‘Cyprus loan deal is like planting a bomb in the financial system’

a01d000 arp3478745 ‘Cyprus loan deal is like planting a bomb in the financial system’

He added that the government’s plan is like planting a bomb in the structure of the financial system itself. Adamides’ thoughts were echoed by thousands of high school and university students on Tuesday, as they marched to the presidential palace in the Cypriot capital of Nicosia. The demonstrators chanted slogans and said their future had been stolen. Cyprus’ bailout plan has angered the island nation, as the government threatens to take a 40 per cent tax from accounts held in the country’s two largest banks. Financial institutions across the country are shut down until Thursday to prevent a massive run on accounts.RT: You’re in the Cypriot capital – how are people responding to the financial turbulence? And how much patience do you think they have left?Chrysostomos Adamides: The people are shocked because at the end of the day they did not expect these decisions from the Eurogroup. I don’t think it’s correct to speak for a bailout. This is not a bailout. It can be best described as an overnight assassination. Because with the decision that the Eurogroup has taken, they have pretty much destroyed 40% of the economy and now they will also add on top of the debt problem that we already have, another loan, and you have to understand that the math will not work.RT: You talk about 40% of what they call taxes, 40% being taken out of certain various bank accounts with more than 100,000 euros. Not just the big players, the little average people are also being hurt by this. The banks are closed until Thursday – how are people expected to survive?CA: Obviously we’re facing a new paradigm in the EU. This is the first time that this has been done but obviously you do understand it’s like planting a bomb in the structure of the financial system itself. Therefore I can’t see how any investor or people can keep their money in the banks when now that we will have a debt problem twice or more as bad as it was before. Obviously they will be afraid for a new levy on bank deposits so how are they expected to keep their deposits in the bank and if they are not, how do the banks expect to continue?RT: The head of the largest Cypriot bank resigned after it was announced that the Bank of Cyprus will inherit billions of toxic assets from Laiki bank. Do you believe that the country’s banking system will withstand such a challenge?CA: This has been done elsewhere, we all know the example of Greece. And the head of the bank of Cyprus has resigned for a very good reason because he obviously acknowledges that they cannot go on with these terms and conditions demanded by the Troika. Therefore, there is no other solution. They should have said no to these demands from the beginning and if they would like us to continue as partners in the EU, then obviously we need to remain partners and not just be pushed around because of our political position and because of the problems we’ve been facing since 1974 and the illegal occupation of Turkey.RT: A lot of the bankers on Cyprus have been pressured from Brussels by the EU politicians there. However, at the end of the day, do you trust the bankers now?CA: That is a very funny question. Who can trust the bankers? Don’t forget that this whole debacle started from the banks themselves. Now we are being asked to trust the banks. This is a joke. It cannot be asked of the people to do that. What the regulators should have done is have the mechanisms in place since obviously they cannot control the market, to actually have a face save mechanism when things go wrong, to be able to control it somehow. Instead, in the EU they are still discussing about the mechanisms and every single bailout has new terms and conditions. We have seen this five times. No two bailouts are exactly the same in the Eurozone. And obviously this is not something that has started now. It’s been going on since the 70s.

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‘Cyprus loan deal is like planting a bomb in the financial system’

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