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A stupid idea whose time had come

A "one-off" often isn't. Calling something after "stability" isn't very stable. Saying that something is not a precedent usually makes it one.

(...)

The move by the Eurogroup will also hit resident and nonresident depositors alike. We see no sign of a floor to protect the savings of the average Limassol widow or Larnaca house-buyer. Carsten Schneider, a German politician of the SPD, hooted this month about burning "Russian black money". Rather less about the little people. What a socialist.

Still, note that it is what it is: a tax, not a haircut or a sign of banks blowing up. That's the whole point.

OK, you'd best start off by reading Pawelmorski, really. Meanwhile our headline comes from Karl Whelan. As for myself, I'm actually quite shocked that they've gone ahead and levied the depositors below the €100k level. And I thought I was jaded about a) the malleability of domestic law for eurozone states to carry out things like this b) the sheer scale of the problem, and the lack of easy options, for financing Cyprus' bank rescue.

The spin that this is about spanking money-launderers is rubbish. The 9.9 per cent levy will be the cost of doing business for the average CIS corporate shell, as Pawelmorski notes. More to the point, someone clearly balked at increasing the rate above 10 per cent for big-ticket depositors -- because why else distribute pain to small holders to make up for it. Someone has an eye on Cyprus somehow maintaining a future as an offshore banking centre.

Lots more analysis in this one, worth a read.

Wind power

by Jerome a Paris (etg@eurotrib.com) on Sun Mar 17th, 2013 at 12:15:49 PM EST
[ Parent ]
Excellent article with lots of good data, thanks.

Peak oil is not an energy crisis. It is a liquid fuel crisis.
by Starvid on Sun Mar 17th, 2013 at 12:46:03 PM EST
[ Parent ]
" a) the malleability of domestic law for eurozone states to carry out things like this"

All of this hasn't been tested in the courts yet.

by IM on Sun Mar 17th, 2013 at 02:41:28 PM EST
[ Parent ]


Friends come and go. Enemies accumulate.
by JakeS (JangoSierra 'at' gmail 'dot' com) on Sun Mar 17th, 2013 at 02:53:32 PM EST
[ Parent ]
More a Justice delayed is justice denied problem.
by IM on Sun Mar 17th, 2013 at 03:44:49 PM EST
[ Parent ]
You have more confidence than I do in the judicial system's ability to provide redress.

Practically, how are the < € 100k depositors going to get their money back if a court rules that the decision is void? In what currency are they going to get their money back, given that the Euro is odds-on to not exist by the time the court case is over?

This will be swept under the carpet, and any suits will accomplish nothing more than allow the gangsters to leverage the mistreatment of widows and orphans into a larger sum of hush-money.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Sun Mar 17th, 2013 at 03:54:41 PM EST
[ Parent ]

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