News update 21/03/2013 - midday update

News update 21/03/2013 - midday update

Lots of meetings currently taking place in order to find a solution to the Cyprus situation. There is great momentum, and my personal belief is that we will have news by the end of the day. 

Europeans, Russians, even Americans are involved. The landing of Air Force One backup airplane in Larnaca was a show of concern, strength, solidarity by Barack Obama in my opinion (he could have landed in any NATO base in Turkey instead).

http://www.ant1iwo.com/kypros/2013/03/20/sthn-kypro-to-efedriko-air-force-one-ths/

Many geopolitical interests involved, you can gain a view in the excellent analysis below by Reuters.

Please keep in mind: regardless of what happens with Laiki, I am of the strong opinion that deposits below €100.000 in this bank will be safeguarded through a Good Bank - Bad Bank scenario. No panic.

The noon news summary:

Cyprus, European data send shares, euro lower

 http://www.reuters.com/article/2013/03/21/us-markets-global-idUSBRE88901C20130321

European shares and the euro dipped on Thursday because of concerns over Cyprus but a pick-up in Chinese factory activity and the U.S. Federal Reserve's commitment to its loose policy stance limited the losses.

Europe sets Cyprus bailout deadline, banks face cutoff

 http://www.reuters.com/article/2013/03/21/us-cyprus-parliament-idUSBRE92G03I20130321

The European Central Bank gave Cyprus until Monday to raise billions of euros to clinch an international bailout or face losing emergency funds for its crippled banks and inevitable collapse. Cyprus Seeks New Funding Plan as Bank Closure Extended

REUTERS GEOPOLITICAL ANALYSIS-Desperate for bailout, Cyprus plays risky geopolitical game

 http://www.reuters.com/article/2013/03/21/eurozone-cyprus-geopolitics-idUSL6N0CCIGC20130321

In the coming days, Nicosia may have to choose between a European bailout that punishes savers - including both ordinary Cypriots and much richer Russian investors - and a deal with Moscow with as yet unknown strings attached.

At worst, it could emerge with its financial system - by far the biggest contributor to the economy - in ruins along with relations with its closest allies.

The corralito risk (freeze on deposits)

 http://www.economist.com/node/21555972

THE word corralito does not need translating to Spaniards. They know it means the partial freezing of bank accounts that afflicted Argentina as money fled the country a decade ago. That is what makes it so frightening.

ECB announcement - Governing Council decision on Emergency Liquidity Assistance requested by the Central Bank of Cyprus

 http://www.ecb.int/press/pr/date/2013/html/pr130321.en.html

The Governing Council of the European Central Bank decided to maintain the current level of Emergency Liquidity Assistance (ELA) until Monday, 25 March 2013.

Thereafter, Emergency Liquidity Assistance (ELA) could only be considered if an EU/IMF programme is in place that would ensure the solvency of the concerned banks.

Russia may rethink euro in reserves after Cyprus -PM

http://www.reuters.com/article/2013/03/21/cyprus-russia-euro-idUSL6N0CD0NO20130321

(Reuters) - Russia may need to review the share of euros it holds in its central bank reserves over the euro zone's bungled handling of a bailout of Cyprus, Prime Minister Dmitry Medvedev was quoted on Thursday as saying.