http://www.cbc.ca/news/business/story/2013/03/18/cyprus-bank-deposits-crisis.html
Cyprus bank account tax puts Europe on edge
Officials fear bank run as citizens angered by levy in EU/IMF rescue package
Cyprus's government has postponed a crucial vote on whether to seize almost 10 per cent of the assets of ordinary bank account deposits, a sudden move that the country's president advanced to stave off bankruptcy and receive a bailout from the European Union.
On Friday, President Nicos Anastasiades proposed the surprising plan, which would see lawmakers impose a 6.75 per cent tax on all bank deposits for accounts with under €100,000 in assets. Accounts with more than €100,000 would see a 9.9 per cent tax.
"We're not aiming to gloss over the situation," he said in his first public statement after the EU-IMF meeting in Brussels agreed on the bailout early Saturday. "The solution taken may be painful, but it was the only one" worth taking, he said.
'Germany, France et al came in and said, "We want it, and we are taking it."'—Mark Grant of Southwest Securities
The move could raise as much as €6 billion, and is part of a €10 billion bailout package from the IMF and EU that's designed to get the country out of financial difficulties it fell into when Cypriot banks lost billions on bad investments in Greek banks.
Many parliamentarians, beholden to the voters who elected them, promised to vote against the move and keep bank accounts untouched. There was supposed to be a vote on the matter Monday, but due to the extreme circumstances, it has been postponed until at least Tuesday.
Details of how the levy would be implemented remain sketchy. For instance, it's unclear how joint bank accounts would be calculated.
Monday is a bank holiday in Cyprus. The timing of events was tailored to allow cooler heads to prevail, but predictably, Cypriots spent the weekend withdrawing funds at bank machines throughout the country.
Germany's Finance Minister Wolfgang Schaeuble called the levy part of the "fair" distribution of the bailout's burden. (Cathal McNaughton/Reuters)
The move marks the first time that the IMF and the 17 eurozone nations have dipped into people's savings to finance a bailout, a move that analysts worry may roil international markets and jeopardize Europe's fragile economy.
Germany's Finance Minister Wolfgang Schaeuble called the levy part of the "fair" distribution of the bailout's burden. "The Cypriot banking sector will be significantly reduced to a sustainable level and business model," he said.
Others weren't as diplomatic in their criticism of the bold plan.
"The European Union and the European Central Bank and the IMF have just advocated the confiscation of private property for their own indulgence," said Mark Grant, managing director of financial firm Southwest Securities Inc.
"Bank accounts are not bonds or stocks or some other form of investments. It is private property like your house or your car. Germany, France et al came in and said, 'We want it, and we are taking it, and it is necessary for our government'," Grant wrote in a commentary on the Cyrpus plan over the weekend.
Maybe I'm paranoid. Maybe I'm extreme. But the money in my chequing/savings account isn't earning any interest. So today I went to withdraw the money in my account as cash (approximately $60k) and the fucking bastards won't give me all my money until Thursday. They were able to give me $5k today, $5k tomorrow, $5k Wednesday, and the balance on Thursday.
I didn't expect to be able to get it all today, but I did expect to be able to get more than $5k today, which is a limitation that I found very alarming to me. This must be part of the capital controls that Harper had implemented after the Financial Crisis. Considering that our economy and market here in North America is perceived as being stable and it is being made difficult to remove MY cash from the bank, it made me shudder to think what panic and rage the Cypriots (depositers who are SAVING money, not blowing it!) must be feeling right now.
If its difficult for me to pull my money out now, just think how difficult it would be if we found ourselves in a full-blown financial crisis.
Nothing might happen to the banks here, but somehow I just don't feel like its as secure as it once was, and I don't feel like giving the banksters free money anymore just so that they can continue to rape and pillage the masses. I'll find a better and more secure place to put my assets.
Cyprus bank account tax puts Europe on edge
Officials fear bank run as citizens angered by levy in EU/IMF rescue package
Cyprus's government has postponed a crucial vote on whether to seize almost 10 per cent of the assets of ordinary bank account deposits, a sudden move that the country's president advanced to stave off bankruptcy and receive a bailout from the European Union.
On Friday, President Nicos Anastasiades proposed the surprising plan, which would see lawmakers impose a 6.75 per cent tax on all bank deposits for accounts with under €100,000 in assets. Accounts with more than €100,000 would see a 9.9 per cent tax.
"We're not aiming to gloss over the situation," he said in his first public statement after the EU-IMF meeting in Brussels agreed on the bailout early Saturday. "The solution taken may be painful, but it was the only one" worth taking, he said.
'Germany, France et al came in and said, "We want it, and we are taking it."'—Mark Grant of Southwest Securities
The move could raise as much as €6 billion, and is part of a €10 billion bailout package from the IMF and EU that's designed to get the country out of financial difficulties it fell into when Cypriot banks lost billions on bad investments in Greek banks.
Many parliamentarians, beholden to the voters who elected them, promised to vote against the move and keep bank accounts untouched. There was supposed to be a vote on the matter Monday, but due to the extreme circumstances, it has been postponed until at least Tuesday.
Details of how the levy would be implemented remain sketchy. For instance, it's unclear how joint bank accounts would be calculated.
Monday is a bank holiday in Cyprus. The timing of events was tailored to allow cooler heads to prevail, but predictably, Cypriots spent the weekend withdrawing funds at bank machines throughout the country.
Germany's Finance Minister Wolfgang Schaeuble called the levy part of the "fair" distribution of the bailout's burden. (Cathal McNaughton/Reuters)
The move marks the first time that the IMF and the 17 eurozone nations have dipped into people's savings to finance a bailout, a move that analysts worry may roil international markets and jeopardize Europe's fragile economy.
Germany's Finance Minister Wolfgang Schaeuble called the levy part of the "fair" distribution of the bailout's burden. "The Cypriot banking sector will be significantly reduced to a sustainable level and business model," he said.
Others weren't as diplomatic in their criticism of the bold plan.
"The European Union and the European Central Bank and the IMF have just advocated the confiscation of private property for their own indulgence," said Mark Grant, managing director of financial firm Southwest Securities Inc.
"Bank accounts are not bonds or stocks or some other form of investments. It is private property like your house or your car. Germany, France et al came in and said, 'We want it, and we are taking it, and it is necessary for our government'," Grant wrote in a commentary on the Cyrpus plan over the weekend.
Maybe I'm paranoid. Maybe I'm extreme. But the money in my chequing/savings account isn't earning any interest. So today I went to withdraw the money in my account as cash (approximately $60k) and the fucking bastards won't give me all my money until Thursday. They were able to give me $5k today, $5k tomorrow, $5k Wednesday, and the balance on Thursday.
I didn't expect to be able to get it all today, but I did expect to be able to get more than $5k today, which is a limitation that I found very alarming to me. This must be part of the capital controls that Harper had implemented after the Financial Crisis. Considering that our economy and market here in North America is perceived as being stable and it is being made difficult to remove MY cash from the bank, it made me shudder to think what panic and rage the Cypriots (depositers who are SAVING money, not blowing it!) must be feeling right now.
If its difficult for me to pull my money out now, just think how difficult it would be if we found ourselves in a full-blown financial crisis.
Nothing might happen to the banks here, but somehow I just don't feel like its as secure as it once was, and I don't feel like giving the banksters free money anymore just so that they can continue to rape and pillage the masses. I'll find a better and more secure place to put my assets.