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[Myrkky100]

The thing is, Cyprus has apparently been a haven for shady Russian money for years and that's why the EU wanted investors and depositors to bear some of the burden. Seems that the not-entirely-surprising reaction from regular Cypriots has already caused the government and the EU to backpedal on the savings tax for people with under 100 000€ in the bank and everybody is scrambling to deny that it was originally their idea. I just love it when people making decisions that can ruin whole nations just make shit up as they go along

[Leafsnail]

It's such an unbelievably bad precedent to set.  Suddenly the mattress is looking a lot more attractive for people throughout Europe, and that's really not what you want in a time of economic trouble.

[10ebbor10]

How to create a bank run: Declare you're going to take 7-10% of people's bank savings by tuesday.

Do note however, that the taxed money was frozen from the moment the descision was made. So withdrawing money had no effect.

Still, not really a good precedent/

[Zrk2]

That's pretty crazy. I'd be pissed if they did that to me.

[Owlbread]

The thing is, Cyprus has apparently been a haven for shady Russian money for years and that's why the EU wanted investors and depositors to bear some of the burden. Seems that the not-entirely-surprising reaction from regular Cypriots has already caused the government and the EU to backpedal on the savings tax for people with under 100 000€ in the bank and everybody is scrambling to deny that it was originally their idea. I just love it when people making decisions that can ruin whole nations just make shit up as they go along

Iceland was the same, I hear. Yet people use Iceland regularly as an example of why countries should not have their own currency.

[Zangi]

How to create a bank run: Declare you're going to take 7-10% of people's bank savings by tuesday.

Is it me... or is the leading members of the EU trying really hard to protect themselves by shitkicking their less influential members...  like Greece, Spain and now Cyprus.

[LordSlowpoke]

How to create a bank run: Declare you're going to take 7-10% of people's bank savings by tuesday.

Is it me... or is the leading members of the EU trying really hard to protect themselves by shitkicking their less influential members...  like Greece, Spain and now Cyprus.

Cyprus is pretty much a state ran by means of being a tax haven for various Russians. They did ask for a loan from Russia before turning to the EU, after all, and for good reason. It's not like the ones they want to hit will be hit much anyway - you can just pay a fine of 50 thousand euros and disregard the 7-10%, which will from what I've gathered be paid in Cypriot gas finds (if you're Cypriot, at least) and bank shares. So the money doesn't exactly disappear~

Hell, Germany didn't even have to prop up Cyprus here like they had with Greece and such. It isn't exactly vital to EU structures, but there must be something deeper in it.

[GlyphGryph]

Do note however, that the taxed money was frozen from the moment the descision was made. So withdrawing money had no effect.

Are you sure that's all their going to take?

I imagine that would be the thought going through people's heads. People generally try not to leave their money in a place where it could be stolen, and it's suddenly really obvious that the bank is not a secure place to keep it - more of it, any of it, could disappear at any moment, and there's nothing you could do to stop it and no legal recourse?

You can beat your ass I'd be trying to get every dollar I had out of that bank.

[10ebbor10]

Not really. After all, they don't get any profit for this. A significant part of the loans are scrapped, and new ones are written out, which the core states have to pay for. After all, without the loans, all these countries would've been bankrupt. Also, it's not just the EU, IMF is in it too.

Basically, the core states are forcing the weaker members to keep up with their financial/economical system. Wherether this is a good thing remains to be discussed.

[LordSlowpoke]

While I'm still in this thread,

median wealth in Italy is EUR164,000 (as opposed to Austria's median of around EUR76,000 and mean of around EUR265,000) meaning that in theory Italy has no debt crisis (with net assets at 173% of GDP) - significantly more than the Germans at 124% - "so it would make sense, in Italy a one-time property tax levy," he suggested.

AHAHAHAHAHAHAHAHAHAHA

[10ebbor10]

Speaking of which, why don't we just dig up the Tobin Tax again.

Also, is it me or is that website rather pessimistic/realistic.

[Zangi]

Not really. After all, they don't get any profit for this. A significant part of the loans are scrapped, and new ones are written out, which the core states have to pay for. After all, without the loans, all these countries would've been bankrupt. Also, it's not just the EU, IMF is in it too.

Basically, the core states are forcing the weaker members to keep up with their financial/economical system. Wherether this is a good thing remains to be discussed.

I'm sure Greece is doing pretty well, not being bankrupt and all that... they even got enough to pick up mercenaries as their secret service.

[andrea]

you know, as an italian, I would be fine if they taxed my savings.  If I had the slightest confidence in the ability of our politicians to do anything good with that money.
sadly, they made a point of not being competent

[Leafsnail]

A savings tax strikes me as an awful idea even if it's targeted purely towards people who can definitely afford to pay it.  That's simply because it effectively relies on you surprising people.  So it'll work fine once and then from that day forwards no-one is ever going to trust your banks again.

While I'm still in this thread,

I can't think of any reason to say this other than to cause a run on Italian banks.

[Sheb]

Yeah, and looking at Greece, no one is going to think "Oh, it's okay, we're going to be fine right after". While I can understand the political problems in taking German cash to boil out Russian oligarchs, it's really dumb that the bank's bondholders don't take a cut for exemple.

Also, 6 billions is 25% of Cyprus' GDP. with the EU bail out, we're talking about 70% of GDP. How mismanaged was that place that they suddenly need so much cash?

Also, Italy is actually doing pretty fine. Got a primary Budget surplus, deficit is a meager 2% of GDP (Slower than inflation, so debt is stable as a %age of GDP). Sure, your economy lag, but your finances are sound.