Monthly Archives: April 2013

One month has passed since the bank crises in Cyprus and the country is still in a stage of uncertainly. A month ago on a meeting of the Ministers of Finance in the European Zone was taken a decision that the deposits in Cyprus have to be taken a tax on and thus one of the two sectors of the local economy that were productive were destroyed. After every political decision taken on the finances, the people are the one to suffer and in this case these are the people of Cyprus. Many businesses have closed down, a lot of people are unemployed and there is no official information about the direction in which the country will go.

People are afraid of the future and try to save as much as possible, so that they can survive through the crises. They are not buying anything more than the minimum everyday necessities and of course, this immediately affects the economy. Locals have a lot of mortgages and are not certain whether they will be able to make the payments. Many people do not know what to expect from their retirement funds and are not certain if they will have peaceful living when retired or not. In general, there is a feeling of despair and uncertainty in Cyprus now which will not go away soon.

This Sunday the Bank of Cyprus, which is the lender of the country, implemented a conversion of the unused cash deposits available in the bank into equity. This was one of the conditions asked for by the international lenders, in order to provide the financial aid to the island. According to Reuters, the process that is known as bail-in makes those people who have deposits be the one that will pay for the recapitalization of the bank. Bank of Cyprus was seriously hit by massive losses, being the largest bank in the country. It was announced that the bank has converted 37.5 percent of the deposits that are exceeding 100 000 Euros in high shares, while additional 22.5 percent of the deposits are still held and might be converted into shares in the future. Other 30 percent of the deposits beyond 100 000 Euros will be frozen and used later if needed. No information was given on the actual cash these percentages stay for. Most probably this information will be given in the mid of the summer.

The process known as bail-in also includes dissolution of the Popular Bank, which is the second largest lender in Cyprus. This is another effort that the country makes in order to collect the 13 billion euros that it needs and to recover its economy. The country is expected to get another ten billion by the International Monetary Fund and the European Union. The parliament of Cyprus will vote on the bailout tomorrow, on 30th April, while the first part of the help from the European Union and from the International Monetary Fund will be received in May.

There are two main factors that are very important in order Bulgaria to be accepted in the border free travel zone of Schengen. The first essential thing for the country is to preserve its stable development and to make sure that its infrastructure will get even better. The second important thing concerns the prevention of illegal migration. This information was provided in the beginning of April by Monika Hohlmeier, who is a member of the party group of the European People and of the Committees on budgets and on organized crime, corruption and money laundering of the European Parliament. In general, Bulgaria has to convince the other member states of the Schengen passport free zone that it has taken all the measures necessary.

Actually, it will be fair to say that the Schengen zone has problems that concern the illegal immigration with one of its member states – Greece. The country does not fight effectively with the illegal migration and now has to put a lot of efforts and funds in solving that issue. Because of that bad experience, the Schengen zone is more careful with accepting new members now. Today, it wants to act more carefully and avoid the accession of new countries before it is sure that they have solved their problems with the organized crime, corruption and illegal migration.

According to the former prime minister of Bulgaria, Mr. Boyko Borisov, the country failed to enter the Schengen zone because of the political crises it was in. During a meeting of the Council of Ministers he stated that Bulgaria could have entered the Schengen zone by air on March 14th as only the Netherlands were against that. The political turmoil in the country however set an alarm to all the member states of the Schengen passport free zone. It became clear that the debate on the acceptance of Bulgaria and Romania in this border free area was postponed for the end of 2013. Certain diplomatic sources stated however that the two countries will not be accepted before the spring of 2014, even if they have very positive results in the reports that will be issued in the end of the year.

Bulgaria and Romania have to show better and more convincing results on their fight against the organized crime and the corruption. Mr. Boyko Borisov in his capacity of Prime Minister and his government resigned from power at the end of February and are preparing for early elections on May 12th.

Support and solidarity is being showed to Bulgaria and Romania by a group of young people. The two countries’ bids for admission in the travel passport free Schengen zone were postponed for an indefinite time in the beginning of March. The young people formed a group, the aim of which is to ensure that the two countries enter the zone soon, since they are ready for that step. Currently, the initiative Stepping into Schengen is focused on getting attention to the real factors and reasons behind the denial and on the rights that the membership in the zone gives. According to the leaders of the project, the Schengen zone is very important and affects many people, but the decisions taken by its members are not transparent. They further think that the postponement is based on certain political issues and criteria that Bulgaria and Romania are believed not meeting. Accused of having issues with corruption and security, the two countries have actually invested a lot in meeting the technical requirements and in securing their borders.

The Stepping into Schengen initiative has another key role as well and this is to make sure that the decision taken by the member states of Schengen from now on are transparent and not based on political or other motives. Currently, the people from the initiative are focusing on informing people about Schengen zone in general. The initiative is addressing all people that stand for equality, transparency and tolerance.