing from the 'purchaser' (ie the bank or other country) and the rate of interest they will pay on the loan. When they are traded, what is being sold is the debt and the buyer is taking the gamble that the debt will be honoured and repaid as agreed on the original bond or IOU. Their profit is taken from the difference between what was originally borrowed and what the buyer thinks the bond will redeemed for when the country concerned pays out on it plus the annual 'dividend', that is the interest to be paid on the loan to the 'owner' of the bond. Government bonds are simply debt factoring on a huge international scale. So they are not collateral in the traditional sense - they have no intrinsic value in the way that your house has if you agree to putting it up as collateral in order to secure a loan from the bank. The rules are very different for us 'civilians'!

Greek Government Bonds are now worthless because everybody now thinks that the chances of them ever repaying the loans are non-existent. In effect, banks in Cyprus (and elsewhere of course) made huge unsecured loans to Greece - there never was any collateral for them. Just a paper promise to repay the loan that is unlikely to ever be honoured now.

Imagine how you or would be treated by the banks if we tried to get them to give us mortgage in return for nothing more than a piece of paper promising that we'd repay the mortgage instead of it being secured on the property and then said 'Sorry, I can't repay you because I spent the money on other things and now I'm going to walk away from the debt but keep the house and all the stuff I spent the money on instead of repaying you'?

SM

LOL SMa - that's how Cyprus has been running for years!

People borrow money from the banks here and then complain when the bank say they have to pay it back.... It never happened till recently. You should have seen the shock when they all started getting demands for money. Last year Cyprus started to see repossessions - something that's been pretty much unheard of in the past.

Marfin is a Greek bank and they either merged or took over the Laiki bank a couple of years ago so it's now Marfin Laiki.

LOL SMa - that's how Cyprus has been running for years!

No wonder they are in trouble now!

And it also explains why it seems to have come as such a shock to them (and Greece) that the Germans now expect them to honour their debts

SM

Ah but you see, the expats have been here trying to bring them into the "real world" over a number of years...

When the Road Tax is due to be paid twice a year who do you think are the first in the queue at the banks to be making their payments?

Road Tax is payable twice a year as tax discs run (6 months) from June till December or December till June or can be renewed for 12 months at a time. If your tax expires in December, you generally have until about 20th February as leeway for payment.

On 21st February, who are the last in the queue to make their payment?

Get my drift?

And, if you don't pay your Road Tax for 3 years - you lose your Registration Number. Guess how big the queues are then? Are there any expats in them?

Not on your nelly! :-)

Cyprus may be experiencing financial difficulties but thankfully they have gas and oil supply, which will boost the economy

One day we will - but we haven't got it yet!

they havent got gas yet, they have exploration reports which sujest a moderate gas field till they start drilling no one will know for sure,enyway if they had gas the money would not do the country any good... by the time the oul companies fiddle the books and hide most of the profit before the government gets even a snifter of tax revenue they will be lucky to get enough to pay the fuel bills for the government car fleet

10% levy on savings

http://www.bbc.co.uk/news/world-europe-21814325

just think how much money is going to be taken out of banks now. No way would I pay the banks 10% to keep my money. What a disaster for so many folks there who are really struggling.

I am not even going to pretend I understand any of this but I am just wondering in light of this what would be the best way of taking holiday money. We normally just withdraw cash from the machines and use a credit card for everything else.

the option was bankruptcy, had that happened then everyone would have lost everything.

some of us have been watching this for the last 18 months or so, they are very lucky with the outcome offered by the Euro lenders the total loan is 7 bn less than expected,

Kazd

it will have no effect on your banking [assuming you do not hold a Cypriot bank account] take euro or sterling cash if you wish, but i would avoid the cost of travellers cheques,

I guess they are just recouping the 6% interest rates they have unrealistically been paying for the last five years when the rest of us eurozonies have been scratching around to get 0.5 or 1%. Also the weird fact that you can earn 19,000 euros a year before paing tax - how unrealitic is that in this modern day and age, I think it is only logical something had to give, must be preferable to letting the banks go bust and people ending up with no deposits at all.

Plus there was talk of a load of corrupt Russian money there that at one point they seemed to be welcoming with open arms. Drugs, arms, people trafficking money that kind of stuff.

Sad for the small saver though, I guess it will be the poor Cypriots themselves who will take the biggest hit .

luci HT Mod wrote:

10% levy on savings

http://www.bbc.co.uk/news/world-europe-21814325

It's 6.75% for any account with less than €100,000 balance and 9.9% for €100,000+

Funds have already been "blocked" (as in we can withdraw cash if you can find a machine with cash in it but not the blocked funds). It's a public holiday on Monday and now they announced the banks may not open till Thursday but definitely not on Tuesday....

The people are very angry, to say the least!

My "take" on the matter is here: http://wp.me/p1uja5-1Sr

Well written. I see it as downright theft. They really needed to be above board. All this will do now is ensure that any savings now go anywhere but the banks. How is that going to help?