Cyprus Officially Passes Capital Controls Into Law + Banksters on Drugs + Cyprus Deposit Levy Vote Delayed, Will Go "Down To The Wire" As Up To 70% Deposit Tax Contemplated For Some

Submitted by Tyler Durden: While it is unknown if the Cypriot parliament will agree to, and enact into law, the Troika-demanded deposit haircuts, after the shocking vote of mutiny against Merkel earlier this week that saw not one politician vote for the Europe suggested deposit tax levy (and even the ruling party abstained), a vote which will once more take place tomorrow, moments ago Cyprus became the first Eurozone country to officially implement governmental capital controls into legislation. At this point it had no choice: whatever happens with the deposit haircut, or with everything else, it is now inevitable that the local Cypriots will do all they can to pull as much money from domestic banking system as possible following the complete loss of faith and trust in banks, which is why the government had no choice but to intervene with its own "controls." Sadly, this marks a milestone in the development of the Eurozone - it's all downhill, and accelerating, from here.

There are various other proposals which are currently being voted on, all of which are secondary to the Capital Controls one (the restructuring of the broke banks is perhaps the next most important one), until tomorrow's vote on deposit haircuts. 

Above is a photo from today's historic session in Cypriot parliament, in which the first every capital controls in Eurozone history were voluntarily legislated.  

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Cyprus Deposit Levy Vote Delayed, Will Go "Down To The Wire" As Up To 70% Deposit Tax Contemplated For Some
Submitted by Tyler Durden: While GETCO's algos were poised to set off a buying tsunami yesterday the millisecond a flashing red headline hit Bloomberg with even the hint or suggestion that Cyprus is fixed, we said to sit back and relax because Cyprus "will get no resolution today, or tomorrow, and may at best be resolved on Sunday night following yet another coordinated global bailout, (although our money is on a last, last minute resolution some time on Monday when Cyprus is closed but the European markets are widely open)."
As it turns out, we were right, following reports by major newswires that the vote on the deposit levy will only take place (if at all) on Sunday night, after the Eurozone finance ministers' meeting on Sunday.
As it also turns out, and as noted previously, the votes taken yesterday were the easy ones - obviously Cyprus will now need capital controls in perpetuity to slow down the terminal unwind of its banking system which is now, for all intents and purposes, over and will only exist, if at all, entirely though ECB liquidity injections, but the difficult decision - to complete U-Turn on the Tuesday vote just saying no to deposit tax levy - has been delayed.
The reason for the delay? Deciding how to best bring the news to Russian, and other wealthy depositors, that not only will they not have access to their funds for a long, long time, the ultimate haircut on what they thought was safe, easily accessible cash as recently as a week ago, may be a stunning 70%!
From Xinhua:

The Cypriot parliament has postponed a debate on legislation imposing a levy on bank deposits until after a Eurogroup meeting in Brussels on Sunday, parliament sources said on Saturday.

The vote on the bill had been scheduled for Saturday, ahead of a finance ministers meeting to consider a revised bailout for Cyprus, following endorsement of nine bailout related bills at a day-long session of parliament on Friday.

The sources could not say if and when a deposits levy bill will be debated.

Troika technocrats representing the European Commission, the European Central Bank and the International Monetary Fund were at the ministry of finance early on Saturday discussing final details of the bailout.

Cyprus president Nicos Anastasiades was scheduled to fly to Brussels later on Saturday accompanied by leaders of parliamentary parties to plead his position on the bailout but plans may change depending on the outcome of discussions at the ministry of finance.

However his travel to Brussels has been throwing into uncertainty following the postponement of Saturday’s session of parliament.

Reuters has more:

Cyprus's bid to avert financial collapse will go down to the wire after the island said it would hold a crucial sitting of parliament only after finance ministers of the 17-nation euro zone meet on Sunday.

Cyprus faces a Monday deadline to clinch a 10 billion euro ($13 billion) bailout from the European Union or the European Central Bank says it will cut off emergency funding to the country's stricken banks, spelling certain collapse and potentially pushing the island out of Europe's single currency.

The way the deal is currently structured, all deposits that have EUR 100,000 and less in deposits, which in Cyprus amounts to 361,000 of a total 371,000, will not see a deposit tax, after last week's attempt to impose a 6.75% on all "insured" accounts. However, the same can not be said for the remaining 10,000 belonging supposedly to uber-wealthy Russians, but certainly to people from all over the world, and even Cyprus.
As a result, according to the rapidly shifting plan, depositors with the biggest local bank, Bank of Cyprus, may see losses up to 25%. Per Reuters:

Cyprus is considering a levy of about 25 percent on bank deposits over 100,000 euros ($130,000) in the island's largest local lender, Bank of Cyprus, Finance Minister Michael Sarris said on Saturday

Sarris told reporters that "significant progress" had been made in talks with officials from the European Union, European Central Bank and International Monetary Fund - the so-called 'troika' - and that the discussions may conclude on Saturday evening.

Cyprus' second largest bank, Cyprus Popular Bank, aka Laiki bank, where it appears the bulk of Russian cash is stored, will fare far, far worse with deposit haircuts up to a stunning 70% on the table, and that is after capital controls ease enough to allow for the deposit withdrawals!

Cyprus Popular Bank depositors with more than 100,000 euros will face losses, said Averof Neofytou, deputy president of Anastasiades’s ruling Disy party.

“They will wait for many years before they see what percentage they will get back from their savings -- 30 percent, 40 percent, 50 percent, 60 percent, it will be seen,” Neofytou said during the debate in parliament.

He didn’t say what could happen to larger depositors of other banks.

Nothing good, that's for sure.
But at least the bulk of the population will be spared. The problem is what Russia will do, when the ball is in its court following a vote to impair its citizens which may or may not come, as all political leaders in Russia have made it very clear this is an outright political provocation by Europe targeting purely Russian wealth.
What is also sure, is that any bulk investments in Europe, be they held by Russian, Chinese, or any other oligarchs, will now scramble to get out, knowing quite well their cash is not only no longer welcome in the Eurozone, but most likely will be used to fund bailouts of assorted insolvent European nations. Such as all of them.  This could be a very big problem because according to JPMorgan, the share of large or uninsured deposits is about half of total deposits in Euroarea banking system including the peripheral countries.
Should a stealthy "uninsured" depositor run in Europe take place following this weekend, and up to half the funding of European banks go poof - that which until recently was generously provided by the same uberwealthy who are now the target of persecution seemingly everywhere - not all the ELA, LTRO, SMP, OMT, and any other acronym free ECB money in the world will be able to hold the Eurozone together.
In the meantime, those hoping for a Saturday resolution to the Cypriot expropriation of Russian wealth are urged to step back from the computer and go for a walk - it will take a while, and will likely be after the imminent onslaught of fire and brimstone from Russia which now does everything it can - including outright threats at this point - to make it clear that should Europe indeed go ahead and impair its wealthiest depositors by up to 70%, that the European winter 2013/2014 season, will be very long, and very cold.
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Time To Bradley-Manning The Banksters!

Max and Stacy

Bankster Gang Bang
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Cyprus Introduces Capital Controls'