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FP Passport Morning Brief
Monday, March 18, 2013
Cyprus bailout sparks new round of economic turmoil in Europe
------------------------------------------------------------------------------

*Top news: *With the decision to require Cypriot depositors to pay for a
bailout of the country's ailing banking sector, European regulators may have
set off [1] a new phase in the eurozone crisis as outrage mounted over the
weekend against the plan and some analysts warned that a run on Cyprus' banks
may spread to Italy and Spain.

In Cyprus, political support for the 1 billion euro bailout package is now
crumbling. The Cypriot parliament has delayed a key vote to approve the
measure after people flocked to ATMs over the weekend to remove cash from
their accounts before the tax was implemented. Under the terms of the current
deal, accounts with under 100,000 euros would be taxed at a rate of 6.75
percent and accounts over 100,000 at a rate of 9.9 percent. Cyprus'
president, Nicos Anastasiades, tried to to sell his country on the deal,
which was largely forced on him by European financial mandarins, in an
address to the nation, arguing that without the deal the country's financial
system would completely collapse, the economy would be crippled, and the
country would likely exit the eurozone.

Under previous bailouts, bond holders have been forced to take losses on
their holdings in order to finance loan packages, but individual depositors
have so far been exempt from having their savings raided to bail out banks.
The reversal of that policy has led to fears that depositors in Spain and
Italy may move quickly to remove their savings from banks, a move that would
devastate those countries' financial systems. The new policy is the result of
two main factors: Germany's unwillingness to finance further bailouts out of
its own pocket and the presence in the Cypriot banking system of large
deposits held by Russians, who have taken advantage of the country's lax
banking rules to park their money there. Russian President Vladimir Putin
slammed the measure, calling [2] it " "unfair, unprofessional and dangerous."

Anastasiades is now attempting [3] to renogotiate the terms fo the deal to
shift the rate at which deposits would be taxed to more heavily affect larger
deposits, a move that would place the burden more heavily on the large
foreign deposits which currently reside in Cypriot banks.

*China: *Speaking on the final day of the People's National Congress, China's
new prime minister, Li Keqiang, presented [4] a reformist vision for his
country's future, arguing that growth must occur within the parameters of
environmental protection.


------------------------------------------------------------------------------
Middle East

* With the amount of territory under its control steadily growing, the
Syrian opposition is attempting [5] to form an interim government capable
of dispensing basic services.
* Israel released [6] Ayman Sharawneh, a Palestinian man who has been on a
hunger strike for several months, in a deal that will require him to be
confined to Gaza for the next 10 years.
* Days ahead of the 10th anniversary of the U.S. invasion of Iraq, a car
bomb struck [7] just north of the southern city of Basra, killing at least
10 and wounding several others.

Asia

* Afghan opposition politicians have opened [8]negotiations with the Taliban
ahead of next year's election, which will determine the sucessor to Hamid
Karzai.
* Five men were arrested [9] in connection with the gang rape of a
39-year-old Swiss woman travelling by bicycle through central India
together with her husband.
* When the clock hit midnight on Saturday, Pakistan's government became [10]
the first in the country's history to serve out its full term, a crucial
milestone for a democracy with a history of coups and instability.

Europe

* A top Russian diplomat said that the United States' decision to move parts
of its missile defense system out of Europe did not address [11] Russia's
concerns on the issue.
* Britain's three main political partise reached [12] an agreement over how
to regulate the British press, an initiative put forward after revelations
of wide-spread phone hacking.
* The Italian parliament elected [13] speakers in both its houses, but it is
likely Italians will have to return to the polls in order for a government
to be put in place.

Africa

* One day after a referendum on the country's new constitution, Zimbabwean
security forces arrested [14] three prominent opposition politicians and a
renowned human rights lawyer.
* Prime Minister Raila Odinga filed [15] a brief with Kenya's supreme court
to overturn the decision that handed a narrow victory to Uhuru Kenyatta in
the recent presidential elections.
* A massive car bomb struck [16] the center of Somalia's capital, Mogadishu,
killing at least 8 with casualties expected to rise.

Americas

* Lima's first elected female mayor, who has launched an effort to tackle
corruption in the city, will likely survive [17] a recall vote, according
to exit polls.
* Venezuelan opposition politician Henrique Capriles launched [18] a
nation-wide tour as part of his effort to unseat Hugo Chavez's chosen
successor, Nicolas Maduro.
* A fireworks explosion in rural Mexico during a religious procession killed
[19] at least 17 people.

/-By Elias Groll /

HASAN MROUE/AFP/Getty Images

The Latest from *FP*
* Lost in the Desert - By James Traub [20]
* Preserve the Reserves - By Christopher Holshek [21]
* Iraq Roundtable Participants [22]
* Ends and Means - An FP Roundtable [23]
* Mali’s Bad Trip - By Andrew Lebovich [24]

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[1] http://www.nytimes.com/2013/03/18/business/global/facing-bailout-tax-cypriots-rush-to-get-their-money-out-of-banks.html?nl=todaysheadlines&emc=edit_th_20130318&_r=0&pagewanted=all
[2] http://www.bbc.co.uk/news/world-europe-21825981
[3] http://news.yahoo.com/cyprus-president-trying-amend-bailout-plan-192404965--finance.html
[4] http://www.nytimes.com/2013/03/18/world/asia/li-keqiang-chinas-premier-offers-plan-of-economic-and-social-reforms.html?nl=todaysheadlines&emc=edit_th_20130318
[5] http://news.yahoo.com/syria-opposition-pushes-form-interim-government-095217830.html
[6] http://news.yahoo.com/palestinian-ends-hunger-strike-deal-223812089.html
[7] http://www.bbc.co.uk/news/world-middle-east-21821159
[8] http://news.yahoo.com/ap-exclusive-karzai-opponents-talk-taliban-091454925.html
[9] http://news.yahoo.com/indian-police-5-admit-raping-swiss-tourist-002719207.html
[10] http://www.bbc.co.uk/news/world-asia-21817492
[11] http://news.yahoo.com/russia-unmoved-us-missile-defense-plan-change-072129271.html
[12] http://news.yahoo.com/politicians-clinch-deal-regulate-scandal-hungry-press-090815863.html
[13] http://www.nytimes.com/2013/03/17/world/europe/italian-lawmakers-elect-speakers-but-stability-is-elusive.html?ref=europe
[14] http://www.nytimes.com/2013/03/18/world/africa/zimbabwe-authorities-arrest-opposition-officials.html?nl=todaysheadlines&emc=edit_th_20130318
[15] http://news.yahoo.com/tear-gas-kenya-prime-minister-files-suit-121514448.html
[16] http://www.bbc.co.uk/news/world-africa-21829370
[17] http://www.miamiherald.com/2013/03/17/3292101/exit-polls-limas-mayor-survives.html
[18] http://www.miamiherald.com/2013/03/16/3290165/presidential-candidates-spar-in.html
[19] http://www.miamiherald.com/2013/03/17/3292006/death-toll-in-mexico-fireworks.html
[20] http://www.foreignpolicy.com/articles/2013/03/15/lost_in_the_desert_obama_morsy_egypt
[21] http://www.foreignpolicy.com/articles/2013/03/15/preserve_the_reserves
[22] http://www.foreignpolicy.com/articles/2013/03/15/iraq_roundtable_participants
[23] http://www.foreignpolicy.com/articles/2013/03/15/ends_and_means
[24] http://www.foreignpolicy.com/articles/2013/03/15/mali_s_bad_trip
[25] http://www.foreignpolicy.com
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[27] http://www.foreignpolicy.com/articles/contact_us
[28] http://www.foreignpolicy.com/about_us
[29] http://www.foreignpolicy.com/articles/2013/03/15/lost_in_the_desert_obama_morsy_egypt
[30] http://www.foreignpolicy.com/articles/2013/03/15/The_execution_of_the_Saudi_Seven
[31] http://www.foreignpolicy.com/articles/2013/03/15/will_south_korea_go_nuclear
[32] http://www.foreignpolicy.com/articles/2013/03/15/social_warfare_budget_republicans
[33] http://www.foreignpolicy.com/national_security_newsletter_signup
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