tommy.irene

The deal – which was clinched last Monday between Cyprus, the European Union and the International Monetary Fund – made clear that richer bank customers would shoulder a much larger bill.
Although it is not known how many of the 60,000 British expats living on the island have deposits of more than £85,000, it is likely that a considerable number will be caught in the net.
Neil Hodgson, 48, who moved to Paphos, on the south-west coast of the island, six years ago, said he has lost nearly £200,000. The former farmer, who has two accounts with Bank of Cyprus, added: ‘I had more than €300,000 in my deposit account and €20,000 in my current account. When I went to the bank the other day I was told the total balance for both is €100,000.
‘They were unable to explain how this had been worked out but indicated I might get some back at a later stage.
‘I checked online and it confirmed that the €20,000 in my current account remains, but that I only have €80,000 in my savings account. It’s robbery, plain and simple.’


Read more: http://www.dailymail.co.uk/news/arti...#ixzz2P6NNuC7Z

olivefarmer

My view is that our EU mandarins have used Cyprus as a test bed for other countries.

many European countries are going to run out of money, including Britain.

What better place to find money than in bank accounts? It actually makes sense but of course isn't at all palatable.

Jontee

I read about UK ex pats who had sold up and moved to Cyprus with the proceeds from the sale of their UK home. They bought a piece of land and the rest of their money was in a Cyprus bank whilst the building project was being worked on. Now, after the bank grab they don't have enough to build their house. There must be many people in this kind of position with their future plans shattered, with no way out of the situation, nor the money to give up their plans and move back!
I would really worry if I was currently planning a move to Spain as I don't think I would want to put a large amount of money into a Spanish bank, just in case.

steviedeluxe

I would suggest that you are far more likely to lose money on stamp duty fees, or cgt or even a big 20% currency devaluation (either way) if a governments decides to go down that route.
Not that governments wouldn't do this if they thought they could get away with it, and it provided enough money.
It's terrible for those who had more than 100k in Cypriot banks, and have been caught out. But we've been given advice for a long time now not to go over the 100k euro limit in a bank account, home or abroad, as anything above is not guaranteed.

Mitzyboy

........ hence why I have never kept large amounts of cash in Spain. We keep our bank balance at a level for living needs month by month, being well aware of the Haciendas ability to dip into your account without notice if they choose to do so

amideislas

No doubt this precedent, along with the continuing risks of banks being raided by governments, will restore confidence in the banking system and discourage people from hiding their life savings.

sigh

steviedeluxe

Answer me this. Is someone with say 300k, more likely now to go and buy a house, or a yacht, or buy shares, or start a business....or are they more likely to keep the money in the bank or even under the mattress?
Of course, they may well divert the money to a Swiss bank account, or send to their cousin in Brazil etc. But it's going to be very interesting seeing how money flows change over the coming months. And of course "interesting" can be a curse...

amideislas

Well, like many, they may have built something throughout their lives, saved the rewards of that work, and now live off of it.

In the old days, you could put it into a bank, an investment fund, or something like that.

But as governments exhibit increasing desperation, and start resorting to draconian measures such as this, I think even you might agree that it would cause a great deal of concern to anyone who is "exposed" to it, and the situation is likely to scare the hell out of people, strongly encouraging even those with a small nest egg to either put it in the mattress, or in some offshore account somewhere out of the reach of desperate government hands.

To those who may have previously been full Europhorics or just "on the fence", this is only further testament to the instability and risks of the Eurozone. In any case, there is no positive result, other than snagging a few billion in cash, and further scaring the money into hiding.

By the way, if you think €300K is somehow "decadent" or otherwise enough to buy and maintain something like a yacht or a mansion, then I have to believe you are not living in this century.

Beaverstate

This confiscation need not be limited to bank "deposits". Once the door has been opened... what can a government entity do.

steviedeluxe

I really don't think being "in the Eurozone" is more or less dangerous by itself. A New Zealand bank has had the haircut treatment this year, and according to this report http://www.alternet.org/economy/thin...-uk-depositors there are British and American confiscations being planned. You don't need to have had money in Lehmans, Equitable Life or a Maxwell pension scheme, to know that money risk is not confined to the continent.
The biggest cut in income most people on this board would have suffered, was when the pound reduced in value from about 1.65 to 1.05, although it's now recovered a bit. Maybe one positive outcome of this affair will be a further weakening of the Euro, but I'd be wary of anyone claiming to know for certain what the future value of a currency will be. Even the "experts" seem unable to get that right.

davidinspain

It'll be interesting to see the effect on future generations.The idea of working hard and investing in a good pension and having savings safely squirreled away in the bank is now somewhat redundant Maybe the Shameless lifestyle will become the new model
http://www.channel4.com/programmes/s...tsworth-estate

Fredbargate

Wrong link Dave

This is the Chatsworth Estate I know

http://www.chatsworth.org/

amideislas

I'd be very surprised if the British would ever allow bank raids without widespread civil unrest.

And the Americans... Well, such a thing would not only be in all ways unconstitutional, but Americans would NEVER put up with that. Ever. There would be widespread civil unrest, riots, and in the end, a full coup d'etat. Unlike Europeans, they don't view themselves as subordinate to their government, rather, they believe their government is subordinate to them and would never stand for such a thing. Besides, the US isn't anywhere near as desperate as EU states, so the entire hypothesis is rather irrelevant.

Europeans are a different story altogether. Many Europeans would just wince and bear it. There are a few who actually embrace the notion of becoming poorer and poorer for the foreseeable future, "'cause it's the fair and right thing to do".

For me, I just can't buy into the notion that penalising prosperity will somehow make the population more prosperous. It's an oxymoron. Unfortunately, in reality it will only make the prosperous more prosperous, and the unfortunate less fortunate.

davidinspain

pete_l

Could it happen in Spain too?

No. Cyprus may well be a sovereign state and in the EU, but compared to Spain (or the UK), it's nothing - a tiny little "blip". The banks in Cyprus were so poorly regulated that nobody cared when they bet everything on buying Greek bonds - probably the dumbest, most high-risk, gamble that it was possible to make at the time. The regulation of Cypriot banks was so slack (or corrupt, decide for yourself) that they were a haven for mafia gangs, russian organised crime and anyone who wanted to keep a stash out of harm's way. The Cyprus government turned a blind eye to all these goings on, to the point where the amount of money in their banks was many, many times the GDP of the country. Which of course, meant that the government had an easy source of tax revenue, without having to look at the otherwise doomed Cypriot economy - or take any of the hard decisions that would have been needed to save it (if the banks weren't there).

It was begging to fail - and nearly did a few years ago, saved by a loan from the russians.

Spain, Italy, UK and every other major country in Europe is in a much better situation, despite what The Daily Mail might say - or hope. Nobody else has such a badly managed government, nor such an imbalanced economy. Even countries like Monaco or Lichenstein, who know how to run large, shady, financial institutions will survive the crisis, but Cyprus was trying to play in their league - but without a clue how to. Bad things have happened all over the continent and still more will. However Cyprus should never have been allowed "out" on it's own. It is too small, badly run by incompetent politicians and incapable of looking after its own citizens.