A new plan examines the political leadership in Nicosia, Cyprus.
The plan was presented to the President Anastasiades the custody of government officials and technocrats.
The provisions of the proposed plan are:
1. Close or restructuring the Popular Bank of Cyprus.
2. Nationalization of Provident Funds and Parastatals
3. Small deposits haircut over 100,000 € near interest percentage (4%)
4. Create a National Support Fund will issue bonds that will include the state and church property and gold of the Republic.
Especially for the Popular Bank of Cyprus, it is considered to break into «good» and «bad» bank as government sources deny that the intention is to close the bank.
The initial agreement of the Eurogroup of 16 March is back on the table. According to the latest update of the proposal prepared by the government and will be presented this morning to the political leaders mowing down 4-5% on deposits over € 100,000. The deposits under € 100,000 will not be affected.
A “Special Support Fund” by the Ministry of Economy will be created.
The fund will be endowed with the gold of the state, real state and church property. For generating needed cash, Provident Funds will invest in it. According to information the proposal was modeled after the initiative of the deputy chairman of the Democratic Rally, Averof Neophytou and after a private meeting he had in his office in DISY party with the Troika.
The solution is completed by the extension of the repayment of the Russian loan.
Scenario refers to the levy as follows: 0-100.000 by 3%, from 100,000 to 500,000 7% and 9% above mean 500,000.
As regards banks, remains as an idea to create good / bad bank, and the introduction of ceiling on movement of capital and commitment for a period of up to normalize the situation.
It will also attempt an explicit reference in the Memorandum that there will be no new haircut in the future to curb the leakage of foreign companies and capital. Additional argument to remain foreign investors is the fact that the proposed haircut equivalent to interest for a year.
However all scenarios are open and us to Cyprus parliament to approve the proposal and the eurogroup to accept it, whereas a major problem, is the situation of the two large banks. In particular Popular Bank is the biggest problem as it is in a state that is not considered reversible. Analysts point out that the goal must now be to rescue the Bank of Cyprus which also has entered the» red».
Market cycles and political factors in private now report that the Popular Bank “is the main reason for the blackmail of Europe, a country cannot be left to go bankrupt for a bank.”
Nickolas C. Papanikolaou
Aegina March 21 2013