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Former Bank of Cyprus CEO wins €2m in compensation compromise

That should go over large with the grannies and the rest of the poor schlubs who just had their deposits seized

Meanwhile, the Cyprus Parliament actually has to vote on the bail-in -- such oldthink!

Intense negotiations are under way between political parties amid public anger at a one-off levy of up to 10% being imposed on savers.
The 10bn-euro ($13bn; £8.6bn) deal agreed by the EU and IMF in Brussels marks a radical departure from previous international aid packages.

Under its terms, people in Cyprus with less than 100,000 euros in their accounts would have to pay a one-time tax of 6.75%. Those with sums over that threshold would pay 9.9% in tax.

Depositors will be compensated with the equivalent amount in shares in their banks.

President Anastasiades, who was elected only last month, is due to address the country shortly (from 18:00 GMT).

The president's Democratic Rally party - which has 20 seats in the 56-member assembly - needs support from other factions to ratify the bailout.

The speaker of the European Parliament, Martin Schulz, argued in a newspaper interview that there should be an exemption from the levy for savers, for example, who had less than 25,000 euros in their

"The solution must be socially acceptable," Mr Schulz, who belongs to Germany's opposition Social Democrats, told Germany's Welt am Sonntag newspaper.

The German Chancellor, Angela Merkel, defended the levy.

"With this deal, the responsible people are partly included in those countries and not only the taxpayers in other countries," she said at a party meeting in her home constituency.

"And I think it's right that we went down that road and I think it's a good step which will certainly make it easier for us to approve the help for Cyprus." [So, it's all about the Merkel re-elect? Huh? How does that work?]

The levy itself will not take effect until Tuesday, following a public holiday, but action is being taken to control electronic money transfers over the weekend.

Meanwhile, the vote, expected Sunday, has been delayed 'til Monday.

Reuters:

The proposed levies on deposits are 9.9 percent for those exceeding 100,000 euros and 6.7 percent on anything below that.

They would be compensated with shares in the banks. A political source told Reuters that, as a sweetener, Anastasiades would offer depositors equity returns, guaranteed by future natural gas revenues.

"Half of the value of the haircut will be guaranteed by natural gas proceeds," the source told Reuters

Cyprus is expecting the results of an offshore appraisal drilling this year to confirm the island is sitting on vast amounts of natural gas worth billions.

"I will gladly pay you Tuesday for a hamburger today." This is a sign that the finance-driven elites really are completely detached from the realities of ordinary citizens. What poor schlub of a depositor would perceive a forced exchange of cash with value now for paper of uncertain value later as anything other than extortion? It's bizarre!

According to a draft copy of legislation, failing to hand over the levy would be a criminal offence liable to three years in jail or a 50,000 euro fine.

Anastasiades's right-wing Democratic Rally party, with 20 seats in the 56-member parliament, needs the support of other factions for the vote to pass. It was unclear whether even his coalition partners, the Democratic Party, would fully support the levy.

Cyprus's Communist party AKEL, accused of stalling on a bailout during its tenure in power until the end of February, would vote against the measure. The socialist Edek party called EU demands "absurd".

"This is unacceptably unfair and we are against it," said Adonis Yiangou of the Greens Party, the smallest in parliament but a potential swing vote.

Many Cypriots, having contributed to bailouts for Ireland, Portugal and Greece - Greece's second bailout contributed to a debt restructuring that blew the 4.5 billion euro hole in Cyprus's banking sector - are aghast at Europe's treatment.

Cyprus received a "stab in the back" by its EU partners, the daily Phileleftheros said.

But it and another newspapers highlighted the danger of plunging the banking system into further turmoil if lawmakers sat on the fence.

"Even if the final agreement is wrong, if this is not approved by parliament the damage will be even greater," Politis economics editor Demetris Georgiades said in an editorial.

Nice little offshore banking sector you've got there. Be a shame of anything worse happened to it....

UPDATE Speculating freely:

Could it be... The looting from Granny is so odious... And the Cypriot Parliament is divided... That they reject the deal... The Cyprus banks collapse... And a bunch of Russian oligarchs (a) get screwed and (b) move their money to the City of London? And the Eurocrats think they can contain the contagion because, after all, it's only Russian hot money and nothing systemic?a

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