Skip to comments.Bailout tax shock for Cyprus savers
Posted on 03/16/2013 8:42:06 PM PDT by alexmark
People with Cyprus bank accounts will lose up to 10% of their savings as the price of a 10 billion euro (£8.6 billion) rescue package for the cash-strapped country from its European partners and the International Monetary Fund.
The bailout was agreed early on Saturday in a bid to keep the island nation from a bankruptcy that could rekindle the regions debt crisis.
But in a major departure from established policies, the package also includes a one-off levy on the money held in bank accounts in Cyprus. Analysts have warned that making depositors take a hit threatens to undermine investors confidence in other weaker eurozone economies and might possibly lead to bank runs.
In return for the rescue loans Cyprus will trim its deficit, shrink its troubled banking sector, raise taxes and privatise state assets, said the Netherlands Jeroen Dijsselbloem, presiding over meetings of the 17-nation eurozones finance ministers. The assistance is warranted to safeguard financial stability in Cyprus and the eurozone as a whole, he said, speaking after nearly 10 hours of negotiations.
People with less than 100,000 euro (£86,000) in their Cypriot bank accounts will have to pay a one-time tax of 6.75%, those with more will lose 9.9%. The measure is expected to net 5.8 billion euro (£5bn) in additional revenues, Mr Dijsselbloem said, greatly reducing the countrys financing need.
(Excerpt) Read more at tinyurl.com ...
More on Cyprus and the Euro.
More evidence of just how much socialists/liberals simply do not understand economics.
This crazy cyprus deal could screw up a lot more than Cyprus...
‘Cyprus-Rescue Shows, No Accounts Are Safe!’
This is coming here too. Get your money out of the market, and out of accounts that the government could get into.
Interesting post. Thanks.
Good chance this will lead to a contagion effect that spreads to other countries in the region.
Russia is especially furious and can be expected to impose retaliatory measures on the bank accounts of EU nationals in Russia.
This violates international law and reciprocal agreements in safeguarding foreign assets.
got my money out of the market some time ago when I started understand that the feds were propping up it up and it was all a fake.
do you think banks will be open on Monday? How soon before they limit how much you can withdraw in person? ATM’s always had limits I think.
Looks like anyone with any money that wants to deposit (in a sane world) will get a charge and maybe 0% interest rate and possibly negative rate for them holding their money.
This is the stuff of total failure of the system.
I hadn’t even thought of that, but I agree. Russia is going to retaliate, as they should, against this action which has come directly from the EU leadership. They are thieves, lining their own pockets. It’s time they were all rounded up and arrested.
No body is going to invest in Cyprus and it can forget about a Russian bailout.
I just cannot see how this is legal to legally rob every bank customer of 10% of their holdings. Where is the contract they signed agreeing to this? NO LEGAL STANDING, NO CONTRACTS ENTERED INTO VOLUNTARILY.
Get out of the banks now if you want any of your money. I would consider it. Also consider if you need your 401k money, if you don’t want it federalized propping up bonds, if you don’t want to prop up bonds.
This stuff is getting insanely ridiculous. Heat is being turned up on a hundred different issues.
Still wonder why the DHS is buying all that ammo?
The Fed is going to pump like no tomorrow on Monday. The only problem is Ben B has been bailing the EU banks out the last year. Looks like we painted in a corner.