The Confusing Bailout of Cyprus

Yesterday afternoon the Cypriot Parliament rejected the European Union proposal to tax all bank deposits within the one-million strong island nation between six and nine percent, depending on income, in order to secure a much needed $13 billion bailout for the near bankrupt government. The vote was unanimous, and the citizenry cheered loudly with its approval.

Europe is now pissed because Cyprus will go bankrupt, and they will weaken Europe's economic house, and they will likely need another, far bigger bailout in the future if they do not approve this one, and they are now both sitting, or more accurately drowning, ducks in financially unstable waters.

Which is the reason why Europe wanted to include this tax on deposits in the first place, because the few nations that actually followed the rules (okay, the one nation - Germany) are sick and tired of paying up a couple billion here, a few more there to cover for their loose spending EU compatriots, and want them to start putting some of their own skin in the game now.

And now that Cyprus has stood defiantly against this proposal, the EU is likely to cave and offer a bailout proposal with fewer strings and the Cypriot government's response is to reach out to Russian officials for their possible financial support, which would likely involve leasing of Mediterranean Sea natural gas and oil deposits to the Kremlin in exchange.

So the Cypriot government's rejection of this measure, which is essentially confiscation of citizen's wealth, was led by communist and socialist members of parliament who are now seeking help from a nation that already has Europe in a stranglehold by its control of oil and natural gas lines, and which will want repayment in precious national resources to bail them out even though its essentially just trading one form of confiscation for the other.

Guess you can say it's all Greek to me.