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A bailout for the Cyprus has been agreed, but bank depositors are going to be hit for between 6.75% and 9.99% of their deposits. Ouch!
www.bbc.co.uk/news/business-21797888
A good point is made in the coverage about the possible response of depositors in other countries that might need some kind of bailout.
Last edited by: VxFan on Wed 20 Mar 13 at 00:37
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A levy on Cyprus depositors has been discussed for months. Smart money may have already gone...
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If "they" want to create a run on banks in debt-burdened Eurozone countries they are going the right way about it.
If I was Greek, mine would be under the mattress.
At least they have worked out that it isn't the poor people who have got all the money ;-)
Last edited by: Manatee on Sat 16 Mar 13 at 16:28
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>> If "they" want to create a run on banks in debt-burdened Eurozone countries they are
>> going the right way about it.
>>
Exactly. Imagine what would happen here if the BoE said that there might have to be a levy on personal bank deposits. Remember the queues at Northern Rock?
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Far safer to put money into gilts.. the Gov't will never touch that - for obvious reasons...
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"It is not right to take money from the normal average business or person , who has done nothing wrong and has duly paid all the taxes he or she should have done. They have worked hard for their savings. and the government should not just impose and take this money without any reference to the people. Bankers Lawyers and politicians and the corrupt elite of this Country are to blame. Each are really truly unaffected by this measure as their money has long since gone, and or they have enough of a salary to cope with a massive haircut and a pension we can only dream about and healthcare provision. It is a shameless act by a government. I just hope by Tuesday they have seen sense and this is altered in some way to be more fair to the innocent general public"
Comment from:
www.cyprus-mail.com/anastasiades/new-decision-painful-only-one-anastasiades/20130316#comments
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>>>"It is not right to take money from the normal average business or person..."
Too true!
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Theft, pure & simple. EU masterminded and puppet Cyprus government actioned.
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Partner not too pleased - half built villa and €funds for completion in a poxy local bank. Can anyone kindly throw light on this statement posted on another site, please?
"It won't be long before the Russians are buying up the shares that the people are being given in lieu of their money. It seems to me that its going to be the easiest way yet for Russia to buy influence in the region."
I have seen/heard nothing about shares as recompense!
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>>Can anyone kindly throw light on this statement posted on another sit
You may wish to follow this thread Mildew:
www.expatforum.com/expats/cyprus-expat-forum-expats-living-cyprus/146618-bailout-ready.html
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Thanks Dog. I found a couple of references to "Equity Documents" without any exact description of what they are or might be worth. Thanks for the link though. Depending on which side of the fence you are viewing this from it is either a necessary acquisition of money by the Cyprus Government or legalised theft. Nobody seems to think that if they get away with this once they won't try again, and that the idea might spread among the other indebted EU countries. One man said he got to a small local bank and emptied his account on Saturday, Parliament are going to rubber stamp the legislation today (Sunday) and the banks are close for a holiday on Monday, so he was very lucky.
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I don't like it at all Melders, I mean, it's supposed to be a democracy so in my opinion they should have put the question to the people = do you want to hand over 10% of your bank deposits, or would you prefer for the Cyprus banks and potentially even the country to become bankrupt (that would have focused the mind somewhat)
Veronica one of the mods on the Cyprus expat forum seems to be pretty well clued up, usually.
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>> Theft, pure & simple. EU masterminded and puppet Cyprus government actioned.
>>
And previously the Cyprus Government spent all the money they had plus borrowed a lot more. And the Cyprus banks had invested their money in Greek banks.. how dumb can you get?
Blaming the EC for helping the Cyprus Government when it has become bankrupt through entirely its own fault seems totally illogical. After all, if the Cyprus Government had gone bust - which was the alternative - the depositors could - and probably would - have lost most of their savings..
Last edited by: madf on Sun 17 Mar 13 at 07:45
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and yet locally there are adverts for relocation to Cyprus...
obviously you'd need a trade/profession and bags of cash.
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>> and yet locally there are adverts for relocation to Cyprus...
>> obviously you'd need a trade/profession and bags of cash.
>>
I think that after recent events the new phrase is "mattresses of cash".
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When I worked overseas I always ensured my local bank accounts had minimal cash...
Any anyone who banked with a Greek Cypriot bank had obviously never read about nor cared about due diligence...
Roger will next regale us with stories of UK Government propping up Cyprus by compensating UK nationals who lost money in Cyprus banks...
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It seems that the great Cyprus Bank Robbery is not yet a done deal but, if it does not go through, 2 major Cypriot banks may fail. UK has said that UK Government employees, on duty in Cyprus, will be compensated if the the robbery goes ahead/
news.sky.com/story/1065753/cyprus-postpones-vote-on-savings-raid-bailout
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I am sorry but this debate reminds me of the one on UK austerity (which is NOT austerity).
Everyone is in favour of cutting spending etc as long as they are not affected..
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Yet again, Osborne has proved what a bell-end he is by announcing in advance that the UK will pick up the tab for UK state employees & Armed Forces if the theft goes ahead, thus making sure that Cyprus will happily include them in it, knowing that the UK taxpayer will pay.
Dumb-ass.
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So how many many members of the armed forces have savings in a Cypriot bank of over EUR 100,000?
Cost of compensation will be extremely small. Political benefit of announcement large.
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>> So how many many members of the armed forces have savings in a Cypriot bank
>> of over EUR 100,000?
>>
>> Cost of compensation will be extremely small. Political benefit of announcement large.
I read 6.75% charge on balances <€100k. Is that not correct.
Roger is right. Idiot, if that is true. Though I sincerely hope there is more to it.
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If my savings were worth the same in Euros as they were four years ago I could afford a 10% reduction in their value and still be substantially better off than I am now.
Our currency has been devalued by 30% and no one complains. The Cypriots risk losing up to 10% of their savings and the talk is of bank robbery. And our government has somehow convinced the population that having the power to devalue our currency is somehow a good thing.
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>> If my savings were worth the same in Euros as they were four years ago
>> I could afford a 10% reduction in their value and still be substantially better off
>> than I am now.
>>
>> Our currency has been devalued by 30% and no one complains. The Cypriots risk losing
>> up to 10% of their savings and the talk is of bank robbery. And our
>> government has somehow convinced the population that having the power to devalue our currency is
>> somehow a good thing.
Agree with that. One reason I continue to hold a European Index fund, as part of a balanced diet of course (and American, Pacific, Japan, even though the Japs are devaluing, our lot are probably going to be better at it).
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My savings, wherever they may be, are mine and just that. They are for me to spend as I wish and not be confiscated at the whim of some political shysters, in Cyprus or anywhere else.
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>> My savings, wherever they may be, are mine and just that. They are for me
>> to spend as I wish and not be confiscated at the whim of some political
>> shysters, in Cyprus or anywhere else.
I think the point is, Meldrew, that they will be confiscated one way or another unless you want to keep gold under your floorboards. Or buy equities and hope the theory that they will keep up with inflation works, and the other risks don't get you.
The BoE has gone very wobbly on the inflation target and while you can see the argument for a growth target, a happy side effect of that is that the public debt (and the public's private debt) will be inflated away, as will your savings if they are in cash.
The effect either way is to transfer wealth from those who have it to those who have debts, just like 1974-82. The house I owned 5% of in 1977, I owned 60% of by 1982 without paying anything off the mortgage.
It might actually be preferable to take a one-off chunk off our savings and not have the inflation - at least we would only be bailing out public debt, not that of all mortgagors, property speculators and the generally feckless.
Of course we couldn't trust that would happen. We'd just get both.
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>> Roger will next regale us with stories of UK Government propping up Cyprus by compensating UK nationals who lost money in Cyprus banks...>>
How did you guess? :-)
Well, nearly that anyway.
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We were living in Australia on a Navy posting when the pound was devalued in the 1960s, our overseas allowances were increased to cover the drop in income.
Last edited by: Old Navy on Sun 17 Mar 13 at 14:02
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Cyprus is of course a haven for money launderers - mainly Russian...
tinyurl.com/a8gtxos
tinyurl.com/cotmwb5
Last edited by: madf on Sun 17 Mar 13 at 14:58
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As at 1808 (UK Time) BBC news states that Cyprus Parliament has not yet agreed to accept the EU funds on offer or passed the legislation allowing it to to pillage resident's bank accounts.
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Melders, this is a thread about the Cyprus theft, from the expat in Spain forum started by Mary (mrypg9)
she knows her stuff ;)
www.expatforum.com/expats/spain-expat-forum-expats-living-spain/146742-cyprus-shock-horror.html
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Of course, the Brits have been more subtle, and called the levy QE - approx. 2% tax each year difference between inflation rate and lower interest rate paid on bank accounts
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QE is not a levy or a tax, so far as I can see. It is when a central bank buys financial assets from commercial banks and other private institutions, thus creating money and injecting a pre-determined quantity of money into the economy.
Last edited by: Meldrew on Sun 17 Mar 13 at 21:06
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Test run? if they get away with this without serious civil disorder then we can safely assume that such actions will go ahead across the whole of the masterstate, maybe a regular dip into the proletariats piggy banks to keep the biggest con on earth afloat.
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It is not going to work. The slightest whiff of it happened will lead to large scale - like billions - of cash outflows. Thus destabilising banks and economies.
The people who thought it up are of course the German central bankers - whose current policies are designed apparently to make things worse. So far they are successful in meeting their aims..
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Latest twist in the story. Stormy session expected in Parliament this afternoon, particularly as the President, elected just 2 weeks ago, promised that no such financial action was contemplated!
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At the end of the day the Cyprus government has very little choice in the matter. The only viable alternative would be to drop out of the Euro which would instantly lead to a massive devaluation of the new currency. The effect on the finances of Cypriot people would be far far worse than the haircut currently planned.
I suspect we will hear today of some amelioration in the rate of levy to be applied to smaller bank deposits.
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Where are the Cypriots who managed to remove their funds depositing them now, German banks?
On a serious note, could those here with more financial acumen than me advise if it's possible to get better rates by investing in foreign financial institutions?
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Let's see .. The UK is devaluing its currency. So any investment in Eurozone ought to do well. Buy euros and deposit in a German bank.. would be my strategy.
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I'd steer clear of the Euro - this game is not over!
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>> I'd steer clear of the Euro - this game is not over!
Moroccans seem to want Euros, nearly as much as the Greenback.
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>> Let's see .. The UK is devaluing its currency.
You think the UK has any control over the value of its currency?
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"You think the UK has any control over the value of its currency?"
O course they do. If the BoE announced that there would be no more quantitive easing and the likelihood was that interest rates would rise the RoE would immediately harden and vice versa.
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>> "You think the UK has any control over the value of its currency?"
>>
>> O course they do.
Of course they don't. 15% interest rates couldn't save it in the past. Remember that day?
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So you believe that the policies of the BoE in setting interest rates and printing money in no way influence in any shape or form how the money markets behave? Might as well go for unlimited quantitive easing then. Problem over.
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>> So you believe that the policies of the BoE in setting interest rates and printing
>> money in no way influence in any shape or form how the money markets behave?
>> Might as well go for unlimited quantitive easing then. Problem over.
I am merely saying that national governments can not control the value of an open currency. They have no effective short term tools to do so, as i pointed out above*
Take the USA for example - currently pushing their mega trillion national debt level higher, yet the dollar has strengthened.
*Bit of a lie, actually they do. They have words. They can say the right things, but you get caught out after a while when its proved to be meaningless words. The value of currency is all about market confidence.
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So you you are saying that the words and action of the BoE do affect the the money market and have an affect on the RoE. I do believe that is what I said in the first place.
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>>
>>
>> So you you are saying that the words and action of the BoE do affect
>> the the money market and have an affect on the RoE. I do believe that
>> is what I said in the first place.
No I m saying thy can try. Conveniently you missed a bit of my statement out.
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>> At the end of the day the Cyprus government has very little choice in the
>> matter.
>>
But they are where they are from their own choosing.
To take a country on a path that ends with it being necessary to pilfer the people's savings by one means or another is criminally fraudulent.
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I read that the Russian monolith Gazprom has offered to step in and rescue the Cypriot economy in return for the right to exploit the recently-discovered natural gas field (which, by the way, is already the subject of a dispute over drilling rights with Turkey).
The hackneyed expression 'you couldn't make it up' just doesn't do it all justice, does it?
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Gazprom are the private arm of the state trying to rescue illegal Russian deposits subject to a witholding tax...
No doubt a few politicians hold the odd billion or two in Cyprus obtained through Sabotage, murder, extortion blackmail etc.. oh that was SMERSH...
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Cyprus Govt wanting to take 6-10% of deposits!
At least they are upfront with the practice.
The UK Govt has bailed out the banks for the last 5 years with saver's cash and cash people have invested in their private pensions.............record low interest rates and annuity rates!
A lot more than 6-10% - more like a minumum of some 20%!
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So what is the difference between the cyprus banks raiding their depositors savings funds, and Gordon Brown raiding our pension funds?
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>> So what is the difference between the cyprus banks raiding their depositors savings funds, and
>> Gordon Brown raiding our pension funds?
>>
The Cyprus one claims to be a one off, the GB effect is ongoing, that and the smug smile when he announced it
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I think the real point is, notwithstanding that in Cyprus there may be "dodgy" deposits, and the bailout necessity is home grown there; if the EU get away with this for one country, they'll not think twice about stiffing account holders in other EU countries.
It also confirms the loss of sovereignty suffered by countries in both the EU & the Eurozone.
If you believe that a Federal United States Of Europe is a good thing, I expect you are happy with that.
If, like me, you do not believe that, it is seen as a betrayal of everything our country has achieved in its long history.
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it is seen as a betrayal of everything our country has achieved in its long history
What, like a benefit dependant and bankrupt, both morally and financial, state ? :-)
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>> I think the real point is, notwithstanding that in Cyprus there may be "dodgy" deposits,
>> and the bailout necessity is home grown there; if the EU get away with this
>> for one country, they'll not think twice about stiffing account holders in other EU countries.
>> It also confirms the loss of sovereignty suffered by countries in both the EU &
>> the Eurozone.
>> If you believe that a Federal United States Of Europe is a good thing, I
>> expect you are happy with that.
>> If, like me, you do not believe that, it is seen as a betrayal of
>> everything our country has achieved in its long history.
>>
I think that statement is, at best, crap propaganda. I am being kind here.
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>> I think that statement is, at best, crap propaganda. I am being kind here.
>>
So, what's your view of the pros/cons of the Cyprus bailout?
Your perspective will be interesting, if I have remembered it correctly, i.e. something like "The EU has quite a bit that needs fixing, but the UK has no realistic alternative but to throw its lot in with it".
(Please amend this as necessary because I am NOT trying to put words in your mouth, or describe this position in anything other than neutral terms)
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>> >> I think that statement is, at best, crap propaganda. I am being kind here.
>>
>> >>
>> So, what's your view of the pros/cons of the Cyprus bailout?
>>
>> Your perspective will be interesting, if I have remembered it correctly, i.e. something like "The
>> EU has quite a bit that needs fixing, but the UK has no realistic alternative
>> but to throw its lot in with it".
>>
>> (Please amend this as necessary because I am NOT trying to put words in your
>> mouth, or describe this position in anything other than neutral terms)
Indeed that is my view. However nowhere in that view do I see, have I said, or can I see justified words like:
>>confirms the loss of sovereignty suffered by countries in both the EU &
>> the Eurozone.
Its an offer of a bailout. Cyprus does not have to take it. The EU did not put them in this situation to destroy their sovereignty, they got their all on their own. Nor did the EU tell the cypriot government they had to raid their citizens bank accounts. It confirms nothing about their levels sovereignty or not.
Nor have I come out with idealogical crap like:
>> it is seen as a betrayal of
>> everything our country has achieved in its long history.
Last edited by: Zero on Mon 18 Mar 13 at 18:19
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Cyprus does not have to take a bailout.
It can let all its banks go bust and all its depositors lose their money.
And they are bust because their banks lost 75% of their loans to Greece following the bailout of Greece.
It shows the narrow minded lack of understanding of basic finance that anyone can criticise the offer of EU help to Cyprus when the alternative is basically abject poverty for Cypriots if they don't get help,
But then anyone who supports UKIP has as much financial sense as those Greek Cypriot bankers who lent Greece money...Or maybe they think the we should offer the Cypriots help for nowt? :-)
Last edited by: madf on Mon 18 Mar 13 at 18:39
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Just got back in from a night with the outlaws. Thanks Zero, madf for your interesting analysis. It really makes you wonder how such incompetent berks every got to be heads of banks (and not just in Cyprus).
Not a UKIPer myself, or indeed an opponent of the concept of a European Union. Just a critic (from the left) of the particular EU organization that we have.
The EU is getting an unfair rap over the Cyprus affair, and in fact for the way that the various summits have handled the Eurozone crisis. These are unprecedented times and their is no handbook on how to deal with the situation.
I think the BBC got it about right. www.bbc.co.uk/news/business-16290598
"There was a big build-up of debts in Spain and Italy before 2008, but it had nothing to do with governments. Instead it was the private sector - companies and mortgage borrowers - who were taking out loans. Interest rates had fallen to unprecedented lows in southern European countries when they joined the euro. And that encouraged a debt-fuelled boom."
and.....
"All that debt helped finance more and more imports by Spain, Italy and even France."
and...
"But debts are only part of the problem in Italy and Spain. During the boom years, wages rose and rose in the south (and in France). But German unions agreed to hold their wages steady. So Italian and Spanish workers now face a huge competitive price disadvantage. "
The ultra pro-Europeans were actually right. Monetary union also needed fiscal union (de facto political union) to make it work properly - and we didn't get that.
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At the end of the day if Cyprus want to be in the Euro, as a tiny country they will be told what to do by others. That was their choice and they want to stick with the Euro even now, so they will simply have to do as they are told and live with whatever the consequences are.
Had to chuckle to myself watching Sharon Bowles being forced to speak out against her beloved EU, there is a god and he has a sense of humour.
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>> QE is not a levy or a tax, so far as I can see. It
>> is when a central bank buys financial assets from commercial banks and other private institutions,
>> thus creating money and injecting a pre-determined quantity of money into the economy.
>>
But in doing so it is 'diluting' the money already in circulation, there may well be a growth effect but if you assume that when the 'new' money is issued the total value of assets in the economy is at some existing level then that value doesn't instantaneously increase - just the amount of money that represents that value increases, hence an individual currency unit is arguably worth less - at least for a time.
This is over-simplistic of course, the numeric value of some or all of those assets might quickly increase however the numeric value of cash deposits won't, so your savings have been devalued in their purchasing power.
The Cypriot government can't do this - that is under the control of the ECB and countries like Germany might have something to say about such behaviour (although the ECB buying peripheral govt bonds is probably a similar exercise).
So, in some ways the Cypriot depositors taking a 'haircut' is not dissimilar to UK depositors whose savings have devalued due to effectively negative interest rates. In both cases those who built up debt rather than saving have been rewarded at the cost of those who didn't.
What I suspect the Cypriots might reasonably complain about is why they are singled out for this treatment yet the Irish, Portuguese, Spanish and Greeks weren't ? I understand the comments on the large number of foreign depositors in these banks and maybe there's an argument for a levy on those with large deposits but it all appears a little unfair to me.
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I am having difficulty understanding how one million peple can actually need a bailout ot of this much money. It is going ot get very tense if the Russians withdraw their €2.5 billion loan offer!
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It has nothing to do with Cypriot citizens. Everything to do with Cypriot banks.
The Greek banking sector is HUGE - several multiples of the size of Cyprus's GDP.. equivalent to RBS in the UK.
There are deposits in Cyprus worth $20b. The Greek banks are funded - unlike UK and US banks - by deposits - not shareholder equity or bank bonds. A run on Greek banks with depositors withdrawing money means the banks go titsup.
And the Cyprus Government can't print money to refinance them .. unlike the UK or US.
Last edited by: madf on Tue 19 Mar 13 at 07:34
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So to sum all this up:
1) It's got nothing in principle to do with the EU. That may or may not be a flawed concept, and it may or may not be workable if it had been started on day 1 as a full economic and political entity. But it wasn't, and that may be a problem.
2) The real problem is the collective madness of world governments and banks thinking that it is possible to borrow and lend without limit, without regard to the sustainability of the purposes of the loans, to pour more money in after wasting the first lot, and in the end to borrow more and more simply to pay the interest on the previous loans.
Where this move goes wrong is that its authors think there is such a thing as a partial bank default to ordinary depositors. Confidence in a bank is all or nothing. The slightest whiff of suspicion that a bank for whatever reason may not be able to honour the balance shown on your statement and people will want out. Not just from that bank, but any bank they suspect might be next on the list.
They should all be compelled to watch Mary Poppins and the scene when a refusal to pay out tuppence caused a run on the bank and the shutters came down.
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Gawd luv ya CP in me best Dick VanDyke cockernees, thats it in a nutshell without the yah boo elements.
You'd last a couple of years if you were lucky or daft enough (and nothing stopped the regular but insufficient income) running a house on ever increasing debt upon debt burden, not much different to this and other recent capers as far as i can see, only difference is how many zeros (shudder;) involved and who's responsible for servicing that debt.
Its always been easy spending someone else's money real or borrowed.
Last edited by: gordonbennet on Tue 19 Mar 13 at 09:10
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"Its always been easy spending someone else's money real or borrowed."
I am looking forward with interest and no trepidation to see how the post 2015 UK Government - which I assume will be Labour - manages to cope.
I expect a MAJOR expenditure cutting program will be needed.. which means the NHS and benefits including pensions. Proper austerity..
An election worth losing. The unions will be on strike most of the time. See the 1970s again.
I can see a wealth tax due to desperation...
Last edited by: madf on Tue 19 Mar 13 at 09:45
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>> An election worth losing.
Good point, maybe Cameron's not as clueless as he might appear, making the Cons unelectable for a different reason.
Whoever steers the ship will have to go dipping into real funds, maybe not unlike the Cyprus pilfer, to keep the ship at its present juanty list to Port..;)
Last edited by: gordonbennet on Tue 19 Mar 13 at 09:51
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>> to keep the ship at its present juanty list to Port..;)
>>
I don't think it's listing, just down by the bows after a minor incident in the Bank of Fog.
But it's all right, there are watertight controls, and the chief mate is just doing some fine tuning to ease things a bit quantitatively.
The band is still playing, and the ship is beginning to increase speed as it prepares for the final ....
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If some of you here feel that a full European political and monetary union, creating what would be a Federal United Europe, is desirable, that is a perfectly valid opinion to have and I would expect you to oppose any movements in the constituent countries which disagree with your stance.
On the other hand, there are those who do not wish to see such a political and monetary union, where nations have no real individual autonomy and are also not able to control their own currency. This is also a perfectly valid opinion to have and those who have it are no more loons than those of you who take an opposite view.
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Cameron,Milliband what difference is it going to make.We are all on the Titanic and this financial ship is sinking fast.Russian Mafia money owns Cyprus and the forced Euro dream from Brussel is going down.Let;s hope our children and grandchildren still have some kind of future in this corrupt world.
Jimm Rogers and Peter Schiff aren't far wrong a financial Armageddon is on its way or has already arrived.
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>>Jimm Rogers and Peter Schiff aren't far wrong a financial Armageddon is on its way or has already arrived<<
I seem to recall somebuddy or other posting this a phew weeks ago: www.moneyweek.com/endofbritain
^_^
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I have read doom and gloom reports for the past 50 years.
Humans are adaptable.. that is why they are usually found to do something they don't like - eventually - because they have no alternative.
See Mrs Thatcher.
Also see the Germans who embarked on Austerity for the West to pay for union with the East. It worked.
I have confidence eventually# things will get better.. but anyone who thinks it will be quick or easy is named Ed Balls and is an ignorant lout.
# in about 8 years time.
Last edited by: madf on Tue 19 Mar 13 at 11:41
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See today's Matt cartoon on Telegraph front page. Tee hee...
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>> See today's Matt cartoon on Telegraph front page. Tee hee...
>>
It's easy stealing a dog's bone or a bank deposit from a little old lady. But they really ought to think more carefully before refusing a payout to a masked mafiosi representing a rogue gangster state. Perhaps they should just give him the gas field, if that's what he wants.
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This is partly why we are deep in it....
tinyurl.com/carteya
When my kids came along and my wife stopped working we gave up Sky and going down the pub and expensive takeaways and it wasn't that long ago.
Now it seems like these things are a right if you don't work which is criminal.
As a liberal (not with a capital L) I believe that there should be a safety net but the net currently appears to be a silk lined hammock with all mod cons!
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>> As a liberal (not with a capital L) I believe that there should be a
>> safety net but the net currently appears to be a silk lined hammock with all
>> mod cons!
If you look at the money people actually get you'll find the safety net is no bed of roses. If people budget for a low price Sky package or the FTA thingy that's one thing. If they've got an all singing/dancing subscription to footy and movies then either the loan shark's helped or there's a black economy issue to be tackled.
Don't forget this item is from the Mail, a paper that's made a sport out of demonising the poor.
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>>If you look at the money people actually get you'll find the safety net is no bed of roses <<
That really depends on the person involved. Some do very well from it, others not so much.
I know a woman with 4 kids who is getting just under £1.5k a month in benefits, her ex pays the morgage aswell as child support. Her solution to an impending drop in benefits due to youngest child going to school full time was to get pregnant by a random man.
Her eldest daughter who is 11 is attempting to get alone time with boys and cant wait to have a baby, who can guess where that will be going and who will pick up the tab.
She just bought a new car, Fiat Punto I believe although she hasnt worked in 10 years.
Some people get a terrible deal on benefits, others seem to do remarkably well and that is no Daily Mail story, it is someone in my ( much ) extended family that is, how should I put it, a subject of much discussion.
You make a good point about the black economy though - the government doesnt put nearly enough resources into tackling it and they are literally loosing money by not doing so.
I declare all my cash earnings but it would be exceptionally easy to not do so, aslong as you were modest about it.
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Former governor of the Cypriot central bank, Anthanasios Orphanides has launched an powerful rebuke towards Cyprus's European creditors, branding their actions tantamount to blackmail. Speaking to Bloomberg TV, he said:
"We are witnessing historic times. What we're witnessing is the slow death of the European project. We are in a situation where some European governments are essentially taking actions that are telling citizens of other member states they are not equal under the law.
What we have seen for the last few days is a very serious blunder by European governments that essentially are blackmailing the government of Cyprus to confiscate the money that belongs rightfully to depositors in the banking sector in Cyprus.
The way the strongest governments of Europe have blackmailed the Cypriot government to confiscate deposits is essentially sending a message that no-one with deposits in a small country like Luxembourg should feel safe about their deposits. No-one with deposits in a weak country, like Spain, should feel safe about deposits.
Decisions like this, much like the decision to haircut Greek debt in October 2011, actually benefit some countries. For example as we’ve seen from markets yesterday a decision like this reduces the financing costs for the German government so the German government can now borrow at negative rates as a result while it inflicts pain on other countries. Not everybody is equal under the law the way European governments are behaving these days."
Granted he has an axe to grind, but he has a point!
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So what would your solution be to the problem Roger?
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>> So what would your solution be to the problem Roger?
>>
If bail-outs are deemed necessary, at least the same terms as applied to other bailed-out countries.
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Well its entirely up to the Government of Cyprus whether they accept the bail out offer.
It's also not my experience that the borrower is in a position to demand of the lender as to what terms they should lend at.
The government of Cyprus has made its bed. I''m afraid it must now lie in it.
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>> Granted he has an axe to grind, but he has a point!
>
No he doesn't, he is deflecting blame and using the EU by using inaccurate rhetoric.
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Cyprus's membership of the EU and Monetary Union did not cause this
They do not have to take the bailout which by the way is part IMF and NOT all EU
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>> If you look at the money people actually get you'll find the safety net is
>> no bed of roses. If people budget for a low price Sky package or the
>> FTA thingy that's one thing. If they've got an all singing/dancing subscription to footy and
>> movies then either the loan shark's helped or there's a black economy issue to be
>> tackled.
It is the balance that's being talked about here.
There are plenty of working families who have to budget extremely carefully, down to an nth degree....and who are worse off than some on benefits.
I wonder how the truly enormous televisions, relatively new cars and somewhat decent holiday every year are afforded...when the next family is struggling and has nowhere near that standard of living.
If it is a black economy thing, then they are fraudsters, thieves, call it what you like, they are taking from the State* and working.
* everyone else who is honest
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Not pertaining directly to the conversation, but here I just saw an interview from a Brit bemoaning the fact that on-island Government personnel are protected, but that she, as a island-resident Brit, was not protected.
She felt this was a failing of the UK Government.
These people are unreal.
Would she have sent a cheque to HMRC if her tax payments one year were less than they would have been in the UK? Would she have forwarded a cheque to the Treasury if her house had appreciated faster than a similar UK house?
So where does she get off thinking that the UK Establishment should compensate her when her chosen environment gets tough?
She should be nailed to a wall somewhere.
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She may not be the brightest spark, but your comment is to say the least, intemperate.
She is understandably upset at the possibility of losing a chunk of her money and is lashing out indiscriminately. Of course the UK should not pick up the tab for any loss suffered by expats.who have chosen to live in Cyprus.
If one goes to live in a foreign country one should take the good with the bad and abide by the laws, rules and regulations of your hosts. We did in Spain for 10 years.
Here, I do speak from experience and to be honest the way the EU & Eurozone was going played a part in our decision to return to the UK.
NB the scowly face was NOT from me!
Last edited by: Roger on Tue 19 Mar 13 at 16:59
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>>but your comment is to say the least, intemperate.
Why would you say that? I think her words represent so much of what is wrong with the world. When its going good its all out for oneself, but when it gets tough, its someone else's fault.
So, I admit the comment is emotional and heartfelt, but I also feel that is an appropriate position in this case.
And who cares who the scowly face is from?
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>>There are plenty of working families who have to budget extremely carefully, down to an nth degree....and who are worse off than some on benefits <<
Sadly there is a certain section of the commentariat who simply cannot understand why a person in work would see an unfairness in having a lower quality of life as a result of choosing work over state dependancy.
>>I wonder how the truly enormous televisions, relatively new cars and somewhat decent holiday every year are afforded...when the next family is struggling and has nowhere near that standard of living.<<
Last year I looked at what benefits my wife and I would get when a baby arrives - it was so much that we would be better off if one of us worked and one stayed at home as the tax credits and benefits amounted to a lowish full time wage - if we both carried on working there was no net gain. Once you have a child you open the benefits entitlement considerably as a low earner.
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www.bbc.co.uk/news/uk-21847013
An RAF plane carrying 1m euros is flying to Cyprus from Britain as a contingency measure to provide military personnel with emergency loans, the Ministry of Defence says.
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I am a but simple man when it comes to economics. Could someone please explain. We are in £Billions worth of debt as I understand it. So who exactly do we owe this money to?
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Whoever who has bought UK government securities and bond both within and outside the country. Banks, pension funds, foreign governments, individuals etc. If you have any government investments bought through NS and I include yourself.
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It's all electrons in computers somewhere!
Could be wiped out by a worldwide internet meltdown, so is it real or not?
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I think it's the banks Fullchat <:) I've heard that many different explanations why we are in this crisis and they all contradicted each other.
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Money is a funny thing. This is an old story, but worth repeating IMHO...
It is a slow day in the small Minnesota town of Marshall , and streets are deserted. Times are tough, everybody is in debt, and everybody is living on credit.
A rich tourist visiting the area drives through town, stops at the motel, and lays a $100 bill on the desk saying he wants to inspect the rooms upstairs to pick one for the night.
As soon as he walks upstairs, the motel owner grabs the bill and runs next door to pay his debt to the butcher.
The butcher takes the $100 and runs down the street to retire his debt to the pig farmer.
The pig farmer takes the $100 and heads off to pay his bill to his supplier, the Farmer's Co-op.
The guy at the Farmer's Co-op takes the $100 and runs to pay his debt to the local prostitute, who has also been facing hard times and has had to offer her "services" on credit.
The hooker rushes to the hotel and pays off her room bill with the hotel owner.
The hotel proprietor then places the $100 back on the counter so the rich traveler will not suspect anything.
At that moment the traveler comes down the stairs, states that the rooms are not satisfactory, picks up the $100 bill and leaves town.
No one produced anything. No one earned anything... However, the whole town is now out of debt and now looks to the future with a lot more optimism.
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>>No one produced anything. No one earned anything...
Rubbish.
The butcher produced steaks and earned $100 from the hotel.
The pig farmer produced pigs and earned $100 from the butcher.
The Co-op produced feed and earned $100 from the farmer.
The lady produced, errr, well, let us gloss over that one, and earned $100 from the Co-op
The hotel owner produced a hotel room and earned $100 from the, errr, lady.
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>> The hotel owner produced a hotel room and earned $100 from the, errr, lady.
Local state and county taxes have taken the 100 bucks from the hotel owner so he has nothing.
The Butcher, pig farmer, co-op, and hotel owner have all earned money so now all owe 20 dollars to the IRS, so everyone is now worse off, and the tourist has been fleeced of 100 bucks.
Only the hooker is ok, because she does not pay tax.
Its a potted history of civilisation anywhere in the world really.
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Congratulations Mapmaker! You missed the point of the story entirely. :-)
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>> I think it's the banks Fullchat <:)
Cant be, we borrowed the money to buy the banks....
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>> I am a but simple man when it comes to economics. Could someone please explain.
>> We are in £Billions worth of debt as I understand it. So who exactly do
>> we owe this money to?
>>
Mainly UK and other pension funds.
UK pension funds are forced to hold a large % of their funds in Government securities eg debt.
And when pension funds pay pensions out, the funds that pay those pensions get their income from interest on Government Debt. (Annuities)
If the UK defaulted on its debt, most private pensions would go bust as would many private pensioners as a result.
I have to say at this point I have always believed anyone who trusts ANY Government (of any political persuasion) is a naive fool. None of my pension is invested in any Government debt. Nor will it ever be.
Unless the 2015-20 Government drastically cuts spending - by 20% or more ) , or the economy starts growing at over 2% pa plus - unlikely given the European economic shambles which is getting worse - I expect another IMF bailout very likely by 2019-2020.
That would make this "austerity" look like the summer teaparty which it is.
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Cyprus bailout - madf
