The Cypriot parliament has voted against the controversial bank bailout deal hatched with the EU over the weekend, reports Bloomberg.
36 voted no.
19 abstained from voting.
No one voted in favor of it.
The vote was held in a show of hands.
The big part of the bailout plan that has everyone up in arms: a controversial decision to apply haircuts to depositors, which essentially amounts to an expropriation of a certain percentage of money from everyone's bank account.
That includes insured depositors – those with up to 100,000 euros in the bank – whose funds, up to now, were widely considered sacrosanct.
Before the vote, Cypriot President Nicos Anastasiades told German Chancellor Angela Merkel in a phone call that he didn't have the political support to pass the deal through parliament, as several parties had already pledged to vote "no."
There is a lot riding on the Cypriot parliament's ability to get this bailout deal passed, including potential market volatility, but the euro has already been getting crushed today on various headlines indicating the vote looked unlikely to pass.
In a note to clients, JPMorgan economist Alex White explained why the three options facing
Meanwhile, reports indicate that plane tickets from Moscow to Cyprus are sold out. This could indicate that Russians using the Cypriot banking system as an offshore tax haven are scrambling to get their cash. We have already seen lines at ATMs this week in Cyprus as local depositors try to pull whatever they can out of their accounts.
In short, things are a mess in Cyprus. Reports earlier that Cypriot Finance Minister Michael Sarris, who landed in Moscow this morning to meet with Russian officials, had offered his resignation, had everyone confused.
Those reports were later denied by Sarris himself. However, there were also reports that President Anastasiades refused his resignation. So, there has been a lot out of Cyprus for markets to digest today.
Anastasiades has only been in office for three weeks, by the way.
All of this makes us wonder – is this the worst start to a presidency ever?