Interpreting Middle East Economic News and Analyzing Market Trends

Category: Bail-outs & Bail-ins

Last-minute Cyprus deal approved without vote, offshore finance industry killed in the process

The President of Cyprus reached a last-minute deal with EU technocrats representing the European Union, the European Central Bank and the International Monetary Fund, known as the Troika.  The deal calls for stealing deposits from the wealthiest depositors in the two largest banks.  Depositors at smaller banks are saved for now.  The President’s friends are safe since he instructed them to take their money out of Cyprus last week.  In the end, the Troika gets its two wishes; 1. collect money for its clients (EU banks and investors), 2. kills Cyprus’s offshore financial center.  In the process, Cyprus snubs Russia and Turkey.  Here’s more from Reuters:

   

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EU and IMF ask Cyprus to steal from its depositors in return for bailout

Euro zone finance ministers agreed yesterday on a long-awaited bailout package for Cyprus.  The country has been asking for a bailout of its banking system for a while, but the EU, as you can imagine, has had larger problems to deal with.  Cyprus was asking for $17 billion to shore-up its banking system, equal to its annual GDP.  However, EU finance ministers had a better idea; give Cyprus less than it was asking for, steal up to 10% of depositors money and raise corporate taxes. The theft will take place on Tuesday.  Banks will be closed on Monday so that the theft can take place without a hitch first thing Tuesday morning.  There are so many things wrong with this ‘package’, but first here’s a report from Reuters:

  

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Gulf Air can only be saved by government handouts

As Gulf Air struggles to stay relevant, Bahrain Air closes down.  Local unrest and a slowdown of business and tourist traffic to Bahrain is partially to blame, but the leading media in the region are missing the full story.  Here are two recent articles, the first on Bahrain Air and the next on Gulf Air.

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