{"id":30337,"date":"2013-03-18T13:26:13","date_gmt":"2013-03-18T12:26:13","guid":{"rendered":"http:\/\/www.commondreams.org\/headline\/2013\/03\/18"},"modified":"2013-03-18T13:26:13","modified_gmt":"2013-03-18T12:26:13","slug":"cyprus-revolts-following-troika-demand-to-seize-individual-savings","status":"publish","type":"post","link":"http:\/\/rinf.com\/alt-news\/breaking-news\/cyprus-revolts-following-troika-demand-to-seize-individual-savings\/","title":{"rendered":"Cyprus Revolts Following Troika Demand to Seize Individual Savings"},"content":{"rendered":"
\n

The people of Cyprus were in continued uproar Monday following news over the weekend that the country’s ruling government and finance ministers signaled willingness to impose a tax on individual saving accounts in order to secure a $10 billion bailout package from Europe’s financial “Troika” – the European Commission, the European Central Bank and the International Monetary Fund.<\/p>\n

\"\"Account-holders withdraw money from a cash machine in the Cyprus capital, Nicosia. (Photograph: Barbara Laborde\/AFP\/Getty Images)<\/span><\/span> As the Cyprus Mail<\/em> explains<\/a>, “Under the terms of a deal brokered with euro zone finance ministers on Friday, Cypriot authorities were to impose a 6.7 per cent tax on bank deposits under 100,000 euros and 9.9. per cent on deposits exceeding 100,000 euros.”<\/p>\n

The news caused panic over the weekend, with many scrambling to ATMs (the banks are closed until Tuesday) trying to withdraw as much of their savings as possible.<\/p>\n

The deal, however, still needs approval of parliament and an emergency meeting of ministers was being held on Monday.<\/p>\n

Resistance to the plan among leftist parties in the country was critical and fierce.<\/p>\n

“Essentially parliament is called to legalise a decision to rob depositors blind, against every written and unwritten law,” said Yiannakis<\/span> Omirou<\/span>, speaker of parliament and head of socialist EDEK party.<\/span> “We refuse to subscribe to this.”<\/p>\n

As Al-Jazeera<\/em> reports<\/a>:<\/p>\n

\n

Faced with a growing public backlash, Cypriot finance ministry officials began discussions with lenders on Sunday to lessen the blow for smaller savers.<\/p>\n

A source close to the consultations told the Reuters news agency that authorities were hoping to cut the tax band for smaller savers with less than 100,000 euros to three percent from 6.7 percent.<\/p>\n

The rate for deposits above that would then be increased to 12.5 percent from 9.9 percent.<\/p>\n<\/blockquote>\n

Described as a “take it or leave it” ultimatum given by the Troika to the Cypriot government, Guardian<\/em> economy columnist Michael Burke said<\/a> Europeans were looking “on in horror” at the potential raid on taxpayers’ bank account.<\/p>\n

“It’s now become clear,” wrote Burke, “the threat to European savers and banks isn’t anti-austerity parties but the Troika.”<\/p>\n

The Cyprus Mail<\/em> reports<\/a> the reaction from other parties on the left who oppose the plan:<\/p>\n

\n

AKEL leader Andros Kyprianou described Cyprus\u2019 treatment by the troika as \u201cvindictive and neo-colonial,\u201d adding that his party would discuss proposing the island\u2019s exit from the eurozone.<\/p>\n

\u201cThey are attempting to impose their political options on Cyprus, leading out country and people to conditions that are similar to those in other countries of the European south,\u201d Kyprianou said. […]<\/p>\n

Demetris Syllouris, the chairman of EVROKO, said the government would not have his support on the matter.<\/p>\n

\u201cIf they have killed us once it does not matter if they kill us a second time. This is my reaction,\u201d he said.<\/p>\n

The Green party suggested that the measures included in the decision did not ensure the salvation of the economy.<\/p>\n

\u201cOn the contrary, the consequences on common people and workers are expected to be tough, adding to the trials this people is already going through,\u201d the Greens said.<\/p>\n<\/blockquote>\n

\u201cNeither the unprecedented and catastrophic measures would be tolerated nor the humiliation of the Republic of Cyprus and its people,\u201d the EDEK said in a statement.<\/p>\n

And Reuters<\/em> notes<\/a>:<\/p>\n

\n

Approval in Cyprus’ fractious 56-member parliament is far from a given: no party has an absolute majority and three parties say outright they will not back the tax. A vote initially planned for Sunday was rescheduled to give more time to build a consensus.<\/p>\n<\/blockquote>\n

Responding to the news on his blog, Paul Krugman writes<\/a>:<\/p>\n

\n

OK, I didn\u2019t see that one coming. With all the problems in Greece, Italy, Spain, and Portugal I wasn\u2019t watching Cyprus. But that\u2019s where the big euro news is this weekend; in return for a bailout, Cyprus is supposed to impose a large haircut<\/a> \u2013 that is, loss \u2013 on all depositors in its banks.<\/p>\n

You can sort of see why they\u2019re doing this: Cyprus is a money haven, especially for the assets of Russian beeznessmen; this means that it has a hugely oversized banking sector (think Iceland) and that a haircut-free bailout would be seen as a bailout, not just of Cyprus, but of Russians of, let\u2019s say, uncertain probity and moral character. (I think it\u2019s interesting that Mohamed El-Erian<\/a> manages to write about this thing, fairly reasonably, without so much as mentioning the Russian thing.)<\/p>\n

The big problem, however, is that it\u2019s not just large foreign deposits that are taking a haircut; the haircut on small domestic deposits is a bit smaller, but still substantial. It\u2019s as if the Europeans are holding up a neon sign, written in Greek and Italian, saying \u201ctime to stage a run on your banks!\u201d<\/p>\n

Tomorrow and the days immediately following should be very interesting.<\/p>\n<\/blockquote>\n

__________________________________<\/p>\n

This work is licensed under a Creative Commons Attribution-Share Alike 3.0 License<\/p>\n<\/div>\n

<\/p>\n","protected":false},"excerpt":{"rendered":"

\n

The people of Cyprus were in continued uproar Monday following news over the weekend that the country’s ruling government and finance ministers signaled willingness to impose a tax on individual saving accounts in order to secure a $10 billion bailout package from Europe’s financial “Troika” – the European Commission, the European Central Bank and the International Monetary Fund.<\/p>\n

\"\"Account-holders withdraw money from a cash machine in the Cyprus capital, Nicosia. (Photograph: Barbara Laborde\/AFP\/Getty Images)<\/span><\/span> As the Cyprus Mail<\/em> explains<\/a>, “Under the terms of a deal brokered with euro zone finance ministers on Friday, Cypriot authorities were to impose a 6.7 per cent tax on bank deposits under 100,000 euros and 9.9. per cent on deposits exceeding 100,000 euros.”<\/p>\n

The news caused panic over the weekend, with many scrambling to ATMs (the banks are closed until Tuesday) trying to withdraw as much of their savings as possible.<\/p>\n

The deal, however, still needs approval of parliament and an emergency meeting of ministers was being held on Monday.<\/p>\n

Resistance to the plan among leftist parties in the country was critical and fierce.<\/p>\n

“Essentially parliament is called to legalise a decision to rob depositors blind, against every written and unwritten law,” said Yiannakis<\/span> Omirou<\/span>, speaker of parliament and head of socialist EDEK party.<\/span> “We refuse to subscribe to this.”<\/p>\n

As Al-Jazeera<\/em> reports<\/a>:<\/p>\n

\n

Faced with a growing public backlash, Cypriot finance ministry officials began discussions with lenders on Sunday to lessen the blow for smaller savers.<\/p>\n

A source close to the consultations told the Reuters news agency that authorities were hoping to cut the tax band for smaller savers with less than 100,000 euros to three percent from 6.7 percent.<\/p>\n

The rate for deposits above that would then be increased to 12.5 percent from 9.9 percent.<\/p>\n<\/blockquote>\n

Described as a “take it or leave it” ultimatum given by the Troika to the Cypriot government, Guardian<\/em> economy columnist Michael Burke said<\/a> Europeans were looking “on in horror” at the potential raid on taxpayers’ bank account.<\/p>\n

“It’s now become clear,” wrote Burke, “the threat to European savers and banks isn’t anti-austerity parties but the Troika.”<\/p>\n

The Cyprus Mail<\/em> reports<\/a> the reaction from other parties on the left who oppose the plan:<\/p>\n

\n

AKEL leader Andros Kyprianou described Cyprus’ treatment by the troika as “vindictive and neo-colonial,” adding that his party would discuss proposing the island’s exit from the eurozone.<\/p>\n

“They are attempting to impose their political options on Cyprus, leading out country and people to conditions that are similar to those in other countries of the European south,” Kyprianou said. […]<\/p>\n

Demetris Syllouris, the chairman of EVROKO, said the government would not have his support on the matter.<\/p>\n

“If they have killed us once it does not matter if they kill us a second time. This is my reaction,” he said.<\/p>\n

The Green party suggested that the measures included in the decision did not ensure the salvation of the economy.<\/p>\n

“On the contrary, the consequences on common people and workers are expected to be tough, adding to the trials this people is already going through,” the Greens said.<\/p>\n<\/blockquote>\n

“Neither the unprecedented and catastrophic measures would be tolerated nor the humiliation of the Republic of Cyprus and its people,” the EDEK said in a statement.<\/p>\n

And Reuters<\/em> notes<\/a>:<\/p>\n

\n

Approval in Cyprus’ fractious 56-member parliament is far from a given: no party has an absolute majority and three parties say outright they will not back the tax. A vote initially planned for Sunday was rescheduled to give more time to build a consensus.<\/p>\n<\/blockquote>\n

Responding to the news on his blog, Paul Krugman writes<\/a>:<\/p>\n

\n

OK, I didn’t see that one coming. With all the problems in Greece, Italy, Spain, and Portugal I wasn’t watching Cyprus. But that’s where the big euro news is this weekend; in return for a bailout, Cyprus is supposed to impose a large haircut<\/a> — that is, loss — on all depositors in its banks.<\/p>\n

You can sort of see why they’re doing this: Cyprus is a money haven, especially for the assets of Russian beeznessmen; this means that it has a hugely oversized banking sector (think Iceland) and that a haircut-free bailout would be seen as a bailout, not just of Cyprus, but of Russians of, let’s say, uncertain probity and moral character. (I think it’s interesting that Mohamed El-Erian<\/a> manages to write about this thing, fairly reasonably, without so much as mentioning the Russian thing.)<\/p>\n

The big problem, however, is that it’s not just large foreign deposits that are taking a haircut; the haircut on small domestic deposits is a bit smaller, but still substantial. It’s as if the Europeans are holding up a neon sign, written in Greek and Italian, saying “time to stage a run on your banks!”<\/p>\n

Tomorrow and the days immediately following should be very interesting.<\/p>\n<\/blockquote>\n

__________________________________<\/p>\n

This work is licensed under a Creative Commons Attribution-Share Alike 3.0 License<\/p>\n<\/div>\n

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