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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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Quickbeam

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In my case 10% of not very much left is even less than bugger all!

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Quickbeam

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How real is the Daily Express's take on this raid?

Some of it is what I raised yesterday afternoon about confidence.

Yes I know it's a Fleet Street opinion, pinches of salt and all that, but scare opinions have started bank runs on much less before now.

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fourm member

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'Mr Clark’s answer – that the situation in Cyprus was “unique” – will hardly have eliminated the concerns of savers.'

It 'will hardly have eliminated the concerns of savers' because the Express doesn't want those concerns eliminated.

A sensible explanation of why the situation in Cyprus is unique would have been much more useful.

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Quickbeam

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But non the less, a seed has been planted in the non thinking minds of a large readership.

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Flak999

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'Mr Clark’s answer – that the situation in Cyprus was “unique” – will hardly have eliminated the concerns of savers.'

That is the problem, people don't believe that the situation in Cyprus is unique! Stephanie Flanders on the BBC website says:

Nearly everyone involved in the deal for Cyprus hammered out on Saturday now agrees it was a mistake. What we don't know, yet, is how big.

Robert Peston on the same site comments that:

The Cypriot deal sets back the cause of the new global rules for bringing order to banking systems when crisis hits. Apart from anything else, in other eurozone countries where banks are weak, it licenses runs on those banks, as and when a bailout looms.

The action taken by the Cypriot government at the behest of the ECB is nothing short of a disaster, just how big that disaster is remains to be seen. However yesterday whilst in a branch of Santander in Ruislip two of the people in the queue that I was in were there specifically to move their ISA investments to a UK building society even though it was explained to them that Santander UK has full FSCS protection and is in fact a UK bank.

Their confidence had gone, as far as they were concerned Santander is Spanish and to quote one person "they could be next"

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Flak999

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They have realised the mistake they have made, it's all unravelling as I type this. Daily Telegraph

Cyprus central bank chief Panicos Demetriades has warned parliament that the island's banks will lose 10pc of their deposit base within days if the draft bill passes, and urged it to consider extending the levy-free rate all the way up to €100,000, which is the ECB's preference.

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fourm member

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Flak999

Your Ruislip incident probably demonstrates that some people are too stupid to be trusted with money.

But that does demonstrate the difficulty of doing anything to resolve financial problems. Lots of people are too stupid to be trusted with money.

The aspect I find most worrying is that Putin has criticised the move.

A piece in the FT, yesterday, (limited free access if registered) said this deal gave Putin the chance to combat corruption by offering to take the levy for Russian investors in Cyprus, as long as they revealed their identities and explained where the money came from.

Rather than do that Putin has sided with all the Russian investors some of whom, undoubtedly, made their money illegally.

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Flak999

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fourm member

As you say, Putin had the chance but didn't take it. Russia is looking more and more like a state ruled by the Mafia.

From the Telegraph

Some analysts have raised the intriguing and alarming prospect that Russia could threaten Germany's gas supply if the bailout is not dramatically reshaped. Moscow has form here. Gazprom reduced gas supplies to Europe in 2009 during a dispute with an Ukrainian energy company. Europe relies on Russia for 36 percent of its gas supply, a dependency we may hear more about in the coming days.

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fourm member

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Flak999

Politics, politics.

It looks as though Merkel may have been behind the idea of getting the Russians to stump up for the bailout as a way of deflecting criticism at home of another German backed bailout.

I'm scratching around for a reasonable comparison and this isn't it. But, imagine what the Mail would have to say if the UK government gave a grant to Chelsea FC.

The clash arises because Merkel's constituency is made up of ordinary Germans whereas Putin is answerable to the oligarchs, as ordinary Russians don't have a voice.

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Flak999

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These are interesting times we are living through for sure, It does make me wonder how much longer the Euro zone can go on for? The wheels have come off so many times and still the wheezy asthmatic old jalopy of a currency still trundles along.

How much longer can this state of affairs persist before enough is deemed enough?

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