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Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsEurope Braces for Fresh Turmoil With Cyprus Deposit Levy
(Bloomberg) Europe braced for renewed turmoil as outrage in Cyprus over an unprecedented levy on bank deposits threatened to derail the nations bailout and spark a new round in the regions debt crisis. The euro tumbled.
Cypriot President Nicos Anastasiades, who bowed to demands by euro-area finance ministers to raise 5.8 billion euros ($7.6 billion) by taking a piece of every bank account in Cyprus, addressed the nation to seek support for the tax. He delayed a vote on the measure in parliament until tomorrow amid talks to restructure the levy.
The levy is a worrying precedent with potentially systemic consequences if depositors in other periphery countries fear a similar treatment in the future, Joachim Fels, chief economist at Morgan Stanley in London, wrote in a client note.
Scenes of Cypriots lining up at cash machines raised the specter of capital flight elsewhere and threatened to disrupt a market calm that settled over the 17-member bloc since the ECBs pledge in September to backstop troubled nations debt. With no government in Italy, Spain in the throes of a political scandal and Greece struggling to meet the terms of its own bailout, more turmoil could hamper efforts to end the crisis. .................(more)
The complete piece is at: http://www.bloomberg.com/news/2013-03-17/europe-braces-for-renewed-turmoil-as-cyprus-deposit-levy-at-risk.html
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Europe Braces for Fresh Turmoil With Cyprus Deposit Levy (Original Post)
marmar
Mar 2013
OP
Trillo
(9,154 posts)1. A rather big story.
"The bank tax was the alternative to imposing losses on investors in a so-called bail-in, a step opposed by the Cypriot government, the European Commission and the ECB, German Finance Minister Wolfgang Schaeuble said on ARD television last night.
...
"Jeroen Dijsselbloem of the Netherlands, who leads the group of euro-area finance ministers, sought to highlight the rescue packages unique measures that address the exceptional nature of Cyprus. Its banking systems assets are about five times the size of the economy. Instead of targeting the countrys wealthiest depositors, which include Russian billionaires, the tax also stings ordinary savers.
Benton D Struckcheon
(2,347 posts)4. Dumb
Instead of targeting the countrys wealthiest depositors, which include Russian billionaires, the tax also stings ordinary savers.
That has got to be the stupidest thing I've heard of coming out of Europe, and that's against some pretty stiff competition. It's like these guys are deliberately wanting to ruin themselves and then everyone else as well.
Every time things calm down, they find a way to pull another circular firing squad.
That has got to be the stupidest thing I've heard of coming out of Europe, and that's against some pretty stiff competition. It's like these guys are deliberately wanting to ruin themselves and then everyone else as well.
Every time things calm down, they find a way to pull another circular firing squad.
Berlum
(7,044 posts)2. Oh my...
Glimmer of Hope
(5,823 posts)3. Market futures look ugly:
Benton D Struckcheon
(2,347 posts)5. Funniest take on this debacle
To catch you up, in case you've spent the day sleep-watching college hoops while occasionally brushing the Cheeto dust off your stomach, on Saturday morning the approximately one million citizens and feral cats of the island of Cyprus awoke to shocking news. They were informed that all bank accounts were to receive some kind of confiscatory tax as part of a last-minute bailout orchestrated by the joint euro solidarity task force.
The leader of Cyprus - a person who goes by the name "Anistasiades" so I'm concluding it's a stripper - had cut a deal with the German Fourth Reich so that bondholders and creditors of the banks would remain whole while citizens and foreign money-launderers with deposits would take "a haircut." No one is immune, even those with deposits at the handful of "well-managed" Cypriot banks. This is a system-wide bailout (or bail-in) and everyone gets to share in the pain. Except the Global One Percenters who will receive no such impairment on their investments in these banks.
The leader of Cyprus - a person who goes by the name "Anistasiades" so I'm concluding it's a stripper - had cut a deal with the German Fourth Reich so that bondholders and creditors of the banks would remain whole while citizens and foreign money-launderers with deposits would take "a haircut." No one is immune, even those with deposits at the handful of "well-managed" Cypriot banks. This is a system-wide bailout (or bail-in) and everyone gets to share in the pain. Except the Global One Percenters who will receive no such impairment on their investments in these banks.
More good stuff here: http://www.thereformedbroker.com/2013/03/17/fckin-europe-again/
Egalitarian Thug
(12,448 posts)6. Anyone want to take bets on a Monday morning bank run? n/t