Cyprus surprise - Cypriot depositors to take a 'haircut'

ILW

Masomnia wrote: »

And apparently the government is going to compensate UK civil servants and military personnel. Not sure why!

So the UK taxpayer will be subsidising a Cypriot bank?
Just seems to get madder and madder.

ChiefGrasscutter

Well if you were a military person posted to the place with no choice in the matter and therefore HAD to have a Cypriot bank account to function in the place - I'll bet you would be looking to HMG to pick up the tab for this mess as well.
So I'm not suprised.

Their situation is different from those who have sought of their own accord to move there or have bank accounts there.

ILW

Does this include current accounts?

Graham_Devon

ILW wrote: »

Does this include current accounts?

I believe so. Hence why the military is affected.

It's any account with a deposit apparently.

Wouldn't be very nice to find on Tuesday you are charged for going overdrawn due to this and the obvious problems accessing bank accounts that week.

StrawberryTwist

Masomnia wrote: »

And apparently the government is going to compensate UK civil servants and military personnel. Not sure why!

Because Military personal are there through no choice of their own! Think of the young squaddie getting his 'tax rebate bonus' into his account tomorrow after doing a hard 7 month tour in Afghan and the Cypriot government helping themselves to it. That hardly seems 'fair' either.

Those posted there saving as much as they can to be able to buy their own home in the UK only to have some of their house deposit taken off them - that seems hardly fair either! Would that not of affected your plans if that happened to you?

Forces wages pay UK tax, NI and contributions in lieu of 'council tax' when posted overseas - all helps towards the economy of the UK, should what they do have left over after that be dipped into by a government in a country that they may only be serving in for a year or 2? ( Cyprus postings are usually no more then 3 years)

John_Pierpoint

ChiefGrasscutter wrote: »

It also doesn't affect Greeks owning accounts in Cyprus.......because, well I don't know why. But probably because they are the most likely to riot and trash/burn the place.
I'm surprised they don't also include !!!!!! and lesbos as a random minority group as also being excluded.

You really could not make this up.

I cannot see how this can begin to be legal, does one send in a certified copy of one's passport and then they replace the 10% stolen ?
Does Cyprus actually have the technology to print Euro notes?
I remember posting a joke (?) reply on a thread, where I went through my bundle of Euro notes identifying which country had printed the note and warning the readers to spend the Southern ones.
I am pretty sure that an arbitrary confiscation of money is no more legal under EU (or is it the European Court of Human Rights) than the arbitrary confiscation of say land in Aberdeen.

John_Pierpoint

cepheus wrote: »

I'm still wondering what else could have been done. Charge bondholders before deposit holders?

Perhaps the depositors levy could have been made on all foreign deposits not resident in Cyprus by say 20%? Why else would someone want a savings account in Cyprus (as opposed to a foreign version of the bank) if it wasn't to evade tax?

Perhaps the Cyprus finance minister didn't want a horses head on his pillow?

Presumably the bonds are next to worthless anyway?

I would think that money coming to Cyprus was coming from countries where arbitrary confiscation by the government is just normality, though more likely to be done by an inflationary spiral.
Those uk citizens in the army and civil service are being given preferential treatment, along with their inflation proof pensions, because the wagons are being circled, the government can print the money, but cannot afford dissent in the ranks; at a time like this.
It was claimed during the appearance of Gideon in the Andrew Marr show, that only 3k individuals are involved (compared to[STRIKE] ~ 25k [/STRIKE] ~ 60k expats.)

ChiefGrasscutter

I think the Greek owned deposits are to be sold/transfered back to a Greek bank.

Like you, I also have postulated on here the nuclear option for any of the PIIGS to threaten that they will quite literally start printing Euros themselves. I recall being told it would be quite illegal - to which I replied yes, and so what, is Germany going to invade them?
This may end up in the courts - but then again once we start getting into the realities as opposed to the theories of international law it starts to become a case of those with the biggest stick get to lay down the law.
If the courts rule against the governments then the governments simply pass a one line act the next day which says the court's decison is invalid.......and so on.
Even retrospective leglistation is not new, California I think passed some act which had the result of a retrospecive tax on monies already paid out which had to be clawed back.

As for the land in the UK, HMG could simply invoke the Emergency Powers Act if it really wanted to and requisition it from you - totally legally. The only way to stop it would be if you had accesss to and a willingness to use more firepower than the police/army - at which point you now become the law rather than HMG.

It should be an interesting week ahead

John_Pierpoint

http://www.greekplanet.com.au/forum/index.php?showtopic=8113

A bit like the English having to bail out the Scots.

http://www.bbc.co.uk/history/british/civil_war_revolution/scotland_darien_01.shtml

That is a little fanciful - the English still had credit of their own.

No amount of money could make up for the Greek nation's sense of betrayal, however. Many [STRIKE]Scots[/STRIKE] Greeks believed that their [STRIKE]chance of [/STRIKE]independence had been deliberately sabotaged by the [STRIKE]English,[/STRIKE] Germans and the resentment this fostered played no small part in the[STRIKE] Jacobite rebellions[/STRIKE] riots and bank runs which were to plague the European Union.

When is someone going to restructure these zombie banks ?

cepheus

Masomnia wrote: »

And apparently the government is going to compensate UK civil servants and military personnel. Not sure why!

I guess some of those people didn't have much choice being in Cyprus, they were posted there and used the local banks.

In contrast some Brits decided to live there, gained large tax advantages and they must have known that the economy was unable to support the banks.