March 18, 2013, New York Times
Europe’s decision to force depositors in Cypriot banks to share in the cost of the latest euro zone bailout has sparked outrage in Cyprus and fears that a run on deposits over the weekend might spread to larger countries at risk like Spain and Italy. Under an emergency deal reached early Saturday in Brussels, a one-time tax of 9.9 percent is to be levied on Cypriot bank deposits of more than 100,000 euros, or $130,000, effective [March 19]. That will hit wealthy depositors — mostly Russians who have put vast sums into Cyprus’s banks in recent years. But smaller deposits will also be taxed, at 6.75 percent, meaning that the banks will be confiscating money directly from retirees and ordinary workers to help pay the tab for the 10 billion euro bailout or $13 billion. 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. The island’s banks are also laden with loans made to Greek companies and individuals, which have turned sour as Greece endures its fourth year of economic and financial crisis. The “deposit tax”, which is expected to raise 5.8 billion euros, was part of a bailout agreement … among finance ministers from euro countries and representatives of the International Monetary Fund and the European Central Bank. The Cypriot bailout follows those for Greece, Portugal, Ireland and the Spanish banking sector — and is the first where bank depositors will be touched.
Note: What gives anyone the right to seize the deposits of ordinary bank account holders? Is this the first step towards establishing a precedent for governments to seize anything they want from ordinary citizens? For a report indicating that the Cypriot people may not take this attack lying down, click here.