Bailout tax shock for Cyprus savers

It seems that if you live in any other country other then the Germany a chunk of your money and maybe property is going to be sliced out.



This is so over the top when I tell people about it they can not even believe it is true. Who will the next cruel joke be played on the Italians? Maybe the Spanish. If I lived in these counties I would not keep my money in a bank anymore it is to much of a risk. It will only be a matter of time and it will happen right before the weekend.



They are actually playing you for fools. And TPTB are sitting back and laughing all the way to the bank.

Oh yeah, now "we" Germans are the evil in Europe again´... *rolleyes*

I am really concerned about the situation in Cyprus, it is outright theft from the banksters and government and I have a feeling in my guts, that this is only the start. Thinking about the hundreds of billions of € german private savings, this is a juicy target for the next move. Just call it "€ Save Tax", "inevitable", "necessary", "without alternative" and the ordinary people in Germany will applaud it.
I don't know why and how everyone here got so stupid, but news from Cyprus aren't stirring the pot like they should do

Now tell me because I can't find out myself.

Are they taking 10% from just Mum and Dad investors or are they also taking 10% of the holdings on say the oil companies or the insurance companies. I bet they are not.

Rip it off the Mums and Dads.

P

I don't see what the big shock is. Cyprus, and other southern countries in the EU are all drowning in debt. They supposed to be paying to the EU all this time. When the opportunity presented itself, it's like.... "sure, we'll join the EU!!"... So for 12 years or so, they enjoy all the bene's of being in the EU- trade barriers are eliminated, immigration to other EU countries is free and easy, other EU countries buy all kinds of vacation property in their warm climate....

Now that it's time for Cyprus to pay, they find that don't have the money. So what happens? Germany bails them out with loans... and another loan, and another loan... Interestingly, I didn't hear an uproar from Cyprus when Germany was doing that.

And now guess what? They don't have the money to pay Germany back or pay their EU club dues... Is the 10% 'withdrawal' Germany's fault? Is it the EUs fault?

It's only 10%. People need to calm the #@# down. I don't see it was being that big of a deal, at least right now.
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p.s. I'm not a EU citizen or German... just calling the shots like I see them.

I've come across a few differences in European and US banking that should be mentioned. First there is no European equivalent to FDIC.
Second, the capital structure seems to be different. In the US capital structure goes in order of being wiped out first:equity, bondholders, depositors. This means when a US bank fails stockholders are wiped out first, then creditors (bondholders), and finally depositors over FDIC insurance limits. I've read that in Europe that bondholders and depositors are equal in terms of capital structure. That being said, there is a precedent in the US for certain politically connected bondholders to be treated more equally than others in a bankruptcy (the way the UAW was with GM).

Could something like this happen in the US? Absolutely, look at the pile of assets siting in IRAs and 401ks. There have already been some rumblings about "requiring" those types of accounts to invest in treasuries. But more likely the FED would use it's ability to print money to accomplish the same wealth transfer through higher inflation. The digits in your accounts would remain the same but the purchasing power would be 3-10% less due to the inflation.

How would I react if I were in Europe? If I were in Germany or Scandinavia, I'd note the event and watch for signs in my banking institutions, and probably pull a little cash out just to have some cash for emergencies. However, if I were in Greece, Spain, Portugal, Ireland, or Italy I'd be pulling every cent out today, and trying to convince everyone I know to do the same.

If the Banksters get away with this in Cyprus, depositors in Greece, Spain, and Italy are surely next.

reply to post by MarkJS





As I understand it the EU is supposed to be for the benefit of all member states?

And in that respect members are only admitted when they can meet certain criteria and then

'all are on a level playing field?'


As in all idealistic conceptions there are always some more equal than others

Germany?? France??

re the EU:
a single currency just can't work
it was never designed to last by the unelected folks at the top

as a method of theft though its an awesome plan
just like inflation, derivitives, oil, drugs, pharma, etc though its now with this cash claw the theft is totally blatant.

in the interest of comparison: say how's Iceland doing these days?

reply to post by Talliostro


I completely agree, why is it always "evil" Germany?

People seem to be missing the fact that this has the potential to affect German savers as much as those elsewhere in Europe. At the end of the day, European Banks are completely over exposed to the debt crisis in Europe and it is worse when you consider the blanket bond buying of the ECB (principally through German banks). If this works in Cyprus, the potential is there for other banks to look and say "hmm, we should give that a go here too".

Germany is not the bad guy in all of this unless these days being a success qualifies you as the bad guys. The real bad guys are the tiny amount of Political Elite in every country in the EU that has pushed various policies through that have left us where we are today. Still, i guess blaming the boogey men (Germany) is simpler for many than blaming the faceless entities that caused this mess.

what he said^
MF Gobal anyone?

Apparently the banks are staying shut till Thursday now......how are people there going to eat let alone anything else!!
Rainbows
Jane

Originally posted by angelchemuel
Apparently the banks are staying shut till Thursday now......how are people there going to eat let alone anything else!!
Rainbows
Jane

Notice they didn't say which Thursday...

That sure seems like a ripoff to me.

My wife and I have always been pretty frugal. We do have a decent savings balance. I would hate to be financially punished for my lifestyle.

That just seems wrong to me.

I think that it was Margret Thacher who said "Socialism works fine until you run out of other people's money"

Well, they've run out of money so they are just taking money from those who have it. Think people will stop putting their money in the bank?

Well guys, I have bad news for you...Cyprus is only the beginning:

German Commerzbank Suggests Wealth Tax In Italy Next

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. "A tax rate of 15% on financial assets would probably be enough to push the Italian government debt to below the critical level of 100% of gross domestic product." So there you have it, the 'new deal' in Europe, as we warned, is 'wealth taxes' and testing the "capacity of Cypriots" appears to be the strawman on what the public will take before social unrest becomes intolerable

www.zerohedge.com...

Cyprus pushed the bank hoilday to thursday. Something went wrong and whatever they were doing just died on the Operating table. I think there is going to major panic starting march 25th.

reply to post by sk8ter
cose the banks are opening on thursday again ..i'll think they need moore time to reprogramm the banking system.to prevent taking to much money from the banks... guess they restrickt to at most 200 euro to withdraw....

Originally posted by MarkJS
I don't see what the big shock is. Cyprus, and other southern countries in the EU are all drowning in debt. They supposed to be paying to the EU all this time. When the opportunity presented itself, it's like.... "sure, we'll join the EU!!"... So for 12 years or so, they enjoy all the bene's of being in the EU- trade barriers are eliminated, immigration to other EU countries is free and easy, other EU countries buy all kinds of vacation property in their warm climate....

Now that it's time for Cyprus to pay, they find that don't have the money. So what happens? Germany bails them out with loans... and another loan, and another loan... Interestingly, I didn't hear an uproar from Cyprus when Germany was doing that.

And now guess what? They don't have the money to pay Germany back or pay their EU club dues... Is the 10% 'withdrawal' Germany's fault? Is it the EUs fault?

It's only 10%. People need to calm the #@# down. I don't see it was being that big of a deal, at least right now.
--------------------------------------------------------
p.s. I'm not a EU citizen or German... just calling the shots like I see them.

edit on 18/3/2013 by MarkJS because: (no reason given)

You don't think this is a big deal? Excuse me, this is unprecedented! The only time this sort of thing happens is before major wars and great depressions! But this system needs to collapse - it's dead, it doesn't work and people are sick of it. Let it die so we can finally create something that benefits all of us.

Banks Holiday in Cyprus 'till Thursday

I believe the bank deposits upto 100,000 Euros each are insured by the ECB. If true, that means even if the bailout doesn't work everyone's money upto 100,000 Euros in each account is safe. Which means the only account holders who can justifiably be expected to contribute to the Cyprus government's share of the bail out as demanded by the Troika are those with money in excess of 100,000 Euros and only for the amount in excess of that.

Perhaps the current announcement is simply a negotiating tactic. Already the numbers have been revised from 6.7% (for below 100,000 accounts) and 9.9% (for above 100,000 accounts) proposed initially to 3% and 12.5% respectively. Further revisions can be expected and perhaps will be 0% for all desposits to upto 100,000 and a certain percentage for all the amounts above that. That would still be unpleasant for the large deposit holders but better than the alternative of losing the entire amount in excess of 100,000 should the banks collapse.

Its theft, they can call it whatever they want, its theft and you know why this hasn't erupted in to riots? It's due to it being theft from hard working people who are too trampled on and totally demoralised to fight back. If this had happened in an African country, Middle Eastern or Asian even, the country would be burning and the banks ransacked. All the people of Europe, regardless of their country, have been stamped on so hard by these filthy disgusting socialist criminals, they have been nailed in to a system that they cannot exist without, they have been smashed over the head until they are on their knees hating themselves and for the concept of one state, totally devoid of democracy and totally devoid of individual freedom.

If we pull out from banks altogether, they charge us with money laundering, we can hardly get employment now without a bank, we can't pay bills without a bank, we can't live without a bank and if we try to live off the system and off the land it self, here in Britain, there are a million and one laws to stop you.

Britain is in a sorry state, but thank every day that passes that we never got ourselves nailed to the Euro. For other Euro countries be warned, what happens to one, will happen to all.

My sig says it all and those words were spoken in 1914!

It's interesting isn't it, because *they* know that once people even suspect it's going to happen they'll go and try to withdraw all of their money from the banks, and a run on the bank will severely devalue, if not collapse the currency.

The stock market will fall, etc, further decimating peoples wealth since it's the purchasing power of their money that is really effected.

It's like economic warfare.

They'll be confiscating your gold for $25 per ounce next, then offering to sell it back to you at $35 per ounce a year or so later (that's a reference to the gold grab of the 30's - I know gold is worth far more than tht these days - before anyone points that out).

Originally posted by jefwane
I've come across a few differences in European and US banking that should be mentioned. First there is no European equivalent to FDIC.
Second, the capital structure seems to be different. In the US capital structure goes in order of being wiped out first:equity, bondholders, depositors. This means when a US bank fails stockholders are wiped out first, then creditors (bondholders), and finally depositors over FDIC insurance limits. I've read that in Europe that bondholders and depositors are equal in terms of capital structure. That being said, there is a precedent in the US for certain politically connected bondholders to be treated more equally than others in a bankruptcy (the way the UAW was with GM).

Could something like this happen in the US? Absolutely, look at the pile of assets siting in IRAs and 401ks. There have already been some rumblings about "requiring" those types of accounts to invest in treasuries. But more likely the FED would use it's ability to print money to accomplish the same wealth transfer through higher inflation. The digits in your accounts would remain the same but the purchasing power would be 3-10% less due to the inflation.

How would I react if I were in Europe? If I were in Germany or Scandinavia, I'd note the event and watch for signs in my banking institutions, and probably pull a little cash out just to have some cash for emergencies. However, if I were in Greece, Spain, Portugal, Ireland, or Italy I'd be pulling every cent out today, and trying to convince everyone I know to do the same.

If the Banksters get away with this in Cyprus, depositors in Greece, Spain, and Italy are surely next.

Acutally EU banking regulations require deposit insurance. It is a little bit different in each EU country but in Cyprus was 100,000 Euros. Other than that we agree on a lot. If they get away with it we will see it again. Very bad scenario. If my money was in Euros I would pull it -- no doubt in my mind. My paper asset is USD and I still might rearrange.