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View Diary: Bank Run in Cyprus, Will it Spread to Southern Europe? (322 comments)

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  •  This I have been saying was (2+ / 0-)
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    marsanges, Cliss

    Likely to happen if any country decided to get of the euro. Funny thing is by imposing this in a country staying in the Euro they are fostering a possible bank run in Greece, Italy, Portugal, Spain and Ireland at least.

    It's the worse kind of measure. The whole thing was to try to get revenue from the tax evading capitals from Russians and Brits in Cyprus and force the stupid  Cypriot government to end their crazy attempt of being the Cayman Islands of Europe while still being part of the Euro and the Union. Anyone that has hold a political position on the island above dog catcher should be fired and levied a special tax

    •  It is a special tax. (1+ / 0-)
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      I must say I am beginning to like this deal better, as I learn more about it.

      It isnt a violation of the Depositogarantiestelsel, deposit guarantee system. That guaranteed insurance is supposed to protect deposits if a bank cant satisfy payments anymore. That hasnt happend yet. Instead, the cypriotic state wants a bailout - through itself - to avoid Zahlungsunfaehigkeit of thev banks. To avoid the deposit guarantee case.

      It has gotten this bailout credit - under the consition that it lecies a tax on every deposit, see diary.  

      Using this construction, the deposit guarantee is out of the picture and the depositors are forced to take a share of the losses. A share. Because, 2/3 of the required bailout money are still coming from EU taxpayer money. (That means, from me personally, and any number of compleltely innocent otgher working Europeans).

      And what happens - in best tax evader manner - people who had the financial means to park hundred thousand euro sums in Cyprus to evade taxes on the Continent, now claim "it´s robbery!" and try to extract thier money in a bank run, to flee to yet another tax haven. OK! Now taxation is robbery?

      Yes I am beginning to like the deal. I´m going to pay 1/3 less to save the asses of tax evaders - who are, to a not small fraction, compatriots of me who didnt like paying taxes at home.

      They get 1/10th of their precious money converted in cypriotic bank shares. I particularly like that part. Let them take an interest in a company instead of going on rent-seeking fiscal flights!

      The actual cypriotes - those who would have lost their full money too if this tax haven madness had sunk their banks - they can wait out the time to reconvert those shares since they live there anyways.  A UK tax evader suddenly finds that they is immobilized to the haven they have chosen! That is a lesson that I can appreciate.

      Well, and the actual cypriotes have gotten one thing out of this that no one here has yet highlighted.

      Einschnitte bei Löhnen und Renten habe sein Land verhindern können, betonte der [zyprische] Finanzminister.
      "Cuts to wages and pensions have been averted, emphasised the cyproit min of Finances."

      What we hear are the loud cries of tax evaders that are taken to task - be they british, greek or russian. What we don´t hear is a part of the deal that is actually important for those who are actually on the poorer side: No state bankruptcy,  no enforced wage cut, no enforced pensions cut.

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