Thread: International Bankster Enslavement Plan Revealed to Cyprus; Banks Remain Closed, Pre

Tuesday, March 26, 2013

International Bankster Enslavement Plan Revealed to Cyprus; Banks Remain Closed, President Investigates


This is the latest update in Cyprus bank raid series chronicled below

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Activist Post

It was anticipated that the weekend could bring finalized plans for how Cyprus would be dealt with by the Troika and parliament. The central problem that had revealed itself in the wake of the original indefinite bank holiday and subsequent ATM drain and protests, was how to stop capital flight when banks reopen, as well as a more widespread bank run across the Eurozone as trust in the banking system verges on collapse. The two largest banks in Cyprus saw the imposition of ATM withdrawal limits, which declined from 260 Euros to 100 Euros ahead of projected bank openings tomorrow, Tuesday -- Sorry, make that Wednesday. Sorry, again, make that Thursday. An urgent statement was issued by the Central Bank that, "For the smooth functioning of the entire banking system, the Finance Minister has decided upon the recommendation of the Governor of the CBC, that all banks remain closed until Wednesday, 27 March 2013 included." The ongoing closure makes this the longest in history. See other closures here.

One key indicator for just how orchestrated this has been, and how dangerous the outcome, is that a final deal was supposedly reached at a dinner with Mario Draghi, Christine Lagarde, Herman Van Rompuy, and José Manuel Barroso -- essentially the Four Horsemen of economic apocalypse.

The new decision has been made to honor those who were insured up to 100,000 Euros (as if it is some sort of gift), but to steal around 30% of the money of depositors at the Bank of Cyprus, and all of the money for the uninsured of Cyprus Popular bank...

Even worse is the fact that a final deal was thought to hinge upon a vote by parliament, but as ZeroHedge notes:

There is talk that there may be no need for the government to vote for this - since it is not a 'tax' but a bank restructuring. It seems they have kept it in the bankers ... the ECB (in its independent way) tells the Cypriot NCB what it should do, the Cypriot central bank then restructures its bank how it sees fit - good/bad bank and haircuts where it sees fit - this then gets around need for vote from government AND any possibility of a European Union law (on taxation) being broken ... (Source)

The deal is being welcomed by Eurozone finance ministers, naturally. On the surface it might seem that only a group of heavy investors will take the hit and that the common man has been saved, but even German Finance Minister, Wolfgang Schaeuble, had to admit that, "Cyprus faces a long, difficult path to rebuild its economy, but claimed that the deal reached in Brussels offers the country the best chance of getting back on its feet." (Source)


Other finance ministers weighed in on the program:

IMF chief Christine Lagarde said the agreement was a comprehensive and credible plan which provided the basis for restoring trust in the Cypriot banking system, which was key to supporting growth.

IMF chief Christine Lagarde said she would recommend to the board of the IMF that they should take part in the programme, but did not specify the amount.

French Finance Minister Pierre Moscovici rejected charges that the EU had brought Cypriots to their knees, saying it was the island's offshore business model that had failed.

He repeated his favourite catch phrase that Cyprus had a cazino (sic) economy that was on the brink of bankruptcy. (Source)

German Chancellor Angela Merkel was thrilled as well that "the deal was right for Cyprus because it ensured that those who contributed to the crisis were required to pay towards its resolution."

These words should be anything but comforting coming from a system of centralized control. The IMF in particular has been responsible for freeing exactly zero countries from any type of economic turmoil, but are specialists at introducing and exacerbating systems of long-term economic enslavement . . . see Argentina and Jamaica. The IMF (a.k.a financial terrorists) absolutely loves crisis and is always positioned to capitalize through austerity and Soviet-style governance.

Meanwhile, in Cyprus, bank employees and the general public alike wait for banks to reopen in order to assess the damage. And, as further proof of what a great deal Cyprus is getting, word was issued by the Dutch finance minister that Cyprus "represents a new template for resolving euro zone banking problems."Let the fallout begin....

President Anastasiades said he has launched an investigation into who brought about this economic crisis. Since he has stated that leaving the Euro is not the answer, does anyone believe that he will instruct the spotlight to shine on those mentioned above?

As an aside: we should also pay close attention to rhetoric coming from the United States, as Cyprus will be cited as a microcosm of a larger "problem" in dire need of a "solution." Well-known economist and New York Times columnist, Paul Krugman, is highlighting the potential effectiveness of government intervention through "Cross Money Controls." Because the world economy just continues to improve as governments increase their oversight and control of our money. Right?

__________________________________________________ _____________________________

Previous Update from 3-24:

The Cyprus parliament and the Troika agreed today on a deal to steal billions to bailout the insolvent banks in Cyprus to prevent a feared bankruptcy, and details of yesterday's 9 bills on capital controls also started to emerge. Both are even worse for financial freedom than previously thought.

Taking advantage of the populist outrage against the initial plan to raid everyone's bank accounts to pay for private bank failures, the autocrats decided they would raid up to 20% from wealthy depositors with over €100,000 at the Bank of Cyprus and 4% at other banks. Simultaneously, the plan would nationalize pensions of average citizens which are, for the moment, safe from the heist.

Russia Today reports:

Cyprus and the Troika have agreed to a 20 per cent tax on deposits over 100,000 euros at the Bank of Cyprus and 4 per cent on deposits held at other banks.

A senior Cypriot official told Reuters that a plan to tap nationalized pension funds would not be a part of a plan to raise billions of euros in return for a bailout from the European Union. Cyprus said earlier on Saturday that it was looking at seizing a quarter of the value of big deposits at its largest bank in order to raise such funds.

"Unfortunately, the events of recent days have led to a situation where there are no longer any optimal solutions available. Today, there are only hard choices left," European Union Economic and Monetary Affairs Commissioner Olli Rehn said in a statement.

All this because the Bank of Cyprus' capital was supposedly wiped out by their forced investments of Greek debt during their bailout phase. How are everyday citizens and foreign depositors to blame for this scenario? How can they call it a tax when the money goes directly to banks instead of helping the nation?

It seems the Troika is waging a successful class warfare propaganda battle against the Cypriot people and parliament. They have made robbing people's private bank accounts acceptable as long as it only happens to the wealthy.

"If it was like this, I think it might be quite suitable because it means that the highest deposits will be taxed," said Finnish Prime Minister Jyrki Katainen.

But do average citizens and small depositors make out better in this deal? The Troika and the Cyprus parliament are no longer demanding a "fee" from average depositors, they'll now take their financial freedom instead by implementing harsh capital controls to keep depositors from moving their money freely, and they took control of pensions.

Cyprus news site CBCY.com reports:

Τhe Ηοuse of Representatives last night voted by majority to nationalise state pensions and split failing lenders into good and bad banks.

They also gave the government powers to impose capital controls on banks, anticipating a flood of money from the island when banks are due to reopen on Tuesday after more than a week of lockdown.

....

The plan to nationalise semi-state pension funds has, however, met with resistance, particularly from Germany which made clear that tapping pensions could by even more painful for ordinary Cypriots than a deposit levy.

Do average people think they were going to get off easy negotiating with these power-hungry thieves?

Despite the best efforts to trick citizens, protesters seem to fear their pensions being hijacked just as much as their bank accounts be robbed.

RT reports:

Earlier on Saturday, at least 1,000 bank workers in Cyprus hit the streets of the country’s capital of Nicosia. The demonstrators marched against the latest bailout measures taken by the country’s central bank.

“You destroy our work and steal our pensions,” demonstrators chanted as they marched to the Cypriot Parliament. One protester held a banner which read, “Hands off pension funds.”

All ages were present at the demonstration, with many parents pushing their children down the street in strollers.

“I’ve been working for 20 years and I’ve paid all the taxes of all my pension contributions and every Euro. Now I run the risk of losing my job and my pension, and I will have no money to support my children,”Cyprus Popular Bank employee Angela Panayotou said, as quoted by Ria Novosti.

First austerity, now the great bank and pension raid. The saga continues. Stay tuned for updates and see earlier updates below as to how this story unfolded.

__________________________________________________ _____________________________

Previous Update from 3-22:
The question has now been answered about how to do that even after a complete loss of trust from depositors who had been assured from president Anastasiades just weeks before that no such scheme would take place: Government force, naturally.

Parliament passed a package of 9 bills, including a restructure of the country's second largest bank, plus limitations on cash transactions. While specific details are still yet to be released, capital controls are the final stage of looting implemented by the government-banking-oligarchy. It is yet another benchmark set in the forward march toward a complete banking takeover.

This weekend is expected to reveal much more about how the Eurozone is going to manage Cyprus, and set a precedent for handling other nations. (Source)

For more about what capital controls could look like in America, click HERE.
___________
Update 3/22: Local news in Cyprus is reporting an escalation in the protests that have begun in the wake of attempts by EU chiefs to confiscate the savings of depositors. The news of possible bank closures has enraged the public. It appears that in order to keep things under control, the Central Bank is discussing a possible bank merger rather than a full shut down.

The Central Bank of Cyprus today intervened to quash frantic reports that Cyprus Popular Bank is to be closed down.

The reports sent hundreds of Cyprus Popular Bank employees and holders of the bank's bonds out into the streets. Police deployed a strong force outside the Bank's headquarters in the capital Nicosia to prevent them smashing into the building. (Source)

Here is a video showing police in riot gear on the scene:



Cyprus Broadcasting Corporation says the following:

The European Central Bank today said it had decided to allow the Central Bank of Cyprus to keep providing banks with emergency funding until this coming Monday.

An ECB statement said that thereafter, Emergency Liquidity Assistance can only be considered if a rescue programme is in place that would ensure the solvency of the banks involved. (Source)

Meanwhile, President Anastasiades supposedly has a Plan B ready:

Cyprus's political leadership today decided on a package of measures dubbed "plan B" to avert a financial meltdown, as the finance minister is engaged in rescue talks with Russian officials in Moscow....

No details of the plan were immediately announced, but Averof Neophytou, a close associate of President Nicos Anastasiades said that there had been a unanimous decision to establish a "Solidarity Fund". (Source)

Recent photos of the protests were posted at ZeroHedge, which you can see HERE. One protester can be seen holding a sign that says, "Where is the solidarity?"

Europe and Russia have rejected a bailout as we head into the weekend...

ATMs in Cyprus have been all but drained, electronic transfers were halted, and riots ensued following a decision by European Union chiefs to raid private savings accounts to help pay for the country's $13 billion bailout. It was believed that there were plans to stretch a bank holiday to at least one week, while the exact measures were decided upon. However, yesterday the Cypriot parliament rejected the scheme outright, leading many to speculate that this would be the start of something even worse.

Sure enough, much like the U.S. Federal Reserve threatened martial law and blood in the streets if Congress didn't accept sweeping bailouts in 2008, now Germany is saying that Cypriot banks might never reopen after parliament's decision:

Germany's finance minister, Wolfgang Schaeuble said major Cypriot banks were "insolvent if there are no emergency funds,” according to a BBC report, meaning savers might lose all their money if no deal was reached. (Source)

There is extreme worry that if the banks do reopen, capital flight is all but assured. Meanwhile, similar confiscation schemes are being proposed for Italy and New Zealand (more on that below), spurring questions about which other nations are in line for a "haircut" . . . perhaps better called "the chopping block."

Whether or not Cyprus gets its bailout in one form or another -- perhaps from Russia -- this is a precedent-setting crisis that is already leading to such a level of distrust in Cyprus that merchants are even refusing credit card payments. This is indeed shaping up to be a potential "Lehman Brothers Moment" with ramifications that could extend even beyond the troubled nations of Europe.

Reuters reported at the beginning of this crisis that,

The euro zone agreed on Saturday to hand Cyprus a bailout worth 10 billion euros ($13 billion), but demanded depositors in its banks forfeit some money to stave off bankruptcy despite the risk of a wider run on savings.
....
In a radical departure from previous aid packages - and one that gave rise to incredulity and anger across the country - euro zone finance ministers forced Cyprus' savers to pay up to 10 percent of their deposits to raise almost 6 billion euros.

Cyprus president Nicos Anastasiades agreed to the deal, which completely reversed his previous assurances that it would not happen. It sets a very dangerous precedent for future bailouts. As if brutal austerity wasn't enough, the EU is now demanding a bailout tax making citizens and expat depositors alike personally liable for government and private bank debts. Reuters also noted that according to a draft of the legislation, criminal penalties of up to 3 years in jail and 50,000 euros could be imposed upon anyone who doesn't comply.

The New York Times added:

Most of the 10 billion euros will go to bail out Cypriot banks, which took a blow when their substantial holdings of Greek government bonds were written down as part of that country’s second bailout.

Britain has 60,000 depositors in Cypriot banks, including thousands of military and government personnel stationed on the island. George Osborne highlighted that Cypriot banks in England would not be subjected to the tax (originally proposed at 6.75% for accounts under 100,000 Euros; 9.9% for those over 100,000), but expat depositors apparently will -- government and military excluded:

George Osborne vowed today that those serving in Britain's military or government in Cyprus will be protected after European finance chiefs ordered an unprecedented raid on personal bank accounts.

Up to 60,000 British savers are to lose thousands of pounds each as expats in Cyprus have their savings decimated in part of a painful bid to bail out the bankrupt island.

The Chancellor said the financial situation in Cyprus was ‘an example of what happens if you don't show the world that you can pay your way’, adding: ‘We are not part of the bailout.’ (Source)

The tax is being justified as a last-ditch effort to raise money and keep Cyprus from supposedly causing a domino effect across the Eurozone as indebted nations begin to collapse. Cyprus had set itself up as a strong banking center for investors, but many are outraged over Anastasiades' about-face:

Those affected will include rich Russians with deposits in Cyprus and Europeans who have retired to the island, as well as Cypriots themselves.

"I'm furious," said Chris Drake, a former Middle East correspondent for the BBC who lives in Cyprus. "There were plenty of opportunities to take our money out; we didn't because we were promised it was a red line which would not be crossed."

"I've lost several thousand," he told Reuters.

ZeroHedge reports that it is those "rich Russians" who could wind up angriest. Eurogroup had suggested that depositors under 100,000 euros should maintain their insurance against such a scheme, but it is possible that larger depositors will absorb their percentage by moving the top percentage tax to 15.6%.

The Eurogroup will give Cyprus more flexibility on bank levy, and that Cyprus should safeguard depositors under €100,000, even as the full €5.8 billion deposit goal must still be hit.

(...)

(The) Russian response to the discovery that haircuts on big deposits just rose from 9.9% to over 15.6% will hardly be warm and cuddly. Now may be a good time to ban gun (and plutonium) sales to angry Russian billionaire oligarchs. (Source)

Many speculated that the heavy Russian investment in the Cyprus banking system would spur Russia to be the bailout lender of choice, but as of today, 3/22, that appears not to be the case. Europe and Russia both have rejected that possibility before Parliament even voted, as ZeroHedge outlines:

...this entire farce has been nothing but a political gambit dictated by Germany from the onset. And so while GETCO's entire army of algos awaits the flashing red headline with a touch of optimism to unleash robotic buying of ES and EURUSD, we fast forward to the inevitable denouement, which is, not surprisingly, bad news for Cyprus, because as the FT reports, confirming our initial skepticism, "European officials rejected Cyprus’ plans for an alternative package to save its banking sector and remain in the euro, starting a fresh round of talks with the island nation’s government on Friday."

(...)

Elsewhere, pouring gas on the non-bailout fire, was Russia which Bloomberg reported has crushed all hopes it would swoop in as an alternative white knight, and bailout Cyprus. After all why would it: the worse the situation on the ground, already blamed on Merkel and the Troika, the greater its leverage, and the more power it has to acquire any and all Cypriot assets for free if and when Cyprus is "spun off" from Europe.

And, as ZeroHedge goes on to note, there are wide implications for European-Russian political and economic relations:

Bottom line: Europe will not agree to any plan that does not promote "debt sustainability", i.e., impairment of Russian oligarch savings, which in turn is a non-starter in Cyprus, and would lead to an immediate trade war with European energy supplier Russia.

That is, in a nutshell, the stalemate as we head into the weekend, and a Monday Cyprus bank holiday, during which the ECB has issued the supreme bluff, and said it would cut off all the funding to the small island.

____________________
Update from 3/19 below.

The President just proposed the 'levy' on deposits begin at EUR 20,000 just hours ahead of today's planned vote.

CYPRUS REVISED BILL SEES NO LEVY ON DEPOSITS UP TO EU 20,000

However, it is still theft of private property which appears to be the philosophical stumbling block for the parties involved and therefore today's vote appears to be delayed:

ANASTASIADES TO MEET PARTY LEADERS 9 AM TOMORROW: SPOKESPERSON

CYPRUS PARLIAMENT BANK-LEVY VOTE MAY HAPPEN TOMORROW, CYBC SAYS (Source)

Cyprus is now the fifth country seeking a bailout, but the extraordinarily high depositor tax is unprecedented. Eurozone citizens and outside investors might not see the tax as the confidence-inspiring measure that government asserts it to be. Rather, citizens everywhere will view it as a clear signal that other governments are ready to follow suit and are extremely unclear about who will ultimately be affected, thus destroying confidence in the entire banking system. The "Russian billionaire" angle might be used to forestall more widespread outrage, but it is still new ground to go directly after depositors ... and not all affected depositors will be Russian billionaires, especially at a starting point of 20,000 euros.

"This is theft, pure and simple," one pensioner told Reuters. Yes it is.



And here's some colorful commentary about this:



A final vote from Cyprus' parliament has been postponed several times, and now appears to be set for 9 AM Wednesday. Arm twisting by banksters continues to work toward the necessary 33% approval to solidify wealth confiscation. The latest poll shows that 71% of Cypriots want to reject the scheme.

Follow #Cyprus depositors as they vent their fury through social media:

#Cyprus Depositors Vent Fury Through Social Media | Zero Hedge

And for those who believe that something like this could not happen throughout Europe, or even in the United States, Tyler Durden of ZeroHedge posits that the Rubicon has been crossed and "wealth taxation" is a topic that is likely to grow in popularity among banking oligarchs. Although in the U.S. wealth taxation might take a slightly different form than what is being proposed for Cyprus.

So, if the US was to go the Cyprus route, and begin impairing balance sheet liabilities to remark assets, there would be precious little space (with just $4.3 trillion in total other funding liabilities), before one would need to start eating into the deposit base, should Congress decide to implement a very "fair and just" financial asset tax in the US next.

Will Congress do this? Obviously, nobody can answer that question now. However, it was "absolutely certain" as recently as 48 hours ago that Cyprus too would see no depositor "bail in" either. Then things changed rapidly. What is known, is that according to the same BCG chart we showed last night, the necessary debt-reduction needed in the US to reach a sustainable debt level, was over $8.2 trillion using debt numbers as of 2009...

... Since then consolidated US debt has risen by over $5 trillion.

Which means that if, indeed, the US proceeds with its own wealth tax, then deposits may well be one "wealth class" that gets impaired. Of course, since in the US other financial assets, namely the stock market, account for a far greater proportion of household net worth, it is quite possible that instead of impairing deposits at US banks, which already subsist solely due to the Fed's $2 trillion in excess reserves, the government may instead choose to generously tax simply 30% of all of your stock holdings, and achieve the same "wealth transfer" result. (Source)

In fact, this type of asset taxation is already being proposed for Italy, as stated by Commerzbank's chief economist, Jörg Krämer :

"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. (Source)

New Zealand is also considering a Cyprus-like solution for their bank failures.

"Bill English is proposing a Cyprus-style solution for managing bank failure here in New Zealand – a solution that will see small depositors lose some of their savings to fund big bank bailouts," said Green Party Co-leader Dr Russel Norman.

The Reserve Bank is in the final stages of implementing a system of managing bank failure called Open Bank Resolution. The scheme will put all bank depositors on the hook for bailing out their bank.

Depositors will overnight have their savings shaved by the amount needed to keep the bank afloat.

While the details are still to be finalised, nearly all depositors will see their savings reduced by the same proportions. (Source)

One thing is for certain, banksters and their government partners are in no position to earn anyone's trust.

This post has been updated, 3/26.

Other sources:
Cyprus savers lose 10% of money after shock bailout | Irish Examiner
Cyprus' savers bear brunt of unprecedented bailout
Cypriots Frantic As Bailout Hits Bank Accounts | Greece.GreekReporter.com Latest News from Greece
BANK HOLIDAY IN CYPRUS! Government to seize 10 percent of all savings & deposits! - Max Keiser
Cyprus Aims to Meet Bailout Terms Today, Deposit Tax Debated - Bloomberg
http://www.nytimes.com/2013/03/25/op....html?hp&_r=2&

Read other articles by Activist Post Here

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Activist Post: International Bankster Enslavement Plan Revealed to Cyprus; Banks Remain Closed, President Investigates

Monday, 25 March 2013 16:00 Cyprus Deal Turns Bank Depositors into Lenders, Abolishes National Sovereignty

Written by Bob Adelmann







Late Sunday night the president of Cyprus, Nicos Anastasiades, was officially informed of the deal the unelected Eurogroup had come up with in order for Cyprus to receive its bailout from the European Central Bank. Anastasiades flew to Brussels on Sunday to meet with Mario Draghi, the president of the European Central Bank (ECB), Christine Lagarde, the managing director of the International Monetary Fund (IMF), and José Barroso, the president of the European Commission (EC). The meeting was run by Herman Van Rompuy, the president of the European Council. On his way to the meeting, Anastasiades admitted that “the situation is very difficult.”

That was an understatement. Once the details were explained to Anastasiades, the Eurogroup — consisting of unelected finance ministers from each country that uses the euro, and headed by another unelected bureaucrat, Jeroen Dijsselbloem — issued a statement of unanimity:

The Eurogroup has reached an agreement with the Cypriot authorities on the key elements necessary for a future macroeconomic adjustment program. This agreement is supported by all euro area Member States as well as the three institutions.

The details were ugly. There will first of all be a “downsizing of the [country’s] financial sector” by theft of part of every account over roughly $130,000 (€100,000) in Cyprus’ two largest banks, the Bank of Cyprus and the Cyprus Popular Bank (the Laiki Bank), which hold half of all bank deposits in the country. Any amount above $130,000 will make a “contribution” to the deal amounting to an estimated 20 percent while those accounts held in Cyprus’ other 26 banks will be nicked four percent. The Cyprus Popular Bank will be liquidated and accounts $130,000 or smaller will be transferred to the Bank of Cyprus. Accounts over $130,000 will disappear along with any investors’ bonds in that bank. The country’s capital gains tax rate will be increased along with corporate income tax rates.

Said “downsizing” was exacerbated by Anastasiades telling his friends what was coming on Thursday and to get their money out before the deal was announced. According to the Daily Mail, within the next 48 hours some $6 billion of foreign deposits (estimated to be between $20 and $40 billion) was transferred out of the country, leaving a banking system weakened by haircuts already suffered due to the Greek financial crisis teetering on the edge.

Anticipating that once the banks were opened small depositors would be taking their money out as well, the deal kept the remaining banks closed indefinitely, limiting depositors just $130 maximum daily withdrawals from their accounts through ATM machines.

And a new term was introduced into the lexicon of the day: “bail-in." A bail-in occurs when the contract terms of a bond are unilaterally and illegally changed by an outside illegal and unelected body so that the bond holder who normally would stand at the head of the line in a bankruptcy gets to “contribute” part of his investment to save the bank in which he invested. In essence it’s a forced haircut.

The statement was full of praise for the willingness of the Cyprus government and its president to go along with the ultimatum: “Together with the decisions taken by Cyprus, this results in a fully financed program which will allow Cyprus’ public debt to remain on a sustainable path.”

Lipstick in generous quantities was applied to the robbery. First, Dijsselbloem said, "We've put an end to the uncertainty that affected Cyprus and the euro area over the last few days. The Laiki bank will have to be dissolved so yes, senior bond holders, along with the others, will basically be wiped out there.” But they aren't the only ones “contributing” to the rescue. Added Dijsselbloem, “The contribution to this recapitalization must come, inevitably, from senior bondholders, junior bondholders, shareholders and … uninsured depositors.”
Said Lagarde, the deal is “a comprehensive and credible plan to deal with the current economic challenges in the country … this will form a lasting, durable and fully financed solution.”
The finance minister from Ireland, one of the thieves on Dijsselbloem’s committee, said, “We would never hit depositors in Ireland [like we just did in Cyprus].… We believe the $130,000 [insured limit for depositors] is absolutely sacrosanct and there is absolutely no circumstance in which we would touch depositors because they are guaranteed and that guarantee applies across the euro zone.” Barroso added, “I am confident that the program will work.”

The precedent has been established, despite protestations to the contrary. The Rubicon has been crossed and bondholders and depositors will no longer trust the banks in Cyprus or in the eurozone. Mats Persson called the precedent risky:

The Eurozone set a risky precedent when it decided to go for depositors. Images of long queues outside ATMs will have registered in other parts of the Mediterranean. If Cypriot depositors are forced to pay today, why not Spaniards tomorrow?...

Events in Cyprus have shown just what a high-risk gamble the euro was....

If you could design a system whereby a splinter could take down an elephant, this would be it.

The deal announced Sunday night by the Eurogroup and applauded by its connivers failed to mention the single biggest cost of all. Depositors are losing their money, bondholders are getting forced haircuts, banks are being closed leaving thousands out of work, and the wealthy are being hit again through higher capital gains taxes and higher corporate taxes. But the biggest cost of all is the loss of national sovereignty, where an unelected gaggle of bureaucrats can come in and dictate the terms of a bailout to a once-sovereign nation, all in the name of saving the banks. It’s the banks, always the banks, forever the banks, no matter what the real cost is.

^{Photo of students holding placards in a parade in Cyprus March 25: AP Images}

A graduate of Cornell University and a former investment advisor, Bob is a regular contributor to The New American and blogs frequently at www.LightFromTheRight.com, primarily on economics and politics. He can be reached at badelmann@thenewamerican.com.



Cyprus Deal Turns Bank Depositors into Lenders, Abolishes National Sovereignty