Bag With Holes

Dear Friends,

Greetings. We are concentrating on two major areas this week, the banking crisis in Cyprus and the coming press restrictions in the United Kingdom.

If correct, it is possible that the banking crisis in Cyprus, to put it very concisely, could lead to a collapse of not only the banking system in Cyprus but trigger bank runs in Italy, Spain, Portugal, and Ireland which would lead to the collapse of the banking system in all of Europe and eventually spread to the US bringing down the worlds entire financial system. (Read the articles below.)

If this is what the world's (banking) elite are planning, (to bring about the rise of the antichrist and his one world government along with his mark), then this could very well be a catalyst that would take the world a great leap “forward” in the “end-game” plan.

We are not saying that this is definite, as the powers-that-be may still be experimenting and fine tuning their take over. In any case we do not have long to wait to see the outcome.

(As we are writing this, rioting has already started to erupt in Cyprus.)

The articles concerning freedom of the press in the United Kingdom are also of importance since Britain and its rule of law have always been an example to the rest of the world, not least their example as the bastion of a free press in what was once one of the worlds foremost democracies.

It does certainly seem to appear that the 'One Worlders' have really ramped up their timing to “ramming speed”, as one author so aptly put it.

As we always say, do not fret, God is in control. And as even one writer for a secular newspaper wrote; “We are blessed to be living in such times as these.”

Have an inspiring week ahead.

RT News (Taken from longer article.)

Francis I: The 'End of the World' Pope

Adrian Salbuchi is a political analyst, author, speaker and radio/TV commentator in Argentina.

Published: March 19, 2013

After the white-smoke "fumatta" signaled Argentina's Archbishop of Buenos Aires Jorge Bergoglio now heads the Catholic Church, the attention turns to significant, if subtle, signs surrounding the naming of the new Pope.

As soon as Msgr. Bergoglio was chosen, in the privacy of the Vatican Cardinal Giovanni Battista's first question to him was, "What name would you like to be known by?" to which he replied "I shall be called Francis I".

Moments later, when presented to the world from the Basilica overlooking St. Peter's Square Pope Francis announced to the world, "You know that the duty of the conclave was to give a bishop to Rome. It seems that my brother cardinals went almost to the end of the world to get him. But here we are." 

An interesting and significant phrase filled with foreboding in these troubling times, many perceive of apocalyptic worldwide turmoil.  Particularly to those lending credence to the prophesies of Irish Saint Malachy, a 12th century Archbishop of Armagh who had a vision when visiting Rome of 112 future popes that the Church would supposedly have from his days onwards. 

Malachy wrote down short emblematic and symbolic descriptions for each which have been fulfilled with uncanny precision to this very day. 

According to that vision, the 111th pope was Benedict XVI, whom he described as "The Glory of the Olive" which makes him the next-to-last pope.

Malachy could have very well been way off the mark by whole centuries when you consider that some popes like Pius IX in the 19th century reigned for a full 34 years, whilst others like last century's John Paul I only reigned for 33 short days.  And yet, as we enter 2013 - just months after 2012 with its symbolic End-of-Time aura - we suddenly have a new (the last?) pope being chosen.  

A lightning strikes St Peter's dome at the Vatican on February 11, 2013. Pope Benedict XVI announced today he will resign as leader of the world's 1.1 billion Catholics on February 28 (AFP Photo / Filippo Monteforte)

A lightning strikes St Peter's dome at the Vatican on February 11, 2013. Pope Benedict XVI announced today he will resign as leader of the world's 1.1 billion Catholics on February 28 (AFP Photo / Filippo Monteforte)

Many "firsts"

Even if Francis I is not the last pope, he certainly makes an interesting list of Catholic firsts: the first non-European pope in almost 1500 years; the first Jesuit; the first to choose Francis as his name; the first to succeed an abdicating pope in six centuries.

Why all the expectation?  Because for the 112th pope on Malachy's List he wrote these ominous words: "In the final persecution of the Holy Roman Church, there will sit Peter the Roman, who will pasture his sheep in many tribulations, and when these things are finished, the city of seven hills will be destroyed, and the dreadful judge will judge his people. The End."

If Malachy's List continues to hold in its uncanny precision to the very end, then Pope Francis I is the last pope of the Roman Catholic Church. 

On the very same day that Benedict XVI shocked the world with his unprecedented and unexpected resignation, a bolt of lightning struck St. Peter Cathedral's Dome, an image that went around the world.  "The hand of God" many thought, only this time not alluding to an Argentine football player but rather a sign of the times to come for the Vatican: the coming of an Argentinian pope.

The monsignors are said to take this and other prophecies - notably the Vision of Fatima - quite seriously, which might help to explain why other possible papal candidates who either carried the name Peter or came from Rome were discretely left aside so as not to tempt Destiny.

Either way, Francis I is as he himself unwittingly said, an "end of the world" pope coming as he does from far off Argentina.

***

CNNMoney

Europe gives Cyprus until Monday to agree to bailout

By Mark Thompson

March 21, 2013

LONDON (CNNMoney)

Cyprus has until Monday to agree a revised bailout with the European Union or face financial collapse and possible exit from the euro.

The island nation's banks are being kept afloat by emergency funding from the European Central Bank but that will cease early next week without a deal.

Banks in Cyprus have been shut all week, and are not due to reopen until Tuesday, to prevent a run on deposits.

The eurozone country initially agreed to impose a bank levy to qualify for a €10 billion bailout from the EU. Cypriots queued to empty cash machines at the weekend when they heard the news.

But that plan was rejected by Cypriot lawmakers Tuesday and officials have been scrambling since to come up with an alternative.

The European Central Bank said it would continue to provide liquidity until Monday but would only consider funding beyond then if Cyprus can resolve its differences with eurozone partners and the International Monetary Fund over how to fund a rescue.

"Thereafter, Emergency Liquidity Assistance could only be considered if an EU/IMF program is in place that would ensure the solvency of the concerned banks," the ECB said in a statement.

Cyprus has been brought to its knees by the losses that its oversized banking sector sustained on investments in Greece.

Eurozone policymakers want it to find €5.8 billion as part of any rescue to ensure the country's debt doesn't soar to unsustainable levels. The total funding required to recapitalize the banks and meet government commitments is almost equal to annual gross domestic product.

The proposed tax on all bank accounts, including deposits covered by the national guarantee scheme, outraged Cypriots and prompted widespread condemnation for undermining the principle that ordinary savers should not pay for bank failures.

But the EU is likely to insist that any revised deal includes a bank levy, perhaps limited only to accounts above the €100,000 limit on guaranteed deposits, because it does not want to be seen to be putting taxpayers money at risk to bail out wealthy Russians, who are estimated to account for about a third of all deposits in Cypriot banks.

"I still think it is probably inevitable there will be some kind of levy in the final package which we will agree upon," said Dutch finance minister Jeroen Dijsselbloem, who chairs Eurogroup meetings of eurozone finance ministers.

"And I hope, as many members in the Eurogroup hope, that it will be a fair package in the way it addresses the burden sharing in a fair way," he said in a speech to the European Parliament.

Marios Mavrides, a Cypriot lawmaker and member of President Nicos Anastasiades' Democratic Rally party, told CNN a revised plan to raise Cyprus' contribution could include nationalizing pensions of state and some private sector workers and the sale of state assets.

But a bank levy would still be required as part of the overall mix.

"We are going to eventually have to do it at a lower percentage," he said.

Russia may ease the pressure by agreeing to relax the terms of an existing €2.5 billion loan. Moscow has been angered by the plan to tax bank deposits but has larger business interests in Cyprus, which would suffer severe damage in the event of financial collapse.

Moody's rating agency estimates that Russian banks have lent $30 to $40 billion to Cyprus-based companies of Russian origin, equivalent to up to 20% of the banks' capital base.

***

Zero Hedge

Saxo Bank CEO: "This Is Full-Blown Socialism And I Still Can't Believe It Happened"

Authored by Lars Seier Christensen, CEO Saxo Bank; originally posted at his blog at TradingFloor.com,

March 17, 2013

It is difficult to describe the weekend bailout package to Cyprus in any other way. The confiscation of 6.75 percent of small depositors' money and 9.9 percent of big depositors' funds is without precedence that I can think of in a supposedly civilised and democratic society. But maybe the European Union (EU) is no longer a civilised democracy?

I heard rumours about this when I visited Limassol last week, but dismissed them as completely outlandish. And yet, here we are. The consequences are unpredictable, but we are clearly looking at a significant paradigm shift.

This is a breach of fundamental property rights, dictated to a small country by foreign powers and it must make every bank depositor in Europe shiver. Although the representatives at the bailout press conference tried to present this as a one-off, they were not willing to rule out similar measures elsewhere - not that it would have mattered much as the trust is gone anyway. It is now difficult to expect any kind of limitation to what measures the Troika and EU might take when the crisis really starts to bite.

If you can do this once, you can do it again. if you can confiscate 10 percent of a bank customer's money, you can confiscate 25, 50 or even 100 percent. I now believe we will see worse as the panic increases, with politicians desperately trying to keep the EUR alive.

Depositors in other prospective bailout countries must be running scared - is it safe to keep money in an Italian, Spanish or Greek bank any more? I dont know, must be the answer. Is it prudent to take the risk? You decide. I fear this will lead to massive capital outflows from weak Eurozone countries, just about the last thing they need right now. Even from the EU as a whole, I suspect, as the banking union is in place in most countries already.

Another open question is what will happen to the huge number of brokerages based in Cyprus? There is about 100 or more FX and other brokers currently operating under the relatively light Cypriot regulation. How will this impact the trustworthiness of these many small institutions? What IS the exact impact on the client deposits they might be holding in Cyprus? Will anyone dare to do business with them going forward?

This is a major, MAJOR game changer and the fallout will be with us for a long time to come. I believe it could be the beginning of the end for the Eurozone as this is an unbelievable blow to the already challenged trust that might be left among investors. Talk about a possible own goal.

Market reaction? it must be very good for gold - and for safe-haven countries like Switzerland, Singapore and economically more healthy non-Euro countries in, for example, Scandinavia. I would think the EUR and associated markets will be undermined by increasing lack of confidence when the full implications become clear for investors.

This is full-blown socialism and I still cannot believe this really happened.

Be careful out there...

***

Economic Collapse

Will The Banking Meltdown In Cyprus Be A "Lehman Brothers Moment" For All Of Europe?

Michael Snyder - -

March 20, 2013

Cyprus lawmakers may have rejected the bank account tax, but the truth is that the financial crisis in Cyprus is just getting started.  Right now, the two largest banks in Cyprus are dangerously close to a meltdown.  If they fail, depositors could end up losing virtually all of their money.  You see, the banking system of Cyprus absolutely dwarfs the GDP of that small island nation.  Cyprus is known all over the world as a major offshore tax haven, and wealthy Russians and wealthy Europeans have been pouring massive amounts of money into the banking system over the last several decades.  Yes, those bank deposits are supposed to be insured, but the truth is that there is no way that the government of Cyprus could ever come up with enough money to cover the massive losses that we are potentially looking at.  This is a case where the banking system of a nation has gotten so large that the national government is absolutely powerless to stop a collapse from happening.  If those banks fail, depositors may end up getting 50 percent of their money or they may end up getting nothing.  We just don't know how bad the damage is yet.  And considering the fact that many of the largest corporations and many of the wealthiest individuals in Europe have huge mountains of cash stashed in Cyprus, the fallout from a banking collapse could potentially be absolutely catastrophic.

So Cyprus needs to come up with some money from somewhere in order to keep that from happening.

Basically, there are three options at this point...

1) Even though the bank account confiscation tax was voted down today, there is talk that it could come back in another form.  This is really the only place inside of Cyprus where enough money can be raised to bail out the banks.

2) Cyprus could go back and beg the IMF and the EU for money, but the IMF and the EU have already said that they want depositors to share in the pain.

3) Cyprus could get the money that they need from the Russians.  This will be discussed in more detail later.

A lot of people will see the headlines proclaiming that Cyprus has voted against the wealth tax and think that everything is going to be okay now, but that is very far from the truth.

The reality is that this is only the first move in a very complicated chess game.  The problems for Cyprus are only just the beginning...

"This is not the end of the process, but instead kicks off a further round of negotiation with Moscow and Berlin," JPMorgan economist Alex White wrote in a research note. "The Cypriot authorities wanted to conduct the vote so that they could reaffirm the extent of their difficulties to the Europeans."

When the banks of Cyprus reopen in a few days, there is going to be a stampede of people trying to pull their money out of the banks.

In fact, this was starting to happen even before the "bank holiday" was declared.  According to The Sun, bank insiders were tipping people off about what was going to happen in the days leading up to the crisis...

But Russian oligarchs and big investors emptied accounts in the days beforehand, prompting claims they were tipped off by bank insiders. A source told The Sun: "It leaked out. Bankers warned their best clients. Government officials warned their friends and relatives.

"Billions disappeared from accounts in days, most from accounts held by Russians."

And according to David Zervos, we could see billions more euros withdrawn from banks in Cyprus once they reopen.  There will be mass panic as depositors scramble to reclaim their money before it can be taxed...

The die is cast. There is no going back for the Cypriots or the Eurozone leaders. As soon as the banks open in Cyprus there will be billions in withdrawals. The question of course is - "where will the money come from?". Well, if the parliament votes YES, then the Euros will have to come from the Eurosystem. But there is a glitch. The Cypriots have already borrowed 10b euro via the ELA and Target2. How can Mario just wire over 20 billion more (less the 10 to 15 percent haircut) for the Russians, and another 20 to 30 billion for the wealthy Greeks. What collateral will an economy with 20b in GDP post to get this cash? Unless Mario violates every collateral rule at the ECB, the Cypriot financial system will collapse even with a YES vote. Its a wonderful life - Cyprus style.

It may not even matter what Cyprus eventually decides to do about a "wealth tax".  The bank run that is about to happen may be enough to bring down the banks of Cyprus all by itself.

And of course people all over southern Europe are watching developments in Cyprus very closely.  As former British Chancellor of the Exchequer Alistair Darling recently noted, if depositors in southern Europe start getting nervous that their bank accounts will be targeted too, they will be likely to start pulling money out of the banks very rapidly...

"They have actually now said to people 'We will come after your deposits, no matter how small your savings are' and that seems to me to make it more likely that, if you are a saver in Spain or in Italy, for example, and you have just the sniff of the EU or the IMF coming your way, you will take your money out and you will get a run on the bank"

Cyprus could actually get out of this mess by turning to Russia, but the United States and Europe really do not want to see Russia gain so much control over that very strategic island nation.

So why would Russia get involved?  Well, it has been estimated that Russians have approximately $31 billion stashed in banks in Cyprus.  It is the favorite offshore banking destination for the Russian oligarchs.  Dennis Gartman recently detailed why the tiny island nation is so appealing to the Russians...

Cyprus has been their own private Switzerland for many years. Legal and non-legal Russian cash has swamped the banking system in Cyprus since the early 90's. The beauty of the island; the ease of admission too and exit from the island via boat or plane; the secrecy of the banking laws; the warm Mediterranean climate and the ease of which Cypriot authorities could be bribed and bought all worked to make Cyprus the center of Russian capital flight.

And right now the Russians are not happy at all that their money is being threatened.

In particular, the Russian mafia launders a lot of money in Cyprus.  The Russian mafia is not about to let anyone steal their money, and they have an international reputation for being absolutely brutal.  In the end, pressure from the mafia may have been one of the primary reasons why many Cyprus lawmakers voted against the bank account tax.  As Dennis Gartman astutely noted, by voting against the wealth tax they may have literally been saving their own lives...

"One could only laugh as such a comment; of course Cyprus was complacent about laundering. To think otherwise was and is naïve. Ah, but now you've stolen Russia money... or soon shall depending upon the vote in the Cypriot parliament... and that is dangerous... very. One does not steal Russian mafia money and get away with it. There are fewer statements of fact that are more certain, more factual, more unyielding than this statement. Russian Mafia figures do not take well to being stolen from, and they take even less well to be made fools of. We see no reason to mince words at this point: People will be hurt over this decision; some shall be killed."

And the Russians definitely do not want to see the banking system of Cyprus collapse.  In fact, proposals have been made that would provide the money necessary to keep it afloat.  But of course that money would not come cheaply.

Some of the proposals that Russia has put forward were summarized by the Daily Mail...

But in a move that has raised eyebrows, the Russian energy giant Gazprom offered Cyprus a plan in which the company will undertake the restructuring of the country's banks in exchange for exploration rights for natural gas on the island.

Representatives of the Russian company submitted the proposal to the office of Cypriot President Nicos Anastasiades on Sunday evening.

It is also rumoured that the Kremlin is privately offering to help bail out Cyprus in exchange for the right to use a naval base in the Greek part of the island.

In addition, as I wrote about yesterday, some Russian investors have stepped forward and have offered to buy majority stakes in the two largest banks in Cyprus.

So why hasn't Cyprus accepted help from Russia yet?  Well, it is a geopolitical thing.  Cyprus is a part of the EU, and European officials do not want Russia to become the dominant influence in Cyprus.

But if the IMF and the EU are not going to step up and help Cyprus, the Russian offers will become more tempting with each passing day.

Meanwhile, the attempted attack on bank accounts in Cyprus is making people nervous all over Europe.  For example, the following is whatGerman economist Peter Bofinger had to say about what the situation in Cyprus is doing to confidence in the European financial system...

Making small-scale savers pay is extremely dangerous. It will shake the trust of depositors across the Continent. Europe's citizens now have to fear for their money.

And if you don't think that this could ever happen anywhere else, you are just being delusional.

In fact, it is already happening.  In fact, the Finance Minister of New Zealand is now proposing that depositors in his nation should be required to "take a haircut" if any banks in his nation fail...

The National Government are pushing a Cyprus-style solution to bank failure in New Zealand which will see small depositors lose some of their savings to fund big bank bailouts, the Green Party said today.

Open Bank Resolution (OBR) is Finance Minister Bill English's favoured option dealing with a major bank failure. If a bank fails under OBR, all depositors will have their savings reduced overnight to fund the bank's bail out.

"Bill English is proposing a Cyprus-style solution for managing bank failure here in New Zealand - a solution that will see small depositors lose some of their savings to fund big bank bailouts," said Green Party Co-leader Dr Russel Norman.

"The Reserve Bank is in the final stages of implementing a system of managing bank failure called Open Bank Resolution. The scheme will put all bank depositors on the hook for bailing out their bank.

"Depositors will overnight have their savings shaved by the amount needed to keep the bank afloat."

But surely there will never be any major banking problems in the United States, right?

Well, large numbers of Chase customers that logged into their accounts on Monday discovered that a "computer glitch" had reset all of their account balances to zero...

Chase bank experienced a problem Monday that had customers scrambling to figure out where their money went.

JP Morgan Chase said it hadn't been hacked but was having a problem "related to an internal issue" as customers found their accounts showing zero balances.

Some customers shared their frustration on Twitter and showed screen shots of zero balances.

How would you feel if you suddenly discovered that you had no money in the bank?

Most Americans just assume that their money will always be there because their bank accounts are "guaranteed" by deposit insurance and by the full faith and credit of the federal government.

But that is exactly what the people of Cyprus thought too, and look how that turned out.

It would be hard to overstate how dangerous the situation in Cyprus is.  Yes, their nation is very small but their banking system is absolutely huge.

If the banking system of Cyprus fails, it could be a "Lehman Brothers moment" for all of Europe.  At this point, the entire European banking system is leveraged 26 to 1, and once European banks start to fail they could start falling like dominoes.

There is also a very strong possibility that Cyprus could be forced to leave the euro, and if that happens everyone will be wondering who will be next to leave the common currency.

So don't think for a second that the crisis in Cyprus is over.  The banking meltdown is just getting started, and the consequences could end up being far more dramatic than any of us could possibly imagine.

***

Business Insider

This Crazy Cyprus Deal Could Screw Up A Lot More Than Cyprus...

Henry Blodget

Mar. 16, 2013

Bank run in New York in 1933.

You can be forgiven for thinking that you don't need to give a hoot about what's going on in Cyprus this weekend.

After all, it's just a little island somewhere in the Mediterranean.

But what's going on in Cyprus could actually matter -- not just to the rest of Europe, but to the rest of the world.

Here's the short version of what's happening:

Cyprus's banks, like many banks in Europe, are bankrupt.

Cyprus went to the Eurozone to get a bailout, the same way Ireland, Greece, and other European countries have.

The Eurozone powers-that-be gave Cyprus a bailout -- but with a startling condition that has never before been imposed on any major banking system since the start of the global financial crisis in 2008.

The Eurozone powers-that-be (mainly, Germany) insisted that the depositors in Cyprus's banks pay part of the tab.

Not the bondholders.

The depositors. The folks who had their money in the banks for safe-keeping.

When Cyprus's banks reopen on Tuesday morning, every depositor will have some of his or her money seized. Accounts under 100,000 euros will have 6.75% of the funds seized. Accounts over 100,000 euros will have 9.9% seized. And then the Eurozone's emergency lending facility and the International Monetary Fund will inject 10 billion euros into the banks to allow them to keep operating.

Cyprus's government tried to explain this deal by observing that it was better than the alternative: Immediate bankruptcy and closure of the major banks. In that scenario, depositors would lose a lot more of their money. Businesses would go bankrupt. And tens of thousands of people would be instantly thrown out of work.

But, still, not surprisingly, news that deposits in Cyprus's banks would be seized triggered an immediate run on the banks.

Depositors rushed to ATMs and tried to withdraw their money before it could be seized.

But the ATMs weren't working. And the government has now made it impossible to transfer money out of the country.

So, assuming Cyprus's government approves the deal (still pending), depositors will have some of their money seized on Tuesday morning.

Now, half of these depositors are said to be Russian oligarchs and other non-residents. And unless you happen to have the misfortune of having an account in a Cyprus bank, you may not care much whether these depositors have their money seized.

After all, that was the risk they took for storing their money in bankrupt banks, right?

Well, yes, that was the risk they took.

But ever since the Great Depression wiped out a big percentage of the world's banks, vaporizing the bank depositors' savings in the process, banking system regulators have tried to do everything they can to protect bank depositors.

And they are smart to do so.

Because the moment depositors think that there is risk to their savings, they rush to banks to yank their money out.

That's called a run on the bank.

And since no bank anywhere has enough cash on hand to pay off all its depositors at once, runs on the bank cause banks to go bust.

That's what happened to hundreds of banks in the Great Depression.

And it's what happened to Bear Stearns, Lehman Brothers, and other huge banks during the financial crisis (though, with Bear and Lehman, the folks who yanked their money out weren't mom and pop depositors but other big financial institutions). It's what threatened to bring the entire U.S. financial system to its knees. And it's why the U.S. and European governments have been frantically bailing out banks ever since.

But now, thanks to Eurozone's bizarre decision in Cyprus, the illusion that depositors don't need to yank their money out of threatened banks because they'll be protected has been shattered.

Depositors in Cyprus banks will lose some of their deposits.

They will be furious about this.

And they will, rightly, feel that it is grossly unfair -- because depositors in the bailed-out banks in Ireland, Greece, etc. didn't lose their money.

And they will feel like fools for not having taken their money out.

And ... here's the important part ...

Other depositors at weak banks all over Europe, in places like Spain, Italy, and Greece, will rightly wonder whether this is the beginning of a new era of bank bailouts, an era in which bank depositors are going lose some of their money.

What do you think those other depositors in Spain, Italy, Greece, etc., are going to feel like doing when they realize that, if their banks ever need a bailout, they might have their deposits seized?

That's right.

They're going to feel like yanking their money out of their banks.

And if some of them yank their money out of their banks, well -- then the financial condition of those banks will go from weak to insolvent.

And the banks will go rushing to their governments and the Eurozone for help.

And if, god forbid, the Eurozone decides to seize the deposits of more bank depositors ...

Well, then, a good portion of Europe is going to suddenly experience a good old-fashioned bank run.

That, to put it mildly, could be a disaster.

It could bring the European financial crisis, which has lurched from one flare-up to another for most of the past five years, to a rather sudden head.

How much would it cost for the powers-that-be to bail out all of Europe's weak banks at once?

A lot.

More than the Eurozone has in its emergency lending facilities, certainly. And more than the International Monetary Fund has on hand.

So the U.S. would probably have to get involved.

And, regardless of whether the U.S. needed to get involved, the European economy would likely suffer the equivalent of a heart attack.

That wouldn't be good for the U.S. economy.

Or the Chinese economy.

Or any other economy that sells things to Europe.

So, you can see, this little decision to seize a little money from bank depositors in the little island of Cyprus could be a much bigger deal than you think.

It could conceivably precipitate a run on weak European banks.

And a run on weak European banks could hammer the European economy and then the economy of Europe's trading partners. And it could cause global markets to crash.

So keep an eye on what's going on over there in Cyprus.

It's potentially much more important than it seems.

***

The Telegraph

Darling: Cyprus savings raid could trigger bank runs across Europe

Bank runs and financial panic could spread across Europe after Cyprus proposed raiding people's savings for a new bail-out, Alistair Darling has said.

Branches of Cypriot banks remain closed in Athens amid EU bailout talks that have sparked enormous public anger and have led to cash withdrawals Photo: EPA/ORESTIS PANAGIOTOU

By Rowena Mason, Political Correspondent

19 Mar 2013

The former Chancellor said Cyprus is doing "everything you should not do" after the tiny country decided to seize around 6.75 per cent from smaller deposits and almost 10 per cent from larger ones.

The country is currently deciding whether to make richer savers pay a bigger proportion of the bill but Mr Darling said the whole idea of taking money from ordinary savers is dangerous.

He said EU should not be letting Cyprus "blow apart" the principle of protecting deposits under €100,000, as people will start pulling their cash out of banks if they fear this elsewhere.

"It seems to me to make it more likely that if you're a saver in Spain or Italy, if you have a sniff of the EU or the IMF coming your way you'll take your money out and you'll get a run on the bank," he told BBC Radio Four's Today programme.

"So what they're doing is everything you should not do when you're trying to solve a problem like this."

He said savers in other financially unstable countries, such as Italy and Greece, would not start withdrawing money immediately but a run could be triggered more easily.

"I'm not suggesting that tomorrow morning everybody in Southern Europe is going to take their money out of their banks," he said. "We saw with Northern Rock, everything can be fine on day, and even though I said the Government was standing behind people's money, we saw queues grow and grow and grow because people thought they were doing the right thing getting their money out." Once that has happened, Mr Darling said, it would be "incredibly difficult to haul it back".

He also criticised the EU for failing to bail out Cyprus in accordance with the principles of its banking union. He said its failure do so shows the whole concept starting to "unravel".

Financial experts have warned the proposal to raid people's savings to fund a bail-out for Cyprus sets a "worrying precedent" that could jeopardise the European economic recovery.

The island's government is currently considering whether to amend the plan after a shocked reaction from the international community, including its major lender Russia.

All banks in Cyprus were closed yesterday for a public holiday, but the government in Nicosia ordered them to remain shut until Thursday, amid fears of a potentially crippling run on the banks to withdraw savings.

Cash machines have been switched off and money transfers blocked since Sunday after many account holders took out all they could.

A vote in the Cypriot parliament to ratify the plan has been postponed for a second time after it became clear that the government would struggle to force it through.

***

MailOnline

How even the Kremlin and Iran scorn Britain for shackling a free Press

By DAILY MAIL REPORTER

PUBLISHED: 20 March 2013

- The New York Times delivered a damning verdict demolishing David Cameron's claims that the new system would be free of Government interference

From Iran to Zimbabwe and New York to Sydney, the world's media has reacted with astonishment to the assault on a free Press in Britain.

As plans to shackle newspapers with state regulation were unveiled, the French declared it a 'sad day', the Canadians said it was 'a mess' and the Australians branded it 'scary'.

Even the Russians are aghast, with Britain's humiliation complete as newspapers in Moscow and authoritarian regimes such as Ukraine accused the UK of censorship.

Meanwhile, the Germans mocked us as the country that invented Press freedom only to throw it away.

The most significant criticism of the new Press regulator -- cooked up in a late-night deal by politicians and anti-Press campaigners -- came from the U.S., where freedom of expression is enshrined in the constitution.

The globally-respected New York Times delivered a damning verdict demolishing David Cameron's claims that the new system would be free of Government interference.

It said the Prime Minister's claims were 'without substance' and condemned the new plans as having a chilling effect on free speech.

In Britain, the backlash was growing as the New Statesman followed The Spectator and Private Eye magazines by defying the new proposals. The New

The deal to establish a Royal Charter for new rules governing Press freedom were agreed by the three party leaders and the Hacked Off campaign group at 2am on Monday.

UNITED STATES

In a powerful editorial, the New York Times warned the 'unwieldy regulations' would 'chill free speech and threaten the survival of small publishers and internet sites'.

It wrote: 'Prime Minister David Cameron has argued that the plan will keep the Press free because it will be enacted through a Royal Charter, which is technically not a law because it is formally issued by the Queen, not Parliament. But that is a distinction largely without substance.

Reaction: In a powerful editorial, the New York Times warned the 'unwieldy regulations' would 'chill free speech and threaten the survival of small publishers and internet sites'

'In reality the proposal would effectively create a system of government regulation of Britain's vibrant free Press, something that has not happened since 1695, when licensing of newspapers was abolished.

'The kind of Press regulations proposed by British politicians would do more harm than good because an unfettered Press is essential to democracy. It is worth keeping in mind that journalists at newspapers like The Guardian and The Times, not the police, first brought to light the scope and extent of hacking by British tabloids.

'It would be perverse if regulations enacted in response to this scandal ended up stifling the kind of hard-hitting investigative journalism that brought it to light in the first place.'

It said misdeeds such as phone hacking were 'far better handled as violations of existing British laws, which already provide ways to prosecute and sue reporters for defamation or hacking.'

Elsewhere, Matt Storin, a former editor of the Boston Globe, the Chicago Sun-Times and a managing editor of the New York Daily News, wrote in his blog: 'I believe I can speak for virtually all American journalists in saying the new British Press regulations are not only appalling but also, in an American context, unimaginable.' 

RUSSIA

The Kremlin's newspaper of record, Rossiyskaya Gazeta, which is controlled by Vladimir Putin's government, said these were 'rainy days for the freedom of the Press'

The Kremlin's newspaper of record, Rossiyskaya Gazeta, which is controlled by Vladimir Putin's government, published a picture of David Cameron reading a newspaper on a Tube train with the headline: 'Censorship, Sir!' and said these were 'rainy days for the freedom of the Press'.

Another Moscow publication, Expert, under a report titled 'Ministry of Truth', warned in Orwellian terms that: 'It is most likely that London is about to be stripped of one of the main attributes of democracy.'

The Kurs news agency said Britain was 'introducing censorship on its media market', while popular daily Moskovski Komsomolets quoted Churchill's warning: 'A free Press is the most dangerous foe of tyranny.'

Prominent Russian journalist Yulia Latynina warned Britain was sending an appalling example to dictatorial leaders around the world. She said: 'As soon as this controlling body is formed, I have no doubt that Putin will say: "Everyone, follow Britain! Well done to them."'

Referring to the prime suspect in the London poisoning of dissident Alexander Litvinenko, she added: 'We will probably see Andrey Lugovoy claiming millions in compensation over his coverage in UK newspapers -- he will probably be the first client of your new regulator.'

ZIMBABWE

Dictators such as Robert Mugabe will be encouraged by Britain's proposed rules, a newspaper chief warned

Dictators such as Robert Mugabe will be encouraged by Britain's proposed rules, a newspaper chief warned. Takura Zhangazha, of the Voluntary Media Council, said: 'Statutory regulation of the Press is inimical to freedom of expression because we have had statutory regulation here and it has led to the newspapers being shut down, journalists being arrested and a culture of impunity for the state against the media.'

UKRAINE

The Delo newspaper declared simply: 'Great Britain is getting ready to launch censorship.'

BAHRAIN

The Gulf Daily News in Bahrain, where pro-democracy protesters were brutally suppressed during the Arab uprising, said there was no need for Britain to adopt such Press controls.

It pointed out: 'Neither British politicians nor anyone else is going to solve [the problems] by creating some sort of bureaucratic watchdog that will regulate what journalists do. We already have in place the best regulatory force of any organisation on the planet. They are called the readers.'

SOUTH AFRICA

Nic Dawes, editor-in-chief of South Africa's Mail and Guardian, said: 'The UK is not only a leading democracy, it is the birthplace of the free Press'

Nic Dawes, editor-in-chief of South Africa's Mail and Guardian, said: 'The UK is not only a leading democracy, it is the birthplace of the free Press. If it chooses a statutory regulatory regime, in word or in deed, it will set a dangerous and very high-profile example.

'Those who seek to secure and extend their power, whether in public office or private, will see in Britain's choice a very convenient precedent. Please do not give it to them.'

IRAN

State-owned broadcaster IRIB's HispanTV channel announced: 'Freedom of the Press under threat in the United Kingdom,' and said: 'The British Government's new measure to regulate the Press puts in danger freedom of expression and democracy in the European country.'

CANADA 

The Toronto Star branded the new regulations 'a mess', saying: 'Phone-hacking victims, who, astonishingly, helped devise the watchdog -- it's as if crime victims had helped judges establish sentencing guidelines -- denied journalists would be unfairly constrained. Tabloid journalism was a mess, largely thanks to Rupert Murdoch. But so is this regulatory solution.'

AUSTRALIA 

National newspaper The Australian wrote: 'In Britain, as a result of a deal stitched up behind closed doors, we now have a scary system of state oversight of journalism. A Royal Charter will create a Press regulator with the power to maul unruly hacks and editors.'

GERMANY 

The respected Die Welt newspaper said it was a 'black day' for the British Press.

The Frankfurter Rundschau, mocked Britain in an article headlined: 'Churchill's Legacy.' It said: 'Great Britain was the first country to introduce freedom of the Press. This hard-fought-for gain is now to be risked through new, legally anchored Press controls.

'It is a Press law, though it may not be called one.'

FRANCE 

Le Monde -- the most famous paper in France -- suggested the regulator will have 'little respect for basic liberties'.

Le Figaro said David Cameron was guilty of a 'very risky gamble', while the newspaper l'Express said it was 'a sad event in the history of freedom of the Press in the UK'.

SPAIN 

El Pais described the new Press regulations as a 'dangerous experiment' with 'unforeseeable consequences'.

It, too, highlighted the irony of Britain dispensing with a freedom it created, saying: 'Putting a stop to a certain kind of Press would not be bad, but the worst thing would be if this resulted in the erosion of Press liberty achieved 300 years ago in one of the oldest democracies in the world.'

***

Chris Spivey The World Put Right

The fiendishly complex new system, by James Slack

The MPs have produced a Press regulatory regime of fiendish complexity, with layer upon layer of bureaucracy.

The process begins with the political parties themselves who, by devising the terms of yesterday's Royal Charter, have interfered in the workings of the free Press for the first time in 300 years.

As we show in the flowchart, the first step to be taken under the Charter they have produced will be the establishment of a Recognition Appointments Panel (shaded red, on the bottom right-hand side).

Handpicked by ex-Whitehall mandarin   Sir David Normington, the current Commissioner for Public Appointments, none of  the four members can ever have been a newspaper editor.

In turn, as the arrow on the diagram shows, this panel will then appoint a Recognition Panel. This will contain up to eight members, none of whom, the politicians have decided, can be an editor, publisher or a member of the Commons or Lords.

Crucially, it will have sweeping powers to oversee the new independent Press regulator. The Recognition Panel will carry out regular checks on the regulator and will pass judgment on whether or not it is working. A negative verdict could take Westminster back to the drawing board.

This brings us to the regulator itself - which, as we show in the boxes coloured blue, is being established under a separate, hugely complicated process.

The first move in setting this up will be the establishment of a six-strong Foundation Group (bottom left) appointed by the newspaper industry and headed by ex-President of the Supreme Court Lord Phillips.

The group's job is solely to set up a Regulatory Appointments Panel, which will contain five members - an independent chairman, two other independent members, an editor and one other industry member.

This Panel's job is two-fold. First, it must pick the 12 members of the Main Board (coloured purple) of the new Press regulator, which will be independently chaired with six other independent members. The five industry members on the Board - a minority - cannot include serving editors.

The Panel will also establish the Complaints Committee, an off-shoot of the regulator containing the Main Board's chairman, six independent members and five industry figures, none of whom can be a serving editor.

The Complaints Committee will decide if the new Code on journalistic conduct  and ethics has been breached in individual cases - which could lead to the Main Board ordering the publication of prominent apologies and corrections.

Drawing up this new Code will require the establishment of yet another panel - the Code Committee - featuring five independent members, five journalists and five editors.  It will be appointed by the Main Board, raising concerns that it will be acting as judge and jury on rules it has itself written. To this galaxy of committees will then be added two other new bodies, which are offshoots of the new regulator's main board.

The first, the Standards and Compliance Arm, will have the power to investigate potentially systemic problems at a newspaper, such as phone hacking, and impose huge fines.

Meanwhile, the Arbitral Arm will set up a panel to adjudicate on civil complaints against newspapers, without the need to go to court. If a member of the public wins a case, the newspaper involved must pick up their costs.

But, if the person loses, newspapers will not be able to recover their own legal fees - potentially leaving regional newspapers, in particular, with crippling bills. There are also concerns about the system being swamped by compensation-seekers.

To get this Byzantine system of regulation off the ground will require countless meetings involving dozens of panel members and independent experts. The danger is that it will collapse under its own complexity.

The MPs have produced a Press regulatory regime of fiendish complexity, with layer upon layer of bureaucracy.

The process begins with the political parties themselves who, by devising the terms of yesterday's Royal Charter, have interfered in the workings of the free Press for the first time in 300 years.

As we show in the flowchart, the first step to be taken under the Charter they have produced will be the establishment of a Recognition Appointments Panel (shaded red, on the bottom right-hand side).

Handpicked by ex-Whitehall mandarin   Sir David Normington, the current Commissioner for Public Appointments, none of  the four members can ever have been a newspaper editor.

In turn, as the arrow on the diagram shows, this panel will then appoint a Recognition Panel. This will contain up to eight members, none of whom, the politicians have decided, can be an editor, publisher or a member of the Commons or Lords.

Crucially, it will have sweeping powers to oversee the new independent Press regulator. The Recognition Panel will carry out regular checks on the regulator and will pass judgment on whether or not it is working. A negative verdict could take Westminster back to the drawing board.

This brings us to the regulator itself - which, as we show in the boxes coloured blue, is being established under a separate, hugely complicated process.

The first move in setting this up will be the establishment of a six-strong Foundation Group (bottom left) appointed by the newspaper industry and headed by ex-President of the Supreme Court Lord Phillips.

The group's job is solely to set up a Regulatory Appointments Panel, which will contain five members - an independent chairman, two other independent members, an editor and one other industry member.

This Panel's job is two-fold. First, it must pick the 12 members of the Main Board (coloured purple) of the new Press regulator, which will be independently chaired with six other independent members. The five industry members on the Board - a minority - cannot include serving editors.

The Panel will also establish the Complaints Committee, an off-shoot of the regulator containing the Main Board's chairman, six independent members and five industry figures, none of whom can be a serving editor.

The Complaints Committee will decide if the new Code on journalistic conduct  and ethics has been breached in individual cases - which could lead to the Main Board ordering the publication of prominent apologies and corrections.

Drawing up this new Code will require the establishment of yet another panel - the Code Committee - featuring five independent members, five journalists and five editors.  It will be appointed by the Main Board, raising concerns that it will be acting as judge and jury on rules it has itself written. To this galaxy of committees will then be added two other new bodies, which are offshoots of the new regulator's main board.

The first, the Standards and Compliance Arm, will have the power to investigate potentially systemic problems at a newspaper, such as phone hacking, and impose huge fines.

Meanwhile, the Arbitral Arm will set up a panel to adjudicate on civil complaints against newspapers, without the need to go to court. If a member of the public wins a case, the newspaper involved must pick up their costs.

But, if the person loses, newspapers will not be able to recover their own legal fees - potentially leaving regional newspapers, in particular, with crippling bills. There are also concerns about the system being swamped by compensation-seekers.

To get this Byzantine system of regulation off the ground will require countless meetings involving dozens of panel members and independent experts. The danger is that it will collapse under its own complexity.

***

Until next week,...keep on believing.

Almondtree Productions

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