coming soon to some where near you ...

im not posting a link as its all over the news ...

I know this about reducing debt but could someone explain to me how this won't cause a run on the banks as people try to withdraw all their money and never trust it to a bank again?

http://www.bbc.co.uk/news/uk-21820237

I mean... what?! That's just insane.

Which banks? It's too late to run away from a Cypriot bank, your 6.75% is already gone there. A repeat raid seems unlikely.

It's dreadful for Spanish and Italian banks though, as their customers will no doubt fear the same outcome if either country approaches a bailout. But that's what you get for never making decisions unless there is a crisis, and even then basing your decisions only on what will be easy to sell to the German electorate.

The politicians involved all know perfectly well that this is a self-defeating decision, but they are willing to abandon all reason rather than explain to voters why the good thing (whacking Russian money-launderers for a mere 10% of their illicit wealth) comes at a price that isn't worth paying - fleecing innocents as well; undermining the trust in European banks in general; demonstrating that the Eurozone still has no method or plan for bailouts; and creating an incentive not to deposit money in banks that, without sufficient deposits, will fail and cause their sovereign backers to need a bailout.

I am waiting for the Russian mafia to send hit men with contracts on the government. Cyprus was a big destination of Russian money some of which will be mafia property and they do not take lightly to being "taxed" or robbed, so in time I expect the ministers to be killed, or more likely their families.

Unless I missed something this hasn't happened yet. It still requires the Cypriot parliament to vote on it, a vote that has been delayed until Tuesday at the earliest which is why there were a lot of people trying to withdraw their savings from ATM's over the weekend and why the one bank that id normally open at the weekend closed early.

You normally prefer to predict revolutions and civil war. Now you are invited to comment on a place where those things actually happen from time to time, suddenly you are downgrading to Russian mob hits? Those happen everywhere.

Oh well, at least Rogers hasn't lost his eschatological mojo.

I was under the impression that the tax payable on each account was effectively frozen, and you would only be able to withdraw the remainder even if the ATM does have any cash left in it.

BBC Clickey



If it requires the approval of parliament I had assumed it wasn't quite a done deal unless they've effectively already frozen all of the accounts in Cyprus. Given that people appeared to have managed to empty the ATM's over the weekend suggests that withdrawals were still possible.

Hmm, assuming the DailFail article is correct the levy has been ring fenced and couldn't be withdrawn.

Considering they're doing this to try and stop the fall of the Euro they're doing pretty well to create the level of panic necessary to create proper runs on the banks in several other EuroZone countries and that would be rather unlikely to be good for the situation.

The West is rapidly becoming far more unstable, even if you fail to notice the signs. Things like unemployment benefits are substantial stabilisers in resolving such anger, but those are being dismantled in the UK by the coalition. In the thirties there was a panic that communism might take over in the US. It was that panic that helped the New Deal and the house construction boom with the access to affordable mortgages for many that lead to a rise in home ownership. The theory being that people need a stake in society to keep it going, with millions without a job and home they were likely to join any movement that would eventually overthrow the current government. Yet in the US the fall in home ownership is continuing even as house prices there are recovering.

Democracies are a lot more stable because of the ability to get rid of incompetents. Though even though the Tories will get booted out at the next election, an incoming Labour government will have little success in rebuilding the economy. Look at the rise of extremist parties through out Europe. Golden Dawn in Greece, Jobbik in Hungary and UKIP or BNP in the UK. All are to the right and some further to the right than others. Though that happened in Spain Italy and Germany in the thirties. In Germany they were elected. In Spain and Portugal now people are openly discussing a return to a dictatorship because of the corruption of the parties. Greece could also return to military rule. The signs of further trouble are all around if you look. The anti-semitism in Hungary and the attacks on immigrants in Spain and Greece are already happening.

In the article it mentioned that the Cypriots were not very militant but they may get pushed to a point where they are. Even in Greece the middle classes are getting militant. So while the primers for revolutions exist then the risk of such an event are high. So I think that until elections fail to bring stability they will be stable enough to avoid any revolt, though if the EU decides to eject Greece or any of the Eurozone periphery then possibly afterwards any of them could revolt. Look at the rise of Sinn Fein in Ireland, yet most Irish have little empathy with them.

What is happening in North Africa is that the problems are still there and further troubles could erupt in Tunisia and Egypt again. So every nation will deal with it in its own way. The Russian mob use Cyprus as their banks of choice and they will probably not handle this well. While many will simply transfer their money out of the country there will be a bank run because of this and the banks will need emergency funding from the ECB. Will they get it? is another matter. If you have been paying attention the monthly export of money from Spain to the UK has been something like €40 billion a month for the last year or so. It has been a silent run on the Spanish banks. It is also happening to Italy and I think shortly France. What this will do is turn Cyprus into a cash economy and destroy the ability to tax people.

One off my arse. Now it's been done once it can be done again. So savers in Ireland, Greece, Italy etc will be moving their savings to foreign (eg. German) banks which will cause even more problems in their own countries. This wasn't thought out well at all.

No it isn't. They're there because they've been ordered to be there. Why should they lose out? Brits who've chosen to emigrate there on the other hand.....

all the ingredients are now in the mix
it only takes someone (anyone) to bake the pie ...

No no, I mean the tax itself! It'll achieve next to fcuk all and sows even more distrust in the overall system.