OK

  Now that the details of the bail-out are becoming clear, it's time to look at the full effects of the now economically devastated country.

 For starters, let's look at the losers of the bail-out (and they are legion).

Big Depositors: Remember when the discussion was about whether they would lose 10% or not?

 Under conditions expected to be announced on Saturday, depositors in Bank of Cyprus will get shares in the bank worth 37.5 percent of their deposits over 100,000 euros, the source told Reuters, while the rest of their deposits may never be paid back.
 That's an almost certain loss of over 60%. Considering that the shares are in a bankrupt bank, the loss is actually closer to 100%.
  Ouch!

  But the losses were taken by Russian oligarchs (i.e. bad guys), right? Actually no.

 No one knows exactly how much money has left Cyprus' banks, or where it has gone. The two banks at the centre of the crisis - Cyprus Popular Bank, also known as Laiki, and Bank of Cyprus - have units in London which remained open throughout the week and placed no limits on withdrawals. Bank of Cyprus also owns 80 percent of Russia's Uniastrum Bank, which put no restrictions on withdrawals in Russia.
 So the losses are being almost totally put on locals. But those locals are the idle rich, right? After all, 100,000 Euros is a Hell of a lot of money. Well, it might not be that simple.
 I'm not Russian oligarch, but just European medium size IT business. Thousands of other companies around Cyprus have the same situation.
   The business is definitely ruined, all Cypriot workers to be fired.
 Because the "wealth tax" didn't distinguish how the money was being used, small businesses all over Cyprus have been ruined.

Cyprus economy: The total destruction of the Cyprus banking system alone will cause a 20% drop in the GDP of the country. And this is before you consider the effects of 1) the destruction of small businesses, 2) capital flight from Cyprus banks leaving the country short of cash, and 3) the full effects of the coming austerity.
   Even worse, the crash of the economy alongside the increased size of the public debt (120% after the bailout) means that another bailout is likely in the future.

The Euro

  The President of Cyprus told the media yesterday that Cyprus had no intention of leaving the Euro. The fact is that Cyprus, for all intents and purposes, has already left the Euro.

  Customers are limited to 300 euro withdrawals per day and are prohibited from cashing checks. People leaving Cyprus will be allowed to take no more than 1,000 euros with them.
 What these capital controls have done is created a "Cyprus Euro" - a sub-Euro that is only worth a percentage of what the German Euro is worth. The break-up of the Euro has started, and it was the Core nations of the Euro that insisted it happen.
   The capital controls which were only supposed to last for a week are now expected to stay in place for a month now. Expect future revisions.

  The botched bailout of Cyprus has caused concerns about who will be next.
Slovenia is tops on that list.

 "Slovenia is now inevitably heading to a bailout, the eurozone shot itself completely in the foot following the Cyprus issue," said Tim Ash, head of EM research ex-Africa at Standard Bank.
 Just like the Cyprus President assuring us that they aren't leaving the Euro, the Prime Minister of Slovenia assures us that they don't need a bailout.
   However, we shouldn't rule out Luxembourg and Malta from going the way of Cyprus before Slovenia.

  I would give a list of the winners, but they seem to only exist in Germany, and they might only be winners for a short while.
   When Dutch finance minister Jeroen Dijsselbloem referred to the Cyprus bailout as a "template" for future bailouts in Europe is sure to complicate things for European banks.

 The flight of capital from the periphery already seen because of fears of a eurozone break up will be further enhanced.
 Instead of saving the Euro, the botched Cyprus bailout may actually be a template for leaving the Euro.
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