Eurocrisis: Cyprus. Say goodbye to 7% of your savings :-)

— the banks man ! it’s the banks ! —

Just heard that with the last eu-aid to Cyprus private savings accountholders are going to ‘contribute’ to the bail-out with around 6-10% of their savings.

Seems to me to be a silly measure (and a very scary precedent):

  • It comes out of the blue. Nearly -totally- unexpected, especially for the holders of accounts less than 100K. You just cannot implement such a ‘revolutionary’ measure out of the blue. It makes you unpredictable and untrustworthy. Bodes very ill for the confidence in the EU.

    One of the strong points of European countries is that they have had, and still have, a “right of law”. We could always fall back on some fundamental, unassailable, civic rights. An important part of our -economic- right of law is now being grossly trampled upon.

  • I can remember that with one of the last bail-outs for Greece there was talk of the private sector (being banks as stakeholders/culprits) contributing. I have heard no mention of this in relation to the current Cyprus bail-out.

    So now it’s the private citizen, not only his salary/pension/social security/health care, but also his savings being held to ransom/ransack.

    When I lived in Spain and a little child, say Natalie, was murdered the village would express it’s anger and emotions with placards saying “Todos somos Natalie”, “We are all Natalie”. Now, or some day soon, maybe we can say “We are all Cypriots !”. We may think we are safe here in nw-europe but I doubt it.

  • Of course we now get nice stories like “yeah it’s russian black money/money laundering”, or “cypriot bank-holdings are totally out of proportion with GDP”. Nice convenient story like “Greeks are lazy” and the Greeks “doctored the state-books”. Let’s just put the blame/justification on the russians. And not look at how this could have happened (failing brussel/frankfurt control, response) and how to take measures to prevent it from happening again.

    Even worse, let’s not try and explain it to the Cypriots, them not being us of course. Just a little powerless country. (duh, like greece, portugal, spain, italy, france even ?) And besides, they eat garlic there.

  • I kinda remember that the EU has just passed an european union wide ‘deposit insurance’ guaranteeing savings below 100K. If that measure has indeed been passed this is really an outrage and should actually not be accepted.

I wonder how the public is going to react tomorrow in Spain, Italy, and maybe France. We shall see. (Let’s forget about the reaction of the financial markets for a moment, they just wanna max their profit, no matter what. And the eu is, also, about citizens is it not ?)

Tomorrow is monday, march 18, 2013.

See also, a bit more technical, Cyprus: A Brutal Lesson in RealPolitik. And Schumpeter’s The Cyprus bail-out: Unfair, short-sighted and self-defeating.

— Jeroentje dat heppie fout gedaan, niet teveel van dat soort foutjes maken hoor !
Want je moet binnenkort, na Rutte II, wél verstandige dingen gaan doen ! —

— the banks man ! it’s the banks ! —

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