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In a move that could set off new fears of contagion across the euro zone, anxious depositors lined up at cash machines on Saturday in Cyprus to withdraw money hours after European officials in Brussels required that part of a new 10 billion euro bailout must be paid for directly from the bank accounts of ordinary savers.
The move — a first in the three-year-old European financial crisis — revived fears of bank runs elsewhere in the euro zone, especially after a top European official on Saturday declined to rule out similar measures on depositors in countries beyond Cyprus.
Under an emergency deal reached early Saturday in Brussels, a one-time tax of 9.9 percent is to be levied on Cypriot bank deposits of more than 100,000 euros effective Tuesday, hitting wealthy depositors — mostly Russians who have put vast sums into Cyprus banks in recent years. But even deposits under that amount would be taxed at 6.75 percent, meaning that Cyprus’s creditors will be taking money directly from pensioners, workers and regulator depositors to pay off the bailout tab.
“What the deal reflects is that being an unsecured or even secured depositor in euro area banks is not as safe as it used to be,” said Jacob Kirkegaard, an economist and European specialist at the Peterson Institute for International Economics in Washington. “We are in a new world.”
I am starting to believe that governments are purposely trying to destroy any faith there is in the economy so they can continue to keep interest rates at record lows for the foreseeable future.
If you were stupid and short-sighted enough to support the bums who created this shabby economic mess, then you should have to help pay for the damages.
I lived in Cyprus from 2001 until 2004, and I had much of my savings in Cypriot banks for that time. My friend, banking in Cyprus was the Wild, Wild West! In fact, the entire country was flying by the seat of its pants, and no one gave a good crapola. Whenever I tried to discuss the total lunacy and fragility of the situation with Greek Cypriots, they put their fingers in their ears. The whole country was happy to go along for the ride.
Banks were a rodeo...you wouldn't believe it until you saw it with your own eyes. But Russians, and I saw Brits too, sometimes came in to open bank accounts with overnight bags stuffed with cash. One completely scuzzy-looking Brit was stupid enough to dump his suitcase of currency out on the floor to count it in front of the teller, right in front of a bank full of customers and no security. The manager freaked...and it was all scooped up, and then dumped on the floor behind the manager's desk, where the manager and a teller groveled on the floor counting it!!!!!!!!! Banking in Cyprus was sleazoid to the max.
And because no government of any party had a plan for the development of the business sector government service was a sugar teat for those people who couldn't find a job. I once needed a document translated by an official government translator. I went to Lefkosia to the appropriate government agency to hook me up with an approved translator. When I opened the door there were nine women seated at a long table. Each one looked at my request for a second, made a note in a loose-leaf notebook, and handed it one to the next. Finally, after number nine had done exactly the same thing, I was directed to a man sitting at a desk. He looked at my documents, picked up the phone called the official translator for my language and arranged for her to pick up the documents. The nine women at the table were just putting in their time to collect a salary. Nine of them!!!!!!
The irony is that the next day the same man called me to come pick up my documents. "They are done already!?" I said like a total fool. "Oh no," he replied. "She (the official government approved translator) said she can't do them, they are too complicated." The documents were in a language that I learned to a very modest degree of fluency as an elderly adult, and I could have translated them, but you need an offical translator with a license and a seal. This translator whank was unfortunately a not atypical incompetent on the government payroll.
My local post office was a table in the town's community center, which consisted of a lounge and cafe inhabited by seniors. On the wall was a huge poster of Che Guevara with one of his revolutionary slogans in Greek with lots of exclamation points. I used to chuckle, convinced that had ol' Che gotten to Cyprus he would have machine-gunned every single last sleaze-bag Cypriot politician. After the referendum circus in 2004, completely convinced that Cyprus was more of a house of cards than Greece, and that the people were totally willing to play the game with their politicians to the bitter end, I pulled out. Fortunately, getting rid of a new house at a time when Brit expats still thought Cyprus was Heaven's doorstep.
The Greek Cypriots got the governments they voted in, and lived in the society that these morally bankrupt creeps created (along with the Cypriot Orthodox hierarchy, a major player in Cyp politics); therefore, the Cypriot people made this bed they now have to lie in. Who I can feel sorry for is some old pensioners in the hills who are living the past. But most Greek Cypriots are literate and adequately educated, and they were quite happy to chew on the bone of nationalism that their crooked politicos threw to them at every election time, and wink at all the shady and outright illegal shenanigans, which combined with bargain bin tourism and expat residents, was all that was keeping their decrepit economy temporarily afloat.
The totally feckless, corrupt political and economic environment of post-coup and invasion Cyprus was created by a series of democratically elected governments. That puts the responsibility for the mess on the people as much as the politicos. You screw up, you pay up.
LOL - - -
At least the EURO isn't underwritten by "human resources" like the "dollar bill."
What? You didn't read the fine print in FICA / Social Security?
Didn't you know that by participating, you are a "contributor" equally liable on the 16 trillion dollar public debt?
OOPS.
Can't blame the government. No law compels participation. It is 100% voluntary. Voluntary servitude is constitutional, so stop complaining. Get back in line, and wait your turn to be sheared.
So the banking problems in Cyprus are similar to the loose regulations and cavalier over investing that brought down the Icelandic Banks, but worse because it's coupled with a culture of corruption and the Greek propensity for not paying taxes?
Another example of the folly of having a single currency without uniform economic and banking regulations.
Quote:
Originally Posted by kevxu
If you were stupid and short-sighted enough to support the bums who created this shabby economic mess, then you should have to help pay for the damages.
I lived in Cyprus from 2001 until 2004, and I had much of my savings in Cypriot banks for that time. My friend, banking in Cyprus was the Wild, Wild West! In fact, the entire country was flying by the seat of its pants, and no one gave a good crapola. Whenever I tried to discuss the total lunacy and fragility of the situation with Greek Cypriots, they put their fingers in their ears. The whole country was happy to go along for the ride.
Banks were a rodeo...you wouldn't believe it until you saw it with your own eyes. But Russians, and I saw Brits too, sometimes came in to open bank accounts with overnight bags stuffed with cash. One completely scuzzy-looking Brit was stupid enough to dump his suitcase of currency out on the floor to count it in front of the teller, right in front of a bank full of customers and no security. The manager freaked...and it was all scooped up, and then dumped on the floor behind the manager's desk, where the manager and a teller groveled on the floor counting it!!!!!!!!! Banking in Cyprus was sleazoid to the max.
And because no government of any party had a plan for the development of the business sector government service was a sugar teat for those people who couldn't find a job. I once needed a document translated by an official government translator. I went to Lefkosia to the appropriate government agency to hook me up with an approved translator. When I opened the door there were nine women seated at a long table. Each one looked at my request for a second, made a note in a loose-leaf notebook, and handed it one to the next. Finally, after number nine had done exactly the same thing, I was directed to a man sitting at a desk. He looked at my documents, picked up the phone called the official translator for my language and arranged for her to pick up the documents. The nine women at the table were just putting in their time to collect a salary. Nine of them!!!!!!
The irony is that the next day the same man called me to come pick up my documents. "They are done already!?" I said like a total fool. "Oh no," he replied. "She (the official government approved translator) said she can't do them, they are too complicated." The documents were in a language that I learned to a very modest degree of fluency as an elderly adult, and I could have translated them, but you need an offical translator with a license and a seal. This translator whank was unfortunately a not atypical incompetent on the government payroll.
My local post office was a table in the town's community center, which consisted of a lounge and cafe inhabited by seniors. On the wall was a huge poster of Che Guevara with one of his revolutionary slogans in Greek with lots of exclamation points. I used to chuckle, convinced that had ol' Che gotten to Cyprus he would have machine-gunned every single last sleaze-bag Cypriot politician. After the referendum circus in 2004, completely convinced that Cyprus was more of a house of cards than Greece, and that the people were totally willing to play the game with their politicians to the bitter end, I pulled out. Fortunately, getting rid of a new house at a time when Brit expats still thought Cyprus was Heaven's doorstep.
The Greek Cypriots got the governments they voted in, and lived in the society that these morally bankrupt creeps created (along with the Cypriot Orthodox hierarchy, a major player in Cyp politics); therefore, the Cypriot people made this bed they now have to lie in. Who I can feel sorry for is some old pensioners in the hills who are living the past. But most Greek Cypriots are literate and adequately educated, and they were quite happy to chew on the bone of nationalism that their crooked politicos threw to them at every election time, and wink at all the shady and outright illegal shenanigans, which combined with bargain bin tourism and expat residents, was all that was keeping their decrepit economy temporarily afloat.
The totally feckless, corrupt political and economic environment of post-coup and invasion Cyprus was created by a series of democratically elected governments. That puts the responsibility for the mess on the people as much as the politicos. You screw up, you pay up.
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