Cyprus to apply emergency tax as part of (Update: Now cancelled)

[FerrelGeek]

How is it fair for the rich to hoard the people's money, while so many of the people die of starvation, disease, and exposure.

Huh???? Where is it written anywhere that it's the people's money?? News flash, the US isn't the good old USSR, son. And btw, I'm not rich.

 

[BoberFett]

As I said, inflation is very low, assuming you eat LCD televisions for dinner every night. If you prefer eating food, you've probably noticed inflation.

Tying CPI to seldom purchased items is an attempt to mask their failures, so Keyenesians and other similar buffoons will continue to use it as proof that there is no inflation. Forget facts, we've got an economy to centrally plan!

 

[FerrelGeek]

As I said, inflation is very low, assuming you eat LCD televisions for dinner every night. If you prefer eating food, you've probably noticed inflation.

Tying CPI to seldom purchased items is an attempt to mask their failures, so Keyenesians and other similar buffoons will continue to use it as proof that there is no inflation. Forget facts, we've got an economy to centrally plan!

Or gasoline / diesel prices, which affect shipping costs.

 

[BoberFett]

Or gasoline / diesel prices, which affect shipping costs.

Shhhh, that doesn't matter. The price on housing has fallen, so remember that the next time you're in the store picking up a six pack of new homes to go with that TV you've got simmering at home in the crock pot.

 

[Mark R]

Update: Bank account tax rejected by politicians.

Members of parliament voted overwhelmingly against the tax. There were 36 No votes and 19 abstentions.

Link

 

[waggy]

wonder what they are going to do now

 

[boomerang]

wonder what they are going to do now

Probably take it all...

 

[Svnla]

Did I read that the banks will not open until Thursday?

 

[CPA]

How is it fair for the rich to hoard the people's money, while so many of the people die of starvation, disease, and exposure.

Rich don't hoard anybody's money but their own.

 

[Dari]

This thing is far from over.

Bank of Cyprus big depositors could lose up to 60%

Bank of Cyprus depositors with more than 100,000 euros (£84,300; $128,200) could lose

up to 60% of their savings as part of an EU-IMF bailout restructuring move, officials say.

The central bank says 37.5% of holdings over 100,000 euros will become shares.

Up to 22.5% will go into a fund attracting no interest and may be subject to further write-

offs.

The other 40% will attract interest - but this will not be paid unless the bank performs

well.

It was known that the wealthiest savers at the Bank of Cyprus would take a large hit from

the bailout deal - but not to this extent, the BBC's Mark Lowen reports.

Cypriot officials have also said that big depositors at Laiki - the country's second largest

bank - could face an even tougher "haircut". However, no details have been released.

The officials say that Laiki will eventually be absorbed into the Bank of Cyprus.

The fear is that once the unprecedented capital controls - which are in place of an

indefinite time - are lifted, the wealthiest will rush to move their deposits abroad, our

correspondent says.

He adds that the larger than expected loss could also have devastating consequences for

large depositors such as schools and universities. And it could spread fear in other

indebted eurozone countries that Cyprus might set a precedent.

'Loans written off'

Cyprus needs to raise 5.8bn euros to qualify for the bailout, and has become the first

eurozone member country to bring in capital controls to prevent a torrent of money

leaving the island and credit institutions collapsing.

The original 10bn-euro bailout deal was agreed in Brussels earlier this month. It placed a

one-off tax on all customers of Cypriot banks, starting at 6.75% for the smallest deposits.

But this led to mass protests across Cyprus, and the deal was later voted down by the

country's parliament. MPs later backed a revised deal.

Cypriot President Nicos Anastasiades has said the financial situation has been "contained"

following the deal.

He has also stressed that Cyprus has no intention of leaving the euro, stressing that "in no

way will we experiment with the future of our country".

On Thursday, banks in Cyprus opened for the first time in nearly two weeks. Queues

formed of people trying to access their money, but the mood was generally calm.

By Friday, banks had returned to their normal working hours and there were no longer

reports of big queues.

In a separate development, Cyprus launched an investigation after Greek media published

the names of politicians who allegedly had loans forgiven by three Cypriot banks at the

height of the crisis.

The Bank of Cyprus, Laiki and Hellenic Bank apparently wrote off loans of millions of euros

to companies, local authorities, and politicians from some of the island's biggest parties.

The list has now been handed to the ethics committee of the Cypriot parliament.

 

[Fern]

This thing is far from over.

So, now they've increased the so-called tax +60%.

I wonder if this was necessary because of the rich Russians 'beating' the system and withdrawing their money as reported earlier?

Fern

 

[Dari]

So, now they've increased the so-called tax +60%.

I wonder if this was necessary because of the rich Russians 'beating' the system and withdrawing their money as reported earlier?

Fern

Even if Russians did have money in their banking system, why the fuck would you just rob them of it like this? This whole thing is wrong on so many levels that I can't believe it's actually happening. They're making it seem as if it's the big depositors' fault for their crisis when it is clearly the banks' and their risks and the politicians for looking the other way. Robbing people of their money is a sure-fire way of bringing down any banking system and the political apparatus that supports it.

 

[Fern]

Even if Russians did have money in their banking system, why the fuck would you just rob them of it like this? This whole thing is wrong on so many levels that I can't believe it's actually happening. They're making it seem as if it's the big depositors' fault for their crisis when it is clearly the banks' and their risks and the politicians for looking the other way. Robbing people of their money is a sure-fire way of bringing down any banking system and the political apparatus that supports it.

I don't disagree with you.

But let me explain what my post was about. First, I now see we have two threads on this Cyprus issue. the other one is here: http://forums.anandtech.com/showthread.php?t=2309456&highlight=cypress

My remarks about the Russians beating the system was made there (my post #102). (I thought it was here, but then was puzzled when I couldn't find it.)

Anyway, the tax was 10% and Cyprus needed to raise a certain amount to meet the bailout terms. But this was then reported about the Russians (I'm putting two posts together for convenience):

Originally Posted by monovillage

Yesterday, we first reported on something very disturbing (at least to Cyprus' citizens): despite the closed banks (which will mostly reopen tomorrow, while the two biggest soon to be liquidated banks Laiki and BoC will be shuttered until Thursday) and the capital controls, the local financial system has been leaking cash. Lots and lots of cash.

Alas, we did not have much granularity or details on who or where these illegal transfers were conducted with. Today, courtesy of a follow up by Reuters, we do.

The result, at least for Europe, is quite scary because let's recall that the primary political purpose of destroying the Cyprus financial system was simply to punish and humiliate Russian billionaire oligarchs who held tens of billions in "unsecured" deposits with the island nation's two biggest banks.

As it turns out, these same oligrachs may have used the one week hiatus period of total chaos in the banking system to transfer the bulk of the cash they had deposited with one of the two main Cypriot banks, in the process making the whole punitive point of collapsing the Cyprus financial system entirely moot.

From Reuters:

While ordinary Cypriots queued at ATM machines to withdraw a few hundred euros as credit card transactions stopped, other depositors used an array of techniques to access their money.

No one knows exactly how much money has left Cyprus' banks, or where it has gone. The two banks at the centre of the crisis - Cyprus Popular Bank, also known as Laiki, and Bank of Cyprus - have units in London which remained open throughout the week and placed no limits on withdrawals. Bank of Cyprus also owns 80 percent of Russia's Uniastrum Bank, which put no restrictions on withdrawals in Russia. Russians were among Cypriot banks' largest depositors.

If true: Bwuhahahahaha

I suspect we'll find out if the rich Russians were able to somehow pull out their money because, if so, the tax raised on deposits will not rise to the level necessary to meet the requirements of the bailout deal.

Fern

Now we see the tax on deposits rising to +60%

So, in accordance with my post in the other Cyprus thread, I'm guessing reports of Russians sneaking their money out was true, and so the rate had to be raised from 10% to 60%. (It has been reported a very substantial amount of large deposits in Cyprus were from Russians, including the mafia.)

In any case, I believe the Cyprus banking industry is now FUBAR'd.

Fern