Posted on 03/17/2013 3:17:20 PM PDT by Lorianne
The president of Cyprus Nicos Anastasiades said in a televised address on Sunday that the controversial bank levy being imposed as part of an EU bailout deal is the "least painful" option available under the circumstances
President Nicos Anastasiades said Sunday that a controversial bank levy on private depositors in Cyprus banks as part of an EU bailout deal was the "least painful" option for the financially embattled island.
"I chose the least painful option, and I bear the political cost for this, in order to limit as much as possible the consequences for the economy and for our fellow Cypriots," Anastasiades said in a televised address to the nation.
As a condition for a desperately-needed 10-billion-euro ($13 billion) bailout for Cyprus, fellow eurozone countries and international creditors Saturday imposed a levy on all deposits in the island's banks.
Deposits of more than 100,000 euros will be hit with a 9.9 percent charge, while under that threshold the levy drops to 6.75 percent.
Anastasiades urged all political parties in Cyprus to ratify the terms of the EU deal when parliament meets on Monday.
"I urge the parliamentary parties to decide, and I will fully respect their decision, in the best interests of the people and this country," Anastasiades said.
"I hope that together, based on the facts as they have developed, we will take the wisest decision," he said, adding, "the road ahead will not be easy."
"The solution we came to is certainly not the one we wanted, but its the least painful under the circumstances," the president said.
Anastasiades needs to get the legislation ratifying the deal through parliament before banks reopen Tuesday after a long three-day weekend or face a run on accounts.
But Cyprus media reported that the scale of revolt against the agreement among MPs has thrown into disarray his efforts to do so over the weekend, and HE MAY HAVE TO DECLARE AN ADDITIONAL BANK HOLIDAY ON TUESDAY.
Cyprus also postponed until Monday an emergency debate in parliament on the deal that was scheduled for Sunday.
If I were them, I'd be looking over my shoulder every second. They will reap the whirlwind.
“I think this is an EU strategy for moving capital out of Cyprus to stronger EU safe havens. And it is working. OTOH the US has no interest in chasing investments out of the US.”
This is one of the most important actions of the ongoing credit crisis - an end game of confiscation, moving capital FROM depositors, to make stockholders and bankers whole. If it is forced on Cyprus, it will be the first shot, and will be heard around the world, undermining the credibility of banking and bankers, markets and governments.
If it can happen in Cyprus, which is just .2% of the EU, it can be carried out anywhere. If they can take 9.9%, why not 40% as the IMF originally proposed?
Watch for violence. Pay attention to whose bodies are hanging from bridges, lightpoles, trees and fences.
The US is systematically chasing capital from our shores right now, through excess regulations, taxation and oppression of its citizens via FATCA. It will end with capital controls here to prevent the flow.
Keynesian economics hates savings and defends attacking it anyway the Gov't can.
They believe spending, not savings, drive the economy, when in fact, without savings, there is no capital investment, and thus, nothing to buy!
Sadly the Keynesians appear to be correct while they hollow out the economy with their cheap money. The short term economic bounces are all about one last debt-fueled binge of spending and speculation. There are few investors anymore, just a herd following trendy sectors and stocks.
Did you write the same post for TARP? If not why not?
This a most inauspicious omen. Which is more disturbing, the ECB’s(Merkel’s) iron fist, the utter pretense that it’s “only Cyprus”, the possibility that it’s a trial balloon, or possibility of flash-mob panic?
Drudge has some good links on this. Bloomberg has good coverage as well.
at this stage, that's just reflecting the 1.5% selloff of the euro. As was posted on another thread, the $ is still the lesser evil between the euro and the $, and will be something of a safe(r) haven.
“Did you write the same post for TARP? If not why not?”
If you are asking if I criticized TARP and its descendants, YES
Free Trade Communism never works.
The EU is crumbling, and yet, fools in this country keep pushing for the same nonsense....expanded NAFTA, North American Union, more Free Trade, more Open Borders, more subsidies for exporters and no tariffs on importers, and more Socialism to placate the masses.
I hate to be a bank employee in Cyprus on Wednesday
“It would be the same thing here if withholding were abolished and people had to write a check monthly or quarterly payable to government.”
Bad example. People who own their own businesses, as opposed to receiving a pay check, do just that.
No, the difference between this and all other taxes, is that this is on assets not on earnings. The person with the Cypress account may have already paid 50% tax on this money when it was earned.
I read that at first, they offered shares in the bankrupt banks. Next offer was for natural gas bonds. Haven’t heard beyond that.
This will not end well. And, if it doesn’t end in bloodshed, other Euroweenie countries will emulate it. That will end even worse.
With interests rates essentially zero (like the pretend out-of-control president), why have a savings account at all? Your 401k and IRAs are next and with early withdrawal penalties your options may be limited. Quietly buy gold and silver and bury it in a safe place.
Has all the clumsy makings of a “tipping point”.
“Property taxes are folded into your monthly mortgage payment,”
Only if you are irresponsible and should never have been allowed to purchase a home since you didn’t put down 20% or more as a down paymwnt.
You're thinking of Property Mortgage Insurance...I paid 50% down and still had to put the property taxes into an escrow account as part of my payment.
No way, if you put down 20% or more you can opt out of impounds as I did in 1966 when we bought our home.
Since then any property I’ve bought was for cash.
Heh. That only makes it a property tax. But I don’t even think that is this scenario. This is a senior secured creditor taking a haircut. Scary but not unheard of. Look at all those screwed by GM.
What is bank account but a debt the bank owes?
Are you comparing bond holders to bank accounts? So according to you bank accounts are instruments of debt?
Bank accounts have never been secured debt. In the scale of risk/reward, interest on bank accounts was much lower than bonds because they were secure, not secured, but secure.
I agree with everything you said.
Obama’s witholding permission for Keystone Pipeline is chasing capital to China. Not allowing offshore drilling chased capital to Brazil. And countless other examples of tying Gulliver down with thousands of strings.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.