The “no” vote from Nicosia and wholesale decamp to Moscow is producing mixed signals all round
Brussels continues to salt the press with opinions and TINA ( there is no alternative) pieces this morning, the bottom line being that “we are not convinced there is an alternative to levying depositors, and total bailout put-line of a €10bn package from the eurozone”. But then, Dutch Finance Minister Jeroen Dijsselbloem, who chairs the meetings of finance ministers and probably drafted the release, said that the euro group “stands ready to assist Cyprus in its reform efforts.”
In Moscow, the man with the fib for every occasion, Barosso of Portugal, has told the Kremlin that “the EU Governments were not informed of the Cypriot decision” about a levy, and so the EC couldn’t warn them about it. Apart from EU Governments being a different group of people to the EC, Schäuble’s opening gambit of a 40% levy, and massive Russian bank deposit withdrawals on the Tuesday and Wednesday before the deal, this explanation makes sense.
And from the ECB soon after dawn today came a time-limit: accept the bailout deal by Monday, or else. Presumably a door somewhere in the Central Bank issued the threat, as Mario Draghi is hiding under a duvet somewhere in the attic.
So all the B-am-B axis has to offer are lies, obfuscation and threats. Elsewhere in Moscow, the situation is more complex still. Cypriot Finance Minister Michael Sarris continues to hold talks, hopeful that the Russian companies and individuals who already have $31 billion of deposits in Cyprus will affect Russian political opinion in his favour. But although Russian President Vladimir Putin has already called the levy “unfair, unprofessional and dangerous”, there were one or two signs of Kremlin back-pedalling overnight.
Sarris stressed yesterday that Cyprus is offering Russia “opportunities” including banking and natural gas assets in return for help in bailing out the island nation. He added pointedly, “We are asking for help clearly, but something that would make also economic sense for Russia,” Sarris told reporters in Moscow this morning before going back into the negotiations.
But a banking source with business interests in Russia suggested to me last night that Russian Finance Minister Anton Siluanov and his team are expressing anxiety about whether what the Cyprus team says it wants is really enough.
“I get the sense that they see the ten billion as something that will get the Cypriot government nowhere fast,” said the informant. “I think they’re right. There’s no point to the Russians giving too little and it being eaten up by more borrowing. So they need to decide what they want and how much they’re prepared to pay for it. The moot point then is whether Cyprus could swallow what they want.
But, as things start to heat up, you can always rely on a CDU MP to say something truthful and tactful. “Cyprus has rebuffed the outstretched hand of its partners. The vote is an act of collective unreason and the people of Cyprus must now pay a high price,” sympathised Hans Michelbach, a finance expert in the Merkel Government. Arbeit macht frei, and all that.
Stay tuned: this can only get sillier. And stand by for rebellion contagion in Greece.