Continuing Weirdness In Europe

It’s all happening live:

• Banks in Cyprus are still not open. Now they say Thursday.
• The rumors are that withdrawals may be limited to 30 Euros. Leaked memos indicate that bank employees haven’t yet been told what the limits will be (probably so they don’t tell their friends and family).
• A poll by Stern (the largest news magazine in Germany) shows that over half of the German population no longer believes their deposits within Germany are safe.
• Cypriot government opposition to its largest private bank taking (Bank of Cyprus) over the emergency loans (ELA) issued by the European Central Bank (ECB) to the second largest bank (Laiki) was apparently over fears that the “better” bank will not be able to continue payments on that many loans for more than about 6 months.
• Fitch (a rating company) has downgraded the ratings of Cypriot banks, and its government. Laiki Bank is now rated as “in default” even though it hasn’t been open for 2 weeks.
• There were large protests of students on Tuesday in the Cypriot capital of Nicosia. Only 3K, but that is proportional to 1,200K in the U.S. How would our country behave if there were a million students marching in D.C.?
• The U.K. sent a new shipment of cash to British citizens in Cyprus. It’s 13 times larger than the one last week.
• The final percent for the “haircut” won’t be announced until Friday. They are talking up to 80%, with it taking up to 7 years to clear out claims on the other 20%.
• British expatriates and retirees around the Mediterranean have been calling in to their financial advisors for advice about the safety of their money in the PIGS.
• Sheesh: “Eurogroup president Jeroen Dijsselbloem is at it again. He has now reportedly said that a levy on wealth is defendable in principle. He adds that the majority of Cyprus deposits aren't savings.” [emphasis added]

Also Paul Krugman (a liberal) agrees with the view of Tim Worstall (a conservatives and/or libertarian) that I discussed on Monday — that Cyprus might as well declare bankruptcy, leave the Eurozone, and start fresh.