Cyprus has reportedly agreed to a new scheme to tax deposits in order to raise the money to bail out its banks.
According to Reuters, a 20 percent tax on deposits over 100,000 euros at the Bank of Cyprus would be levied. That would be coupled with a 4 percent tax across the board elsewhere.
Ouch!
EU purportedly guarantees deposits of 100,000 Euro or less against default. How does this “tax” square with such a guarantee? It doesn’t.
How does the EU hope to ever retain large foreign depositors when they’ve hung them out to dry in an EU member state? They won’t.
This has been a tremendous game of chicken and the EU just blinked. They’ll quietly find some face-saving means of a full bailout. The consequences across the EU are too great to allow this.
What really s*cks is, it’ll probably be the Federal Reserve that ultimately bankrolls the whole thing. They’ve been recapitalizing the EU all along since 2008.
And when everyone pulls their money out of the banks to avoid the tax, then what?
The smart money...would let Cyprus collapse within the EU. The EU is neither stable or sustainable. Every member state of the Euro is a socialist mess with debt up to their ears.
You don’t try to save a drowning person of they will not follow your instructions lest they take you down with them.
The EU and all od the countries who signed on to the Euro did so with the thought that they could set up utopia and if it crashed then someone else would be on the hook to clean it up.
The EU is doomed, and they simply will not be able to save themselves from their own greed.
Socialists are the most greedest.