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(Zero Hedge)   You implement an over-the-weekend 6.75% levy on all bank accounts as part of your "bailout plan", we smash through your bank with an excavator. That's the Cyprus way   (zerohedge.com) divider line 135
    More: Scary, Frozen Assets, Cyprus, bank accounts, Jean-Claude Juncker, Spanish Banks, Europe, rescues, deposits  
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10246 clicks; posted to Main » on 17 Mar 2013 at 10:25 AM (1 year ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2013-03-17 11:12:35 AM

orbister: GAT_00: And this bailout is utterly bogus.  They're actually arguing it is right to tax the people who have money in the bank because they are responsible for the actions of the bank, which is ridiculous.  They've also frozen the funds necessary to pay the tax from everyone's accounts already, even though for the plan to be put into place, it requires the approval of Cyprus' assembly.

As with Iceland, a very large amount of the money in and moving through Cyprus is Russian mafia money being laundered. German electors are not keen to protect the financial interests of the Russian mafia, hence this rather crude move.


Which in no way justifies hitting the people of Cyprus with this tax.
 
2013-03-17 11:19:15 AM
One thing is for sure--the E.U. will look worse than ever in Britain, and the UK Independence Party's numbers will shoot higher. Nigel Farage will get that much closer to power. The Tories will start to panic, and someday, we'll be watching endless programs about this on the History Channel.
/Makes popcorn.
//Go, Nigel!
 
2013-03-17 11:19:35 AM
How many times can Cyprus be misspelled in one article?   eesh.
 
2013-03-17 11:25:38 AM
As long as the US doesnt fark up and follow suit I dont really care what socialist policies Europeons are forced to endure. They have their ways and seem to enjoy them.
 
2013-03-17 11:27:50 AM
You know, if I lived in Greece, Italy, Spain or Portugal, I'd pull every cent I had out of those countries banks.  The EU will probably do this again.
 
2013-03-17 11:30:40 AM

GAT_00: The Beatings Will Continue Until Morale Improves: GAT_00: EvilEgg: ArkAngel: EvilEgg: Only on accounts of less than 100,000 euros? Is that class warfare?

It's ten percent on accounts above that

Is it? I got bored.

Yeah, it is.

And this bailout is utterly bogus.  They're actually arguing it is right to tax the people who have money in the bank because they are responsible for the actions of the bank, which is ridiculous.  They've also frozen the funds necessary to pay the tax from everyone's accounts already, even though for the plan to be put into place, it requires the approval of Cyprus' assembly.

I believe this is called the "They bought their tickets. They knew what they were getting into. I say let 'em crash" Doctrine.

Really?  You're equally responsible for every action taken by your bank for having deposits in it?


Guilt by Association is a real thing in some parts of the world. But then so is the crime of witchcraft.
 
2013-03-17 11:32:04 AM
Yeah, well, it hasn't happened yet. I'll admit it's a crude thing to do, but since Cyprus joined the Euro, it doesn't have access to more sophisticated methods such as devaluing the currency. And the only thing really crude about it is how regressive this "wealth tax" is. I suppose that was to mollify those who actually own Cyprus, who would otherwise be aghast at the prospects of actually paying for what they own. Or even more aghast.
Anyway, Parliament hasn't voted on it yet.
 
2013-03-17 11:44:00 AM
Will never happen here, Americans don't have money in the bank do they?
 
2013-03-17 11:44:32 AM

ArkAngel: EvilEgg: Only on accounts of less than 100,000 euros? Is that class warfare?

It's ten percent on accounts above that


Warfare on the upper class!
 
2013-03-17 11:44:53 AM
This is what can happen when you let all your money become 1's and 0's in someone elses' computer.

For those derping about 'OMG Soshalizm!!" ... fine. We'll just take back your medicaid, ebt, schools, police, and fire protection. Can't be letting YOU have any of OUR socialism now can we? You can go dumpster dive and live under a bridge as God intended because you are obviously a bad person that needs to be punished.

/give me back my tuppence!
 
2013-03-17 11:45:19 AM
Those silly Cypriots.  They should have taken a clue from us--tax the citizens indirectly to prop up the banks.

Whatever you do, never let a bank fail.  They're the world's most important people.
 
2013-03-17 11:46:47 AM

rumpelstiltskin: Yeah, well, it hasn't happened yet. I'll admit it's a crude thing to do, but since Cyprus joined the Euro, it doesn't have access to more sophisticated methods such as devaluing the currency. And the only thing really crude about it is how regressive this "wealth tax" is. I suppose that was to mollify those who actually own Cyprus, who would otherwise be aghast at the prospects of actually paying for what they own. Or even more aghast.
Anyway, Parliament hasn't voted on it yet.


It technically already has happened because they froze the money necessary to pay it without passing it.
 
2013-03-17 11:46:56 AM
Since you're only getting what %0.2 on your savings account it seems to me that the best thing to do is keep your money in cash. Get a safe deposit box and store it in the bank where it's safe (unless they plan on taking that too)
 
2013-03-17 11:54:41 AM

DigitalCoffee: This is what can happen when you let all your money become 1's and 0's in someone elses' computer.

For those derping about 'OMG Soshalizm!!" ... fine. We'll just take back your medicaid, ebt, schools, police, and fire protection. Can't be letting YOU have any of OUR socialism now can we? You can go dumpster dive and live under a bridge as God intended because you are obviously a bad person that needs to be punished.

/give me back my tuppence!


No.
No.
Just no.
We can't have this kind of talk.

/They didn't build that bridge. Tell them to live somewhere else.
 
2013-03-17 11:55:08 AM

GAT_00: Really? You're equally responsible for every action taken by your bank for having deposits in it?


Duh!
Otherwise, after you had your white-tie dinner with the president of the bank, you would have realized what a nincompoop he was and decided to make your deposits in one of the other banks whose presidents you attended college with.
Get with the program!
 
2013-03-17 11:56:41 AM
This was a really really really bad idea.
 
2013-03-17 12:02:31 PM
 I am living in Cyprus and there were no queues at cash machines in Limassol yesterday morning, although admittedly that was before the news really broke. We stayed away from Carnival this afternoon, partly because we thought it might turn into a riot (and partly because we've been before and it's a bit crap).

Thanks to speculation about the condition of the banking system over the last year or two we have mostly got used to not keeping too much in the local bank, the majority of my savings is in the UK, however, I have probably lost a couple of hundred Euros, if this affects my chequing account, which I am not sure it does.
 
2013-03-17 12:07:01 PM
One reason we didn't fall into a depression in late 2008/early 2009 is that - unlike the early 1930's - the general public didn't make a run on the banks. If that had happened.... it would not have been pretty.

Which is why this is a very bad idea. If you give people a reason not to trust the security of their money being held in banks ... they'll pull all it out. They'll demand their employers pay them - in cash - and keep the money with themselves ... and boom goes the economy.
 
2013-03-17 12:07:45 PM
They would probably try to take or further restrict firearm ownership here in the US before they tried anything like what is going on in Cyprus........especially anything useful in killing large amounts of people quickly....they would probably leave handguns alone even though they kill more people than military style rifles. Handguns are useless against people equipped with body armor and trauma plates.
 
2013-03-17 12:10:31 PM

GAT_00: Which in no way justifies hitting the people of Cyprus with this tax.


Better just to let them lose everything?
 
2013-03-17 12:16:33 PM

GentlemanJ: One thing is for sure--the E.U. will look worse than ever in Britain, and the UK Independence Party's numbers will shoot higher. Nigel Farage will get that much closer to power.


Not a chance. Farage and his party haven't a hope. the only issue on which they have cross-spectrum support is Europe, and while many people care about that, they don;t care about it enough to change their votes. Their other policies are cobbled together right-wing stuff designed to appeal to the Neanderthal wing of the Tories and offputting to anyone and everyone else. The absolute best Farage can hope for is to reduce the Tory vote a bit and let the staunchly pro-Europe Labour back in.
 
2013-03-17 12:17:06 PM

orbister: GAT_00: Which in no way justifies hitting the people of Cyprus with this tax.

Better just to let them lose everything?


If the problem is Russian money laundering, why are they not seizing those funds for payment instead of punishing the people who are apparently criminals for living in Cyprus?

And if they can't find those funds and seize them, then why are the people being punished for something that can't be proven?
 
2013-03-17 12:20:40 PM

Yeah_Right: One reason we didn't fall into a depression in late 2008/early 2009 is that - unlike the early 1930's - the general public didn't make a run on the banks. If that had happened.... it would not have been pretty.

Which is why this is a very bad idea. If you give people a reason not to trust the security of their money being held in banks ... they'll pull all it out. They'll demand their employers pay them - in cash - and keep the money with themselves ... and boom goes the economy.


Bingo.

For "the system" to work, people have to trust the banks with money.  People don't trust the banks, the whole system crumbles pretty fast.

Deposit insurance is the normal way to ensure people trust the banks enough.  When you start taking a sudden direct tax of savings, directly confiscating the money in bank accounts. . .you just shot that confidence.  That's why taxes are normally either on income received, or money paid out, never touching money that isn't moving at all.

Bad move, EU, bad move.  Consumer confidence in the banking system of every EU state with any financial trouble just took a substantial hit.
 
2013-03-17 12:20:45 PM

orbister: Inyego: This amounts to robbery and extortion. To arbitrarily tax someones wealth for the sins of others to bailout a country you may not even be a citizen of is something everyone should be very worried about. Coming soon to Greece, Spain, Portugal, Italy, US, France .....

Or they could just let the banks fail and then the savers would lose every last euro and cent.


You fail at reading comprehension. This was not a bank bailout, it was a bailout for a government that tried to spend themselves into prosperity.
 
2013-03-17 12:32:31 PM
Eh people need to calm down. The Federal Reserve will continue to confiscate your money in passive/aggressive fashion by promoting inflationary policies by printing money and encouraging financial speculation. You'll get screwed in the end just the same, if not worse, especially if you are on a fixed income..

Of course, if at some point, the world stops believing that the US dollar should be a reserve currency because the Federal Reserve is printing too much money then well..you'll understand why the government bought all that ammunition...
 
2013-03-17 12:37:22 PM

Copper Spork: It's not a levy. It's forcing account holders to buy shares in banks. I don't see how this is any different from people being forced to buy health insurance, really.


So, it's a "tax" then?
 
2013-03-17 12:53:45 PM

ZAZ: If taxing savings is unfair, what would be a "fair" solution to the Cyprus problem?

I expect government-sanctioned retirement plans to go this way in America. Your plan gets nationalized and in return you get an IOU for benefits in 10-30 years.


^^^^^^^THIS

401Ks will be seized, mark my words.
 
2013-03-17 12:57:03 PM
Well, the other solution was to give a bunch of EU taxpayer money to Russian money laundered who blew up the Cyprus' banking system.
 
2013-03-17 12:57:07 PM

EvilEgg: Only on accounts of less than 100,000 euros? Is that class warfare?


Yes
 
2013-03-17 12:58:52 PM

count_chimpula: Eh people need to calm down. The Federal Reserve will continue to confiscate your money in passive/aggressive fashion by promoting inflationary policies by printing money and encouraging financial speculation. You'll get screwed in the end just the same, if not worse, especially if you are on a fixed income..


Oh look, another Libertarian nutter who doesn't understand how inflation works.
 
2013-03-17 01:00:34 PM

Forced Perspective: Copper Spork: It's not a levy. It's forcing account holders to buy shares in banks. I don't see how this is any different from people being forced to buy health insurance, really.

Put in American terms, this plan represents the democrat party ideal of subjects that exist to serve the needs of the state, and opposition the republican party ideal of a state that is A) too small to fit anywhere except in a cootch or B) be drowned in a bathtub or C) exists to serve the needs of its citizens its corporations.
I am sure that somebody can draw some distinction between tyrannically forcing people to buy satanic health insurance at gunpoint and gently encouraging them to accept a "levy" for the good of the holy sacred banks, but it would be quite the act of rhetorical gymnastics.


There, little kitty was helpful and fixed that for you
 
2013-03-17 01:08:50 PM

Alone in the Snark: Greece and Ireland went down, Spain nearly went down, France, UK and Italy are struggling, Germany and farking goddamn Scandinavia are roaring on all cylinders.

So you are correct that there is a relationship between welfare state and recession. You just got the sign wrong. Strongest welfare states did <i>best</i> in the recession.


Nope it is just catching up with them later.

Germany may fall into recession in 2013

"The cyclical outlook for the German economy has dimmed," said the Bundesbank in a statement. "There are even indications that economic activity may fall in the final quarter of 2012 and the first quarter of 2013."


And if your argument is that they did better maybe because Sweden introduced austerity measures AND cut taxes-in effect reduced their welfare burden

www.americanthinker.com

www.americanthinker.com


"In the 1990s, following a financial crisis and the worst recession in Sweden since the 1930s, Sweden faced a deficit of over 11 percent of GDP in 1993. Soon thereafter, the government enacted a large deficit reduction plan to restore confidence in its currency and enhance its budgetary flexibility. It reduced its subsidies for medical and dental care, indexed certain taxes, and increased contribution rates for the unemployment benefit system. Ultimately, Sweden reduced its debt by establishing a goal to make surpluses equal 2 percent of GDP. By 2004 Sweden was running budget surpluses, and in 2008 the country's debt was 38 percent of GDP."

Swedish government

" While most countries in Europe borrowed massively, Borg did not. Since becoming Sweden's finance minister, his mission has been to pare back government. His 'stimulus' was a permanent tax cut. To critics, this was fiscal lunacy. Borg, on the other hand, thought lunacy meant repeating the economics of the 1970s and expecting a different result.

Three years on, it's pretty clear who was right. "Look at Spain, Portugal or the UK, whose governments were arguing for large temporary stimulus," he says. "Well, we can see that very little of the stimulus went to the economy. But they are stuck with the debt." Tax-cutting Sweden, by contrast, had the fastest growth in Europe last year, when it also celebrated the abolition of its deficit. The recovery started just in time for the 2010 Swedish election, in which the Conservatives were re-elected for the first time in history."

Some Austerity is Good Austerity
 
2013-03-17 01:19:35 PM

mikaloyd: Thanks Europe! For making our idiots in power look better by comparison


The idiot is the one who can't farking tell the difference between the continent of Europe and the EU.

Especially the complete moron who wrote this article. He thinks the Russians will be angry?

WTF. Russia just extended a loan to Cyprus, after a meeting with the ECB.

Russia doesn't want to extend a loan and have that money just go to the Russians who can't have a bank account in Russia because they're bloody criminals.


You think those Russians have 10x the times of the Cypriotic GDP in their banks because they just love Cyprus so much? That's incredible naive.

---

Yeah, sucks for the Cypriotic people. They got screwed by their banks, and I assume, also by their government that allowed this to happen.


It won't lead to a run on the banks in other countries, because banks in other countries aren't funded by the Russian mafia.
 
2013-03-17 01:21:14 PM
More proof that "independent" (aka privately owned) central banks are scams, and have complete control over many countries and governments.  "The Central Bank of Cyprus was established in 1963, shortly after Cyprus gained its independence, as an autonomous institution in accordance with the  Central Bank of Cyprus Law 1963 and the relevant articles of the Constitution."  Is this any worse than when the Fed seized all privately held US gold in 1933?
 
2013-03-17 01:22:12 PM

LawrencePerson: The European welfare state is unsustainable. Europe is broke, and this is just the most advanced example of the Eurocratic elite and the bankers ganging up on other citizens. The end result will be a bank run in Europe. And once bank runs start, they're very hard to stop.

Have a nice day.


The EU, not Europe.

And in 10 years you'll post back saying you were wrong when proven so.

And what's your deadline for comming back and saying you were wrong on the bank runs as well. Tommorow?
 
2013-03-17 01:23:25 PM
At what point of success does the feeling that you aren't responsible for your own mistakes arise?
 
2013-03-17 01:26:07 PM
Shazam999: 
Scandinavia is a country now?  Man I hope someone told Finland.

Finland isn't in Scandinavia. ;)

---

Anyways, just for the record. I think taking money out of peoples account directly is insane.

I can wanting to fark the Russian criminals over, but ordinary Cypriots?
 
2013-03-17 01:37:02 PM

LawrencePerson: Hope those free condoms and cell phones were worth destroying the economy for.


media.tumblr.com
 
2013-03-17 01:54:14 PM

GAT_00: And if they can't find those funds and seize them, then why are the people being punished for something that can't be proven?


So, once again, do you think it would be better just to let the banks fail? Serious question.
 
2013-03-17 01:57:31 PM
It's sad how weak the trolls are now days.
 
2013-03-17 02:01:34 PM

libranoelrose: It's sad how weak the trolls are now days.


*sigh*
 
2013-03-17 02:06:47 PM

Inyego: You fail at reading comprehension. This was not a bank bailout, it was a bailout for a government that tried to spend themselves into prosperity.


It might be wise to read a little more about the situation before making potentially embarrassing comments. As the BBC puts it:

President Nicos Anastasiades said refusing the bailout would have led to the collapse of the country's banks.

and also

The banks are central to this story. They grew rapidly. By 2011, the IMF reported that their assets - which include all the loans they have made - were equivalent to 835% of annual national income, or GDP. A chunk of that is down to foreign-owned banks, but those that are Cypriot had made loans to Greek borrowers worth 160% of Cypriot GDP. There have been losses on the loans to private borrowers because of the depression that has hit the Greek economy. And the value of the debts owed by the Greek government was cut in a debt relief exercise undertaken last year. It might have helped Greece, but the Cypriot banks were hit.
 
2013-03-17 02:08:50 PM
You want us to believe that Sweden's government spent 67-68% of the country's GDP up until 1992?
 
2013-03-17 02:15:51 PM

CujoQuarrel: Since you're only getting what %0.2 on your savings account it seems to me that the best thing to do is keep your money in cash. Get a safe deposit box and store it in the bank where it's safe (unless they plan on taking that too)


When there's a bank holiday, you can't access your safe deposit box. But yes, you're right that when interest rates are ridiculously low, it makes sense to keep your money in cash. I'm sure the people of Cyprus are wishing they had done so last week.

Tomorrow I'm going to pull some of my money out of the bank and hold the cash in my own safe. I'd really prefer not to, and I don't think a bank run is highly likely here in the US in the near term, but you never know. There have been several instances of bank runs and bank holidays in the US, and it'd make me feel a little safer to have some cash on hand.
 
2013-03-17 02:25:20 PM

Flint Ironstag: With interest rates so low there is nothing to lose by keeping all your money under your mattress, or transferring it to a bank account in a safe country.


Kind of hard to have sympathy for a country that was used to hide assets.  Needs to happen more with like-minded tax domiciles (even if it means unannounced takeovers by the US/UK/EU of what are essentially easy targets).
 
2013-03-17 02:30:02 PM

LawrencePerson: The European welfare state is unsustainable. Europe is broke, and this is just the most advanced example of the Eurocratic elite and the bankers ganging up on other citizens. The end result will be a bank run in Europe. And once bank runs start, they're very hard to stop.

Cyprus is where Greek will be next year, followed shortly by Spain, Italy, and then most of the rest of Europe. And then shortly thereafter, thanks to those trillion dollar deficits, us.

Banks runs. Hyperinflation. And maybe 25% economic contraction in one year. If we're lucky.Hope those free condoms and cell phones were worth destroying the economy for.

Have a nice day.


Tax evasion (yes, even those who call it "creative accounting" or "tax avoidance") is a biatch, especially when your country makes it the national sport.

/I'm on the side that ends up protecting the country from tax evasion.
 
2013-03-17 02:36:54 PM

orbister: GAT_00: And if they can't find those funds and seize them, then why are the people being punished for something that can't be proven?

So, once again, do you think it would be better just to let the banks fail? Serious question.


I think there are better ways of fixing the problem than yet another stupid solution from the EU.
 
2013-03-17 02:37:51 PM

hasty ambush: Alone in the Snark: Greece and Ireland went down, Spain nearly went down, France, UK and Italy are struggling, Germany and farking goddamn Scandinavia are roaring on all cylinders.

So you are correct that there is a relationship between welfare state and recession. You just got the sign wrong. Strongest welfare states did <i>best</i> in the recession.

Nope it is just catching up with them later.

Germany may fall into recession in 2013

"The cyclical outlook for the German economy has dimmed," said the Bundesbank in a statement. "There are even indications that economic activity may fall in the final quarter of 2012 and the first quarter of 2013."


And if your argument is that they did better maybe because Sweden introduced austerity measures AND cut taxes-in effect reduced their welfare burden

[www.americanthinker.com image 601x363]

[www.americanthinker.com image 600x368]


what your charts show: in times of good economic performance, Sweden cut government spending. Spain & Ireland did the same.

during the 2008 downturn, government spending increased to offset the economic decline. once the economy returned to normal, the budget cutting renewed.

the solution for the economies of Europe that are contracting is stimulus, not austerity.
 
2013-03-17 02:42:44 PM
Here's a fun fact...

The demonym for Cyprus is Cypriot.

/Enjoy your Sunday!
 
2013-03-17 02:56:03 PM

hasty ambush: Swedish government


So, conservatives are now holding up Sweden as a model economy? I'm glad that liberals and conservatives can finally agree on something.

Now we just have to cut taxes down to Swedish levels, where people who earn $45000 a year can pay up to 70% of that in tax.

It's great that conservatives are finally willing to agree to sensible policies.
 
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