Thursday, March 21, 2013

Cyprus Bailout Landscape Changes by the Minute
10:06 pm
Demonstrations Outside Cypriot Parliament Tonight

Just in from Russia: no financial assistance in the form of a new loan, no lowering of interest rate on current loan, slight extension of repayment date of current loan (not clear what the new date is). Cyprus had expected Russia to at minimum lower the interest rate and repayment date to closer to the date of repayment of financial assistance from Europe, which would be a start date of 2023. This is a disappointment.

Now in Nicosia: What was a unanimous agreement between the parties on the new plan to raise 5.8 billion disintegrated into a fight over restructuring of the banks. Laiki was to close but after the opposition party refused to agree, an new plan has formed to keep Laiki open with capital limitations in an effort to preserve around 8,000 jobs.

Expected from Brussels:  It is now believed that Troika may not accept the new plan.

With Troika deadest against Russian assistance, rejecting Cypriot Orthodox Church help on the grounds the it was undesirable “internal funding” and now the pending rejection of the current plan, one can’t help but wonder whether Troika will only accept the levy it first imposed.

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