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Major shock for Cypriots


hssutton

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anywhere else in the world this would be called theft

In the EU it's called a bail out levy.

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%.

EU's latest bailout rules for Cyprus

I wonder what savers in Italy, Spain and Portugal think about this?

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Flak999

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john bunyan

"In the UK the first £85,000 per institution (ie all brands within a group) is safe an guaranteed. Should an institution fail, the balance is at risk. Osborne can make tax changes but cannot act as you say - he would soon be over ruled by judicial revue."

That is the whole point though, no institution has failed! The Cypriot government has made this measure a tax so as to deliberately fall outside of the EU deposit guarantee scheme.

This quote from the BBC website states:

"Sharon Bowles, who chairs the European Parliament's Economic and Monetary Affairs Committee is appalled. "This grabbing of ordinary depositors's money is billed as a tax," she said, "so as to try and circumvent the EU's deposit guarantee laws. It robs smaller investors of the protection they were promised."

If Osborne was to do the same thing and make any raid on depositors in the UK a tax, our guarantee scheme would not apply! Now, until today this scenario would have seemed impossible to consider, but now the genie is out of the bottle in Cyprus who is to say what could be attempted here?

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spider9

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Flak999

Following your worry to it's rightful conclusion, you say OUR government could do this to us in the future - so why on earth are you spouting election propaganda from UKIP? If only our elected government could do this, what difference would it make to have UKIP in charge?

This problem in Cyprus is being dictated by the EMU bailout conditions, which we are not members of anyway, and so any threat to rob our accounts(according to you) would only be from our own government - which presumably we elect, not the EMU??

Your logic in this matter baffles me!

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spuds

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Well I am not sure if I am reading this right, but it would appear that there is already a scapegoat for all this, and that is the Russians for investing in the countries banking system?.

The other point I find confusing is the statement made in that report. "Depositors will be compensated with the equivalent amount in shares in their bank". Does this mean if their bank goes bust, so do they. Or will it have a similar bearing as to the British taxpayers shares and refunds after that bail-out in the UK banking system (let's not mention business as usual or recent bonuses).

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Flak999

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spider9

Don't be baffled, it's not that hard to grasp surely? It's my belief that we would be better off out of the EU, the only UK party advocating leaving the EU is UKIP. (still with me?)

It is my belief that closer integration in the EU leads inevitably to what we are witnessing in Cyprus, ergo I think we would be better off outside the EU. The Cypriot people elected their Government but were not told that said government were intending to relieve them of between 6.9% and 10% of their savings at the behest of the IMF and the ECB.

They are not unnaturally rather upset about this, yet another example of unelected EU technocrats dictating policy to sovereign governments. I know we are not in the EMU and therefore this does not affect us at the moment. What I am saying is now that this particular rubicon has been crossed what is to stop a current or future UK Government attempting the same thing?

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Grey Goo

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You may well find that many of them owe more than that in back taxes they have evaded over the years.

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fourm member

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spider9

'Your logic in this matter baffles me!'

I'm surprised you didn't pick up Flak999's point that all Cyprus has to do is leave the EU and devalue its currency and everything will be fine with no harm done to savers.

He, clearly, hasn't looked at some of the problems encountered in South America by countries doing that sort of thing.

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john bunyan

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"all Cyprus has to do is leave the EU and devalue its currency and everything will be fine with no harm done to savers."

We have never been in the Eurozone and our currency devaluation has not solved our debt crisis. Only when governments income is equal to or a bit above expenditure will that happen and Labour, the Coalition, nor, I suspect, UKIP have the will to do it. Savers here have been hit by the devaluation. I brought Euros back too early after working in the Eurozone for 10 years - wish I had left it there.

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Flak999

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fourm member

There is no magic bullet to get countries out of the fiscal mess that they are in. I'm not an economist and don't pretend to be one, but the Cypriot people were not warned that this is what their Government was intending, and it is a very drastic step to take. If the populations of Spain and Italy take fright at this and start removing all of their savings from their banks due to the worry of this measure being inflicted on them what will happen?

It is my belief that the EU and monetary union experiments have spectacularly failed and we are now witnessing the consequences. You said yesterday that all it would take for this to happen here would be for a change in the law

"Er, it's called taxation."

Now this bridge has been crossed, why would they not consider it?

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spider9

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Flak999

*" It's my belief that we would be better off out of the EU, the only UK party advocating leaving the EU is UKIP. (still with me?)"*

The reduction of your argument to such childish terms as "still with me?" does you little credit, since it is clearly obvious with everything you post on this subject that you really do not understand differences in EU and EMU - but will happily swallow any UKIP propaganda - so I will retire and leave you to your fantasies.

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fourm member

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Flak999

Do the arithmetic on the effect of even 10% inflation on the value of savings and you'll see that this levy is the cheaper choice if the alternative is to leave the EU and devalue.

Then, whatever happens, DON'T do it for 20% or 30% inflation because the shock could be harmful.

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