Perdido 03

Perdido 03

Tuesday, March 19, 2013

Cyprus Says No To ECB/IMF Screw Job

A resounding no on this vote:

The Cypriot parliament rejected a planned levy on bank deposits on Tuesday, throwing a European bailout plan for the tiny economy into disarray.

The vote was overwhelming, 36 with against and 19 abstentions, and brings Cyprus to the brink of financial collapse.

Shortly after the vote, the euro fell 0.8 of a cent to $1.2874, its lowest level for three months. The euro has been on the slide since it became clear that even the government's own party would not stand behind the deal.

News that MPs had resoundingly rejected the bailout was greeted with applause and cries of "bravo" from the crowds outside the Cyprus parliament, according to those at the scene.

MPs in the main government party abstained, and most of the other members of the tiny legislature else voted against. There were no votes in favour of the deal.

There was not much of a reaction on the American markets this afternoon to this vote:

No market panic in America tonight, where the Dow Jones industrial average just closed up a measly 3.8 points at 14455.

Bloomberg TV is asking whether the financial markets are 'tiring' of the latest developments in Europe. A Wall Street trader, though, flags up that volatility in the markets is rising.

And Jonathan Golub, chief US Market Strategist at UBS, reckons investors have been ignoring 'tail risks', and that markets will be around 8% lower by the end of the year.

But there was a celebration in Cyprus:

I just spoke to Yiannis Mouzakis in Cyprus, who tells me that the mood in Nicosia was "celebratory" after MPs sensationally voted down the bailout in the face of public anger.
Judging by the singing, there was a sense of pride...
But people understand it will not be easy - and that the days ahead will be difficult.
Yiannis confirmed that the mood of the crowds was very different from the protests we've seen in Athens, with "a lot of singing, and a bit of chanting". Slogans included "It will not pass"; "Cyprus belongs to the people" and "The people united will never be defeated".

I heard they're flying Randi Weingarten in to re-negotiate the deal for a second vote...

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