Occupy Underground

This is rough sequence of events all in billions.

Cyprus knew it needed c. €17.5 to keep its banks afloat actually by tomorrow when the ECB liquidity program was due to end.
All of their banks are weighed down with losses from Greek bonds which were given and a haircut and internal delinquent debt from loans to their own construction industry.

They'd been weighed up as being good for €10 in terms of sustainable debt and they'd already got €2.5 from Russia.

They need the balance of €5 vey quickly. The only plausible if unpopular way of achieving that was to tax deposits in bank accounts. I think the EU first proposed the %'s to apply which were then revised by Cyprus before their own vote which blanked.

Its currently a stalemate. Most of the $10 would come from German tax payers and the Bundesbank won't allow that to increase.

Looking likely now that Russia may sort the problem if secured against Cyprus's offshore gas deposits. Any loans would be secures against state assets anyway. Russia also need a navel base there.

Today's up dates here http://www.guardian.co.uk/world/2013/mar/20/cyprus-crisis-minister-russia-deal and general link here with subsections http://www.guardian.co.uk/world/cyprus