The Prodigal Greek

The Greek crisis through a different prism

Cyprus, current state of play

with 9 comments

Here is the current state of play regarding today’s vote, information from various local sources:

Session starts at 4pm local (GMT+2)

Cypriot Parliament: 56 seats

Anastasiades party ΔΗΣΥ (DISI): 20 seats

ΔΗΚΟ (DIKO) (coalition party): 8



Greens: 1


Independent: 1

Ironically, one of Anastasiades’s MPs is on a trip to Argentina – out of all places – rushing back for the vote.

Out of coalition party’s ΔΗΚΟ MPs, 5 expected to vote Yes, 2 undecided, 1 was against as of yesterday.

ΔΗΚΟ wants guarantees of ECB’s support of the banking system and commitment on the part of the troika that no added austerity measures will be required. The latter not going to happen.

27 out of 28 opposition MPs are expected to vote No: ΑΚΕΛ, ΕΔΕΚ, Greens, Independent MP, 1 ΕΥΡΩΚΟ MP.

There is a possibility that other ΕΥΡΩΚΟ MP and party president will vote Yes.

Total Yes votes can range between 27 and 30.

Central Bank is prepared for both eventualities. Widely reported that it has already secured 5 billion euros to address the expected withdrawals from the banking system.

This is the Central Bank’s depositor protection scheme. Note the scheme is designed per depositor – not deposit – per bank. A shared account of 200,000 euros in one bank translates into an aggregate of 100’000 euros per depositor and is considered protected.

Personal view:

No matter what today’s outcome, Cyprus’ banking system will not be the same ever again. If Germany’s intention was to reduce the size of it – closer to the eurozone average – they managed to achieve that with a masterful stroke in just one weekend.

Deposits flight combined with the sale of the Greek operations will probably leave the Cypriot banking system half the size it was on Friday night, even left with one systemic bank after restructuring.

Cannot see a smooth transition period without some form of capital controls.

By the time the dust settles, the Cypriot economy will sink and PIMCO’s adverse scenario will materialise. Many people did their best to make this a reality.


Written by Yiannis Mouzakis

March 18, 2013 at 10:15 am

Posted in Economico, Politico

Tagged with , , , ,

9 Responses

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  1. Do you know what will happen if the vote is tied 28-28?


    March 18, 2013 at 11:20 am

  2. […] is the Prodigal Greek, alias Yiannis Mouzakis, summing up things re the vote in the Cypriot Parliament and other […]

  3. I am far less concerned about the (short-term) consequences of the messing around with legal deposit insurance in Cyprus, possibly Greece and others. After all, a bank run has now been going on in the South for over 3 years and to the tune of almost 1 TREUR, and the Eurosystem has been able to handle it.

    My concern are the possible long-term consequenes for the rest of the Eurozone as a result of such messing around with principle and precedent, two of the pillars of confidence in financial markets.

    Take Austria; still triple-A rated by most agencies. Let some sudden drama erupt in Eastern Europe (where Austrian banks are heavily exposed) and there might be a fear of a run against Austrian banks. Not imaginable? Well, in the spring of 2009, a wrong article by Paul Krugman (he used wrong IMF figures to write about an impending collapse of the Austrian banking system) did just that. It required some heavy intervention (also by the IMF which immediately retracted their numbers) to keep things calm.

    How did I react then? Within 24 hours I had brought my savings into safety except for amounts covered by legal deposit insurance. Having now seen how quickly a legal deposit insurance can be done away with, I would now do it in less than 24 hours. In fact, I would do it pre-emptively at the first sign of clouds. The Cypriot regular savers had 6 months time and didn’t do much about it because they trusted in the legal deposit insurance. They certainly won’t make that mistake again (nor will others).

  4. […] duas horas de Lisboa começa a votação. Neste momento, a repartição dos votos é esta. Entre 27 (saída do euro) e 30 votos (permanência) favoráveis ao confisco dos depósitos, que […]

  5. […] Yiannis Mouzakis, who blogs as The Prodigal Geek, has provided a breakdown of the Cypriot parliament, and concluded that the ‘Yes’ vote […]

  6. […] Yiannis Mouzakis, who blogs as The Prodigal Geek, has provided a breakdown of the Cypriot parliament, and concluded that the ‘Yes’ vote […]

    Cyprus Billion Dollar Blowout, Oops, Bailout and I | elcidharth

    March 18, 2013 at 4:01 pm

  7. […] See full story on […]

  8. […] Yiannis Mouzakis, who blogs as The Prodigal Geek, has provided a breakdown of the Cypriot parliament, and concluded that the ‘Yes’ vote […]

  9. HI – I do a radio show covering economics & politics on KPFA, Berkeley, California, that’s syndicated to 7 other stations across the U.S. and enjoys a worldwide listenership on the web. Could I get you to do an interview about the Cyprus situation, which has Americans very confused?

    Doug Henwood

    March 19, 2013 at 10:05 pm

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