So, what unintended consequences do you see happening here?

[draco664]

Cyprus is a piddly little island in the Mediterranean. It doesn't sit large upon the world stage, but that may change soon.

Cyprus' banks are broke. So, just like all the other banks around, they went cap in hand to the EU, hoping to get some of that lovely free money. (http://www.businessinsider.com/cypru...#ixzz2NmchywYF)

Unfortunately, the bailout they received had a couple of strings attached. One of which is that 10% of all depositor accounts over 100,000 euros would be confiscated to help offset the costs of the bailout. (On depositor accounts under 100k, the rate dropped to a mere 6.7%)

Who here thinks that people are not going to trust banks with their money any more? Especially since the EU can pass laws that are contrary to member nations' own laws.

Personally, I foresee a run on banks (mostly in PIIGS), and that may extend to throughout the EU.

[SongsOfDragons]

Housemate is seriously considering withdrawing her savings to bung in a safe. She, and I, can't...really...see how they're able to do this legally. It may be because I'm missing something that's been explained in finance jargon, but still.

There probably should be more uproar in this country than there is. Either that or coming home from the Nationals this weekend has caused me to miss it. I'm waiting to see...but if it gets to that stage I'm hoping I can grab my ISA contents beforehand.

sad times.

[s_stabeler]

yeah, banks don't have enough money to pay their debts, so lets take some of that money to fund the bailout.


this is an exceptionally stupid way of selling the package to the German public. ( the idea is that the Cyproits are feeling more of the pain if I am reading ti correctly, unfortunately, it seems it'll cause problems for quite a few brits.

[mikoyan29]

How are the depositors responsible for the shenanigans of the bank?

[SongsOfDragons]

From what I've read, they think the majority of depositors into Cypriot banks are Russian tax avoiders and money launderers. They don't want to have to protect them if they bail out Cyprus.

They = EU, I think, may be wrong, may be a smaller finance section of the EU.

Here's the BBC's take..

[MadMike]

How are the depositors responsible for the shenanigans of the bank?

The same way taxpayers are responsible for the shenanigans of the politicians. In other words, they're not, but they're still going to have to pay for it.

[s_stabeler]

less responsible, actually. Taxpayers at least voted politicians into power ( yes, you might not have voted for the government; not the point. My point is taxpayers at least had a choice.)

[PepperElf]

From what I've read, they think the majority of depositors into Cypriot banks are Russian tax avoiders and money launderers. They don't want to have to protect them if they bail out Cyprus.

They = EU, I think, may be wrong, may be a smaller finance section of the EU.

Here's the BBC's take..

"Russian tax avoiders" is a nicer version of what I was told… I was under the impression that it was their mafia / drug cartels that were banking there.


Maybe it's me but… I'm not sure I'd want to get myself on their hit lists.

Personally, I foresee a run on banks (mostly in PIIGS), and that may extend to throughout the EU.

IIRC they are freezing the accounts so that people CAN'T do that. Not until the tax money is stolen out first. (assuming the vote goes in favor of the tax)

[SongsOfDragons]

Vote from the Cypriot government has gone against, and thoroughly so.

Your move, EU finance...

[draco664]

Vote from the Cypriot government has gone against, and thoroughly so.

Your move, EU finance...

Indeed. Funny how it wasn't the voter outrage that changed the MPs minds. All it took was a quiet word in their ears by some pissed off Russian Mafia... I can't imagine why they suddenly got cold feet.

[Panacea]

Indeed. Funny how it wasn't the voter outrage that changed the MPs minds. All it took was a quiet word in their ears by some pissed off Russian Mafia... I can't imagine why they suddenly got cold feet.

It wasn't the Russian Mafia, either.

It was the stunned amazement of prominent economists combined with an attempted run on the banks combined with a smackdown of the European markets that changed their minds.

Whoever thought up that asinine idea should be banned from working in finance, banking, anything to do with money for life if his plan is to cause a complete collapse of the banking industry.

[MadMike]

Taxpayers at least voted politicians into power

It doesn't really make a difference which politicians you vote for. You get ripped off either way.

[Rapscallion]

Unfortunately, the bailout they received had a couple of strings attached. One of which is that 10% of all depositor accounts over 100,000 euros would be confiscated to help offset the costs of the bailout.

The version I heard is that the string was that the Cypriots had to contribute towards it and it was the idea of one of their politicians to enact that tax. They're now shitting themselves over finding other ways to deal with it.

Rapscallion

[s_stabeler]

It doesn't really make a difference which politicians you vote for. You get ripped off either way.

true, but the point is that taxpayers are at least theoretically capable of finding someone more honest.

but yeah, they have something like 4 days to come up with a better plan, or the bailout's off. ( incidentally, why is the Cyprus government being asked to contribute when it's the Cyprus government that needs the bailout? isn't the whole point that the Cyprus government is out of money?)

[SongsOfDragons]

I think the idea of a bailout is that you've first got to prove you aren't just going to spend it on sweets, by coming up with a small contribution first.