Millhouse

Bailout levy

- Depositors with under 100,000 euros deposited must pay 6.75%
- Those with more than 100,000 in their accounts must pay 9.9%
- Depositors will be compensated with the equivalent amount in shares in their banks


I love this approach - rather than raising taxes that may not actually come and cripples you going forward, the population has been forced to buy shares in the banks. Ballsy move.

Bahtatboy

But if everyone takes their money out of the banks...

Millhouse

that is an unintended consequence I am not here to think about.

Beaverstate

Smart money is already gone.

NorthernLad

According to Sky news, there is €70 billion on deposit in their banks, €20 billion of it Russian money.

scot47

A new variant on currency reform. You waken up and your money - or some of it - has gone.

UKCityGent

The money hasnt "gone" - it has been transferred into the form of shares of the bank.

What would worry me more is that this is the first time the governements have done this and would this be a new standard. I think Monday/Tuesday you may see bank runs especially in Greece and Spain. If that does happen then the Euro will go down to a new lower and the markets will lose their recent gains.

Millhouse

It's gone then, no? You have just described a debt-equity swap - and debt is the driver of money under a fiat monetary system. The value may not have gone though -- if you believe the banks will be there tomorrow once the run is over.

The_Citizen

Was talking to a colleague who is from Cyprus and his wife is still living there. Apparently there were riots last night in some areas and all the ATM's have been blocked so nobody can take money out!

scrubbedexpat141

Shame for the folks living there, still, I have absolute faith in an Cypriot government to manage the economy out of this.

nonthaburi

http://www.edmundconway.com/2013/03/...edy-of-cyprus/

Kix

But the Cypriot Government is just like Greece, they're in there for themselves.

A previous company I worked for would regularly pay massive bribes to Greece/Cyprus to win business.

It lined the pockets of the ministers/CEOs etc. but it's basically broike the countries.

To give you an example, we would usually charge around 10cents for a transaction, with Cyprus and Greece we charged over $20.

And purely to pay the bribes.

Ridiculous.

I do feel sorry for the populace, but they did vote the government in.

scrubbedexpat141

Their options are limited though, no?

Same shit different toilet.

It's inherent in the Greeks to be ****ing lazy and avoid all costs to government etc. Dad lives in Crete and the tricks they pull to avoid council taxes etc etc are just mad. Pretend to build an extra floor, just leave some reinforced columsn sticking out the top and tell the council you've not finished building yet so don't have to pay council tax.

soukie

I wonder if the Russian Government will help all the Russians who have money in Cyprus? Limassol is known locally as “Lima-grad”.

The Dean

It is the most outrageous and astonishing thing I've heard in EUR-history (and that is a tough title to win). The banks are insolvent so the shares are worthless (try to work out the 'book value' for some of those banks....) - and you cannot sell the shares anyway........

It is another nail in the EURO-coffin..... and I worry about this sort of thing on a wider socio-economic scale: at some point (maybe not far off) the people of Europe (particularly in the southern nations) will rise up in civil violence against austerity, etc, while those in the north will rise up against their taxes being raised again and again to pay for the profligacy of southern governments.

Then, gangs of racist vigilantes will start patrolling the streets, torching houses and intimidating residents in largely immigrant neighbourhoods, because far right parties and pressure groups will have convinced them that immigrants are to blame for unemployment, high taxes, high unemployment, etc..........

One day, future history students will find plenty of material for their dissertations on The European Civil War of the early-21st-century........