They’re coming down to the wire today.
- There’s a traditional bank holiday in Cyprus tomorrow.
- The ECB (European Central Bank) has set tomorrow as its deadline for continuing to support Cypriot banks.
- Cypriot leaders are meeting with officials of “the troika” — the Eurozone, the ECB and the IMF — in Brussels … starting around Noon (our time).
- Cyprus still doesn’t have much of a plan to come up with the full 6-7B the troika wants to see.
The Telegraph may have shut down its live blogging for the weekend, but another newspaper, The Guardian, has stepped into the breach to do it today.
Understanding macroeconomics requires some recognition of the “we’ve always done it this way” factor. This article from The Daily Beast goes over the historical details that are motivating Europeans to act this way.
One thing to remember in all this, when you see pictures of protesters in the streets, dysfunctional behavior on the part of politicians, and inflexibility of potential creditors is that … Cyprus is already bankrupt, in fact if not in name. Everyone is in denial … but sometimes it’s best to just admit it, and start over — here’s my friend Tim Worstall voicing that opinion. The trendy phrase this week to describe that choice is to do a “full Iceland”, since this is what that country did 4-5 years ago.
Here’s a human interest story about what it’s like in Cyprus this weekend (not required). The daily ATM withdrawal limit at Laiki bank was cut by 60% today — other banks followed suit. But, then there’s this:
French Finance Minister Pierre Moscovici put it more bluntly: "To all those who say that we are strangling an entire people ... Cyprus is a casino economy that was on the brink of bankruptcy,"
Tweets from inside the pre-big-meeting in Brussels suggest that the troika is not impressed with the solidarity fund that Cyprus has put together. Also, intelligence officials reported inflows of 12B euros worth of dirty money from Russia within the past year. That is over twice what the troika is looking for as the Cypriot contribution.