Posted by greydogg, 99GetSmart
* POLITICAL FALLOUT BEGINS: FORMER CYPRUS PRESIDENT NAMED IN LOAN WRITE-OFFS LEADING TO BANKING INSOLVENCY
By Tyler Durden, zerohedge
A few days ago, when news hit that Cyprus has begun investigating who the people were who had managed to pull cash out of nation’s insolvent banks, both during the capital control “blackout” period and previously, we asked “how much longer will the rule of law remain in Cyprus once full blown class warfare is unleashed, and the 99% are generously handed the list of the 1% who were “informed” enough to pull their money from the flaming sovereign equivalent of Bernie Madoff, while every other uninsured depositor is facing losses of up to 80%, and soon 100%?” We may get the answer much sooner than expected, as the first iteration of this list: one naming the beneficiaries of millions of loans written off by the now insolvent Cyprus banks and therefore indirectly responsible for the “impairment” of the banks’ depositors, was released yesterday by Greece’s daily Ethnos newspaper. But what virtually assures substantial political fallout is that among the people listed is Cyprus’ former president, George Vassiliou.
Kathimerini summarized the situation as follows:
A list of Cypriot companies and politicians that allegedly had millions of euros in loans written off by the three Cypriot lenders at a center of an unprecedented banking crisis on the Mediterranean island has been forward to Cyprus’s parliamentary ethics committee after its publication in Greece’s daily Ethnos newspaper.
According to the revelations, Bank of Cyprus, Cyprus Popular Bank (Laiki) and Hellenic Bank — which were earlier this week acquired by Greece’s Piraeus Bank — has forgiven companies, MPs and local authority officials millions of euros in loans over the past five years. The list reportedly features the names of politicians from all Cypriot parties except Social Democracy (EDEK) and the Social Ecology Movement (KKO).
Readers may or may not be shocked to learn that corruption and cronyism, in broad terms, was alive and well in Cyprus in the months and years leading to the failure of the local banking system with its publicly elected politicians at the very forefront:
According to Ethnos, Bank of Cyprus wrote off the 2.8-million-euro loan of a hotel with ties to the communist-rooted Progressive Party (AKEL) and forgave significant portions of many other loans. For instance a national labor union is said to have been forgiven 193,000 euros of a 554,000-euro loan. An unnamed company was forgiven 110,000 euros from a 1.83-million-euro loan, a prominent deputy of the centrist Democratic Rally (DISY) party saw 101,000 euros of a 168,000-euro loan written off and a company owned by the brother of a former minister of the conservative Democratic Party (DIKO) had 1.28 million euros of a 1.59-million-euro loan written off.
The list refers to several other MPs and the mayor of large city who allegedly had significant portions of their loans forgiven by Bank of Cyprus. Companies linked to a member of the bank’s board, to the daughter-in-law of a DIKO deputy and several others also appear to have been offered significant loan relief by the Bank of Cyprus.
As for Laiki Bank, it is said to have written off several loans taken out by MPs of AKEL and DISY. The bank also appears to have written off 5.8 million US dollars in debt from a company whose majority shareholder is said to be a well-known Cypriot politician. The ex wife of a senior ministry official and a company owned by a local ambassador also appear to have been facilitated. […]
* LIST RELEASED WITH 132 NAMES WHO PULLED CYPRUS DEPOSITS AHEAD OF ”CONFISCATION DAY”
Money transfers made within 15 days, namely from 1 until March 15. On Friday, March 15, had met the Eurogroup, which officially decided to impose a tax on deposits by companies and individuals in all financial institutions in Cyprus.
These 132 companies and individuals have withdrawn all deposits in euros, dollars and rubles, which were transferred to other banks outside Cyprus.
The disclosure of the list, which shows that the outflow of deposits from local banks other financial institutions outside Cyprus became massively raises suspicion that some had inside information about the decisions taken by the other 16 eurozone countries in exchange for financing deficits of the economy.
In listings, and the company is Loutsios & Sons Ltd, which carried 21 million deposit in a UK bank, while the owner of the company is alleged to have family ties with the President of the Republic, Nikos Anastasiadis.
The first column are names of companies and individuals in the second record of the amounts withdrawn in the third column refers to the amount withdrawn in the same currency, the currency in the fourth and the fifth and last column refers to the date of transfer. […]
READ / COMPLETE LIST@ http://translate.google.com/translate?hl=en&sl=el&u=http://www.sigmalive.com/news/local/38012&prev=/search%3Fq%3Dhttp://sigmalive.com/news/local/38012%26hl%3Den%26biw%3D965%26bih%3D699&sa=X&ei=IwZbUf6sH4S3hQelmYCQBA&sqi=2&ved=0CDAQ7gEwAA
* VIDEO: HOW 1% ASSET-HOLES’ OFFSHORE TAX HAVENS HIDE $21 – $32 TRILLION
Source: Washington’s Blog
McKinsey Chief Economist James Henry leads explanation in this brilliant 53-minute video tour of how the 1% hide $21 to $32 trillion in tax havens. The US top seven banks hide over $10 trillion, many top US corporations claim income losses, while the bottom 90%’s tax burden increases – in part to pay top corporations’ tax refunds.
Only the middle class and poor pay taxes.
Since 1966, inflation-adjusted annual income for the bottom 90% of Americans increased just $59, while the 1% increased income average by $625,000, and the 1% of the 1% increased average incomes by $18,700,000 per year.
Our choices seem to be only two:
- Arrest these asset-holes in leadership for crimes in unlawful wars and criminal economic fraud, or
- Surrender all previous Americans’ sacrifices for our freedoms, and damn our children to escalating psychopathic policies of war-murders and debt slavery.
The video is from Taxodus.
* FOR CYPRUS, THE PAIN IS ONLY JUST STARTING
By Tyler Durden, zerohedge
If the suffering, yet docile, Cypriot serfs thought deposit confiscation would be the end of their problems under the European feudal system, they are about to be shocked. Because as part of their banking sector bailout, the country is set to get a “loan” from the Troika, a loan which comes with a Memorandum of Understanding, aka a “blueprint for austerity”, with dictates terms for government revenue increases and spending cuts (of the variety that nearly caused America’s leader to blow a gasket when he was describing the untold devastation that would result if the rate of acceleration in US budget spending dared to be slowed down even by a tiny bit). Today, a draft of the revised Cypriot MOU being prepared by the head of the IMF mission to the island nation, Delia Velculescu, leaked and can be found in its 24 page entirety here.
However, for the benefit of our Cypriot readers, here is the important part: the listing of the anticipated austerity tsunami coming, not to mention healthcare system, “pension reform” changes and other proposals the ECB and the IMF are imposing on Cyprus as part of their generosity to keep the recently insolvent country as a well-behaving serf in the Eurozone.
- Freeze public sector pensions
- Increase the statutory retirement age by 2 years for the various categories of employees
- Reduce preferential treatment of specific groups of employees, like members of the army and police force, in the occupational pension plans, in particular concerning the contribution to the lump-sum benefits;
- Reduce certain benefits and privileges for state officials and senior government officials, in particular by
suspending the right to travel first/business class by state officials,
senior government officials and employees with the exception of
- Increase excise duties on energy, i.e., on oil products, by increasing tax rate on motor fuels (petrol and gasoil) by EUR 0.07
- Increase the standard VAT rate from 17% to 18%.
- Introduce a tax of 20% on gains distributed to winners of betting by the National Lottery for winnings of EUR 5,000 or more
- Increase fees for public services by at least 17% of the current values
- Increase excise duties on tobacco products, in particular on fine-cut smoking tobacco, from EUR 60/kg to EUR 150/kg. Increase excise duties on cigarettes by EUR 0.20/per packet of 20 cigarettes.
- Introduce a permanent contribution of 3% on pensionable earnings to Widows and Orphans Fund by state officials who are entitled to a pension and gratuity. Introduce a contribution of 6.8% on pensionable earnings by officials, who are entitled to a pension and gratuity but are not covered by the government’s pension scheme or any other similar plan;
- Actuarially reducing pension entitlements from the General Social Insurance Scheme by 0.5% per month for retirements earlier than the statutory retirement age at the latest from January 2013, in line with the planned increase in the minimum age for entitlement to an unreduced pension to reach 65 (by 6 months per year), between 2013 and 2016;
- Ensure a reduction of seasonal hourly paid employees by 992 from 1806 in 2012 to 814.
- Implement a four-year plan as prepared by the Public Administration and Personnel Department aimed at the abolition of at least 1880 permanent posts over the period 2013-2016.
- Ensure additional revenues from property taxation of at least 70 million by updating the 1980 prices through application of the CPI index for the period 1980 to 2012
- Increase the statutory corporate income tax rate to 12.5%; Increase the tax rate on interest and dividend income to 30%.
- Increase the bank levy on deposits raised by banks and credit institutions in Cyprus from 0.11% to 0.15% with 25/60 of the revenue earmarked for a special account for a Financial Stability Fund
- Undertake a reform of the tax system for motor vehicles, based on environmentally-friendly principles, with a view to raising additional revenues, through the annual road tax, the registration fee and excise duties, including motor fuel duties.
- Ensure a reduction in total outlays for social transfers by at least EUR 113 million through: (a) the abolition of a number of redundant and overlapping schemes such as the mothers allowance, other family allowances and educational allowances; and (b) the abolition of supplementary allowances under public assistance, the abolition of the special grant and the streamlining of the Easter allowance for pensioners.
- Ensure a reduction of at least EUR 29 million in the total outlays of allowances for employees in the public and broader public sector by i) taxing pensionable allowances provided to senior government officials and employees (secretarial services, representation, and hospitality allowances) in the public and broader public sector ii) reducing the allowances provided to broader public sector employees and reducing all other allowances of broader public sector employees, government officials and hourly paid employees by 15%; and iii) reducing the daily overseas subsistence allowance for business trips by 15%. Ensure a further reduction the subsistence allowance of the current allowance when lunch/dinner is offered by 50% (20% – 45% of overseas subsistence allowance instead of 40% – 90% currently paid).
And last but not least:
- Increase excise duties on beer by 25% from EUR 4.78 per hl to EUR 6.00 per hl per degree of pure alcohol of final product. Increase excise duties on ethyl alcohol from EUR 598.01 to EUR 956.82 per hl of pure alcohol. […]
READ CYPRUS MEMORANDUM OF UNDERSTANDING (pdf) @ http://mignatiou.com/wp-content/uploads/2013/04/EU_DraftMemorandumforCyprus-01APRIL20131.pdf
* DEBT = SERFDOM
By Charles Hugh Smith, Of Two Minds
Debt-serfdom and the dominance of Financial Power are two sides of the same coin.
Let’s be clear about three things:
1. Too Big to Fail financialization is the metastasizing cancer that has crippled democracy and capitalism.
2. Financialization feeds on expanding debt and cannot survive without it.
3. Debt is serfdom. I have covered this in depth for years:
The New Road to Serfdom: A Negative-Equity Mortgage (May 9, 2006)
The Company Store, Debt and Serfdom (October 24, 2008)
Debt-Serfdom Is Now the New American Norm (October 18, 2011)
The Origins of American Debt-Serfdom (October 19, 2011)
EU Fiscal Union = EU Debt Serfdom (December 7, 2011)
Debt Serfdom in One Chart (May 4, 2012)
The Road to Debt-Serfdom (January 25, 2013)
There are three key dynamics to debt-serfdom:
A. The serf is never free of debt, i.e. he/she is programmed to being indebted for life.
B. Most of the serf’s income is devoted to servicing debt.
C. Most of the debt is unproductive: marginal-utility college education, needless auto loan, leveraged McMansion that loses value in the inevitable speculative bust, and so on.
There are many ways to state these fundamentals and shelfloads of books have been written to describe the many mechanisms of financialization and serfdom, but we can summarize the dynamics in a few additional points:
4. Financialization requires a corruptible, highly centralized State that enables the extreme concentration of financial assets and power. Recall that debt is the banks’ primary asset; every loan a debt-serf takes adds to the banks’ wealth and power:
5. This creates a feedback loop: the more concentrated the financial wealth and power, the more readily it can corrupt/influence the Central State to grant it quasi-monopolies and the privileges needed to gather even more concentrated power. This additional power makes it even easier to buy control of the State machinery. Democracy is reduced to a PR facade.
6. The Financial Powers need the Central State to encourage debt, which is the lifeblood of financialization. Without the State enabling and pushing debt (student loans, subsidized mortgages, mortgage interest deductions, Federal deficit spending funded by Treasury debt, etc.), the Financial Powers (i.e. the Dark Side) would be unable to continue concentrating wealth and power via metastasizing financialization, i.e. the dependence on ever-greater debt and leverage to generate profits, growth and taxes. […]