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Thread: Cyprus bailout answers a few questions

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    Default Cyprus bailout answers a few questions

    When the $hit hit the fan here in Ireland, we'd no shortage of experts both inside and outside Dail Eireann telling us what should be done. While most of these solutions could neither be proved nor disproved at the time, Cyprus's current difficulties clears the air in a few areas that were pushed by Fine Gael, Labour, Sinn Fein, Shane Ross and various pop economists at the time of the bailout.

    Burn the bondholders. Cyprus are in the situation they're in because Greece's bondholders got burned which, in turn, led to the Cypriot banks becoming insolvent. Because the Irish banks relied far more heavily on bonds than on deposits for the financing requirements, the fallout from an Ireland burnout would have been way more catastrophic and, while the brunt of the effects may have been heaviest in Britain and Germany, we would have been right royally screwed ourselves as a result.

    Tell the EU to fukk off. Cyprus did and it got them nowhere. After just a few days, they're back to square one with their tails between their legs.

    Okay, a lot of this may seem unfair to smaller economies but, hey, that's life. When your back is to the wall, the guy with the money has you by the short and curlys and your only way out is to swallow your pride and make the best of a bad situation. Some day, the boot may be on the other foot.

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    Politics.ie Member General Urko's Avatar
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    But Cyprus are really small fry in EU eyes!
    What has been the attitude of the Turkish side of it, I think it has been to tell them to seek a bailout from Turkish banks.
    BTW The Turkish side is not in the EU despite having voted to join it!

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    Politics.ie Member stopdoingstuff's Avatar
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    Cyprus did not tell the EU to fk off.
    Faoi mhóid bheith saor

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    Quote Originally Posted by Prof Honeydew View Post
    When the $hit hit the fan here in Ireland, we'd no shortage of experts both inside and outside Dail Eireann telling us what should be done. While most of these solutions could neither be proved nor disproved at the time, Cyprus's current difficulties clears the air in a few areas that were pushed by Fine Gael, Labour, Sinn Fein, Shane Ross and various pop economists at the time of the bailout.

    Burn the bondholders. Cyprus are in the situation they're in because Greece's bondholders got burned which, in turn, led to the Cypriot banks becoming insolvent. Because the Irish banks relied far more heavily on bonds than on deposits for the financing requirements, the fallout from an Ireland burnout would have been way more catastrophic and, while the brunt of the effects may have been heaviest in Britain and Germany, we would have been right royally screwed ourselves as a result.

    Tell the EU to fukk off. Cyprus did and it got them nowhere. After just a few days, they're back to square one with their tails between their legs.

    Okay, a lot of this may seem unfair to smaller economies but, hey, that's life. When your back is to the wall, the guy with the money has you by the short and curlys and your only way out is to swallow your pride and make the best of a bad situation. Some day, the boot may be on the other foot.
    Typical craven grovelling by an apologist for FFailure. Iceland is far smaller than Cyprus [which is far smaller than Ireland], but stood up to the bully banksters and is growing with falling unemployment.

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    Politics.ie Member BlackLion's Avatar
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    Quote Originally Posted by CarnivalOfAction View Post
    Typical craven grovelling by an apologist for FFailure. Iceland is far smaller than Cyprus [which is far smaller than Ireland], but stood up to the bully banksters and is growing with falling unemployment.
    If Iceland was apart of the EU then things would be different.
    All men dream: but not equally. -T. E. Lawrence

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    Quote Originally Posted by CarnivalOfAction View Post
    Typical craven grovelling by an apologist for FFailure. Iceland is far smaller than Cyprus [which is far smaller than Ireland], but stood up to the bully banksters and is growing with falling unemployment.
    Do you think everything is rosy in Iceland? You should try reading beyond P.ie. A lot of screwed over people there.

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    Quote Originally Posted by CarnivalOfAction View Post
    Typical craven grovelling by an apologist for FFailure. Iceland is far smaller than Cyprus [which is far smaller than Ireland], but stood up to the bully banksters and is growing with falling unemployment.
    Iceland is growing in kronur terms but the kronur has more than halved in value since the crisis erupted. The kronur is also no longer a convertible currency as heavy currency controls have been imposed and its value is set by whatever amounts of foreign currency the Icelandic Central Bank periodically buys.

    There is still an enormous legacy of private debt to be resolved. During the boom, Icelandic mortgages were based on loans in foreign currency. However, as the assets against the mortgages are valued in kronur, most homeowners are now in negative equity way beyond anything experienced here.

    In convertible currency terms, most Icelanders are now bankrupt. Unless they join the EU and adopt the euro, the only way out is to hope that exports by their primary resources sectors (mostly fishing and aluminium) generate enough foreign currency to allow the kronur to return to convertability. But until then, statistics regarding economic performance are as reliable as those of the Soviet Union and Eastern Europe before the Wall came down.

    As regards standing up to the bankers, Iceland's biggest external post-crash problem was the debt resulting from Icesave. The parliament twice rejected the terms reached with the Brits and the Dutch but they still ended up a deal that wasn't noticeably different from that proposed in the first place.

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    Politics.ie Member Ulster-Lad's Avatar
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    The main thread on this did not answer the questions of the OP??
    ‘The Great only appear great because we are on our knees: Let Us Rise!’ “ (James Larkin)

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    Politics.ie Member mido's Avatar
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    Quote Originally Posted by Ulster-Lad View Post
    The main thread on this did not answer the questions of the OP??
    answer here from 2 months ago

    http://www.politics.ie/forum/economy...ign-banks.html
    Pity the nation divided into into fragments, each fragment deeming itself a nation - Khalil Gibran

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    Quote Originally Posted by mido View Post
    In either case the thread should be closed or merged.
    ‘The Great only appear great because we are on our knees: Let Us Rise!’ “ (James Larkin)

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