Cyprus promotes a saver mentality

[Dauphin]

http://www.ft.com/cms/s/0/33fb34b4-8df8-11e2-9d6b-00144feabdc0.html#axzz2Nj9P67Vk

International lenders agreed to a €10bn bailout of Cyprus early on Saturday morning after 10 hours of fraught negotiations, which included convincing Nicosia to seize €5.8bn from Cypriot bank deposits to help pay for the rescue, a first for any eurozone bailout.

This will work out well.

Apparently some were pushing for a complete seizure of all deposits over €100,000.

[Sava]

How about paste the article? Bull**** site wants me to subscribe.

[Dauphin]

Just for you, the Beeb version

http://www.bbc.co.uk/news/world-europe-21814325

Shock in Cyprus as savers face bailout levy

People in Cyprus have reacted with shock to news of a one-off levy of up to 10% on savings as part of a 10bn-euro (£8.7bn; $13bn) bailout agreed in Brussels.

Savers could be seen queuing at cash machines amid resentment at the charge.

The deal reached with euro partners and the IMF marks a radical departure from previous international aid packages.

President Nicos Anastasiades defended it as a "painful" step, taken to avoid a disorderly bankruptcy.

The Cypriot leader, who was elected last month on a promise to tackle the country's debt crisis, will address the nation on Sunday.

Lenders are said to be gambling that the risk of a bigger banking crisis elsewhere in the eurozone has receded.

While Cyprus may be one of the eurozone's tiniest economies - its third-smallest - there could be serious repercussions for other financially over-stretched economies, such as those of Spain and Italy, Robert Peston writes.

The point of the levy is as a caution to lenders to banks that they should take care where they place their funds, and avoid banks that overstretch themselves - as Cypriot banks did, he adds.

Cyprus is the fifth country after Greece, the Republic of Ireland, Portugal and Spain to turn to the eurozone for financial help during the region's debt crisis.

The country has been in financial difficulties since the collapse of the Greek economy, where Cypriot banks had huge investments.

'Robbery'

People in Cyprus with less than 100,000 euros in their accounts will have to pay a one-time tax of 6.75%, Eurozone officials said.

Those with greater sums will lose 9.9%.

Depositors will be compensated with the equivalent amount in shares in their banks.

Reports suggest that depositors will be able to access all of their money except the amount set by the levy.

The levy itself will not take effect until Tuesday, following a public holiday, but action is being taken to control electronic money transfers over the weekend.

Co-operative banks, the only ones open in Cyprus on Saturday, closed after people started queuing to withdraw their money.

"This is robbery and we must get the EU to stop this," Alan, a British expatriate saver in Cyprus, told BBC News.

"We retire and bring our savings to a bank in Cyprus and they can just take our money away without permission and then say we have shares in a bankrupt bank."

Maria Zembyla, from Nicosia, said the levy would make a "big dent" in her family's savings and "erode the investor confidence".

"Russians that currently keep the economy afloat will leave the country along with their money," she added.

According to Reuters news agency, almost half of the depositors in Cyprus are believed to be non-resident Russians.

Russian money

There has also been speculation that Russia could help finance the bailout by extending a 2.5bn-euro loan already made to Cyprus.

Cyprus Finance Minister Michael Sarris will travel to Moscow for meetings on Monday, reports say.

"My understanding is that the Russian government is ready to make a contribution with an extension of the loan and a reduction of the interest rate," said the EU's top economic official, Olli Rehn.

European regulators and politicians are convinced that a vast amount of cash in Cypriot banks belongs to Russian money launderers, our business editor writes.

Few German politicians would vote for a Cyprus rescue that simultaneously rescued these launderers so the only way to make the bailout palatable to the German parliament was to tax the launderers, too, he says.

[Krill]

Pffh, not registering to read the FT website.

[onodera]

Why just people? Why not all of those offshore companies registered in Cyprus?

[Sava]

I agree with onodera. Go for the companies. Also, 100,000 seems awfully low. The lowest I would be comfortable with is 1,000,000. However, I feel no sympathy for ex-pats moving to offshore tax havens. Screw them.

As usual, I wish all involved to die in a bus accident. There's no good guy in this story... only *******s screwing over other *******s.

[Dauphin]

I agree with onodera. Go for the companies. Also, 100,000 seems awfully low. The lowest I would be comfortable with is 1,000,000. However, I feel no sympathy for ex-pats moving to offshore tax havens. Screw them.

As usual, I wish all involved to die in a bus accident. There's no good guy in this story... only *******s screwing over other *******s.

All savers are affected, including those with just a few thousand €€€s.

[Sava]

Did Cyprus have good interest rates?
The tax, while punitive, doesn't seem that horrible. Instead of being mad at the government, maybe savers should get pissed at the banks for ****ing up the economy.

The best possible action any country could take is to execute everyone who works in the financial industry... except, of course, for the secretaries and janitors and whatnot.

[Uncle Sparky]

I'm sure Cyprus will be as vigorous meting out justice to the CFOs and CEOs responsible for breasking their banking system as the US has been. I wouldn't be surprised if the heads of Cyprus' bank have their money 'offshore'...

[Sava]

Where do Cyprians (?) offshore their money? Is there an even ****tier little island country in the Mediterranean

[OneFootInTheGrave]

Pure idiocy to renegade on the insurance. That could set a precedent, money will (should) move out of the banks and into the mattresses or perhaps Switzeland or US. This is a braindead move.

[Aeson]

What would the depositors get if the banks were allow to fail?

[Dinner]

When Argentina did this it just meant people stopped depositing into banks and started stuff money under the mattress of their bed. I'm sure that is Dauphin's point but it never does end well. People just don't like having their life's savings stolen from them even if it is for the good of the nation.

Hell, Cyprus is a fake nation any way. The only reason it even exists is because syphilitic Turks invaded in the 1970's when most of the people wanted to join the Greek Republic anyway. If that hadn't happened the island would now be safely part of Greece... Meaning it would now also be penniless anyway and the economy would still be in the ****ter.

Oh, well, at least Greeks are still a bunch of tax cheater welfare cases who don't both to pay their taxes. The good news is next election the Greek government will once again, as always, stop collecting taxes even if it causes a national default because no one wants to vote for the taxman and every good Greek knows to win elections you must stop collecting taxes. It's amazing those people invented any thing given what worthless sacks of **** they all are.

[regexcellent]

Yes Argentina is a shining example of good government management of the economy.

[Alexander's Horse]