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Cyprus surprise - Cypriot depositors to take a 'haircut'
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...Hopefully you'll all be along to tell me why Cyprus is different and it wouldn't/couldn't happen here!! (please!)!
My best guess as to what is happening is this; because of their exposure to the Greek economy the Cypriot banks are bust, but since the banking sector in Cyprus is so large in relation to the Cypriot economy, it is beyond the capabilities of the Cypriot government to take on the debt necessary to recapitalise the banks. Since no one else is prepared to take on the liability, it's a simple choice; either you (a) take a slice of the deposits to recapitalise the banks or (b) you let them go bust. Presumably (b) was not regarded as an attractive option.If you were a Spanish or even Italian saver , how would you react to this ?..
If I was a Spanish or even Italian saver my money would already be with HSBC.:) But I know what you mean; there is the risk of contagion. Expect reassuring words issuing from the mouths of sundry Euro-politicians along the lines of 'it won't happen here'.0 -
If you were a Spanish or even Italian saver , how would you react to this ? I can see Hoards of people taking out as much as they can in cash once the weekend is over .. I really am beginning to think this may well be a watershed moment ... A massive gamble by the E.U ..
Italy already tax investments
There is a standard 34€ savings tax every year on all investments. That includes saving accounts."The whole problem with the world is that fools and fanatics are always so certain of themselves, but wiser people so full of doubts."
Bertrand Russell. British author, mathematician, & philosopher (1872 - 1970)0 -
I wonder how many UK savers in general have lost just as much due to inflation and low interest rates over the past 4 years yet don't even realise it?
If banks said we will charge you 2 or 3% per year for the privilege of depositing money, there would be a riot. But that in effect what many savers allow to happen, unless they shop around on the internet.0 -
I wonder how many UK savers in general have lost just as much due to inflation and low interest rates over the past 4 years yet don't even realise it?
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Most British residents have lost more than this with the VAT rise over the term of this parliament, and don't even notice it.
This is a tax.
Like any other tax.
It's being noticed because it's being taken in one shot, rather than stealthily over several years, which is the British government's way of taking it.“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
I find this scary. My parents retired to Cyprus and lived there for several years. They chose to live there because my mum has a high level of disability caused by mutliple health problems. The warmth improved her mobility and gave her a better quality of life. Income from modest savings was important to them. I am so glad they came back to the UK as I know this would have had a big impact on them. During my visits I met many of their friends. Most lived fairly modest lifestyles relying on savings to top up their uk state pension. Some couples had sold uk houses and found it cheaper to rent out there than buy. It will be a big blow to people that have made that choice.0
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I find this scary. .
Do you find UK tax raids any less scary, just because they're more stealthy?“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
...because they've got some savings.
Tapping up skint people to provide bailout funds would be fruitless.
Cyprus doesn't have the same negotiating position as Greece or Spain - they did have a choice though and decided the alternative was worse.
To a degree it seems like a good idea. Putting cash in a bank should be seen as an investment rather than a risk free exercise.
The silverbugs will be along soon to say how clever they've been by burying coins in the back garden.
It's not about the tax. It's not even really about the idea.
It's about how it's been carried out.
It's been done behind the scenes, after closing hours, over a bank holiday weekend.
Cypriots have been given absolutely no time to prepare. No information to vote on. No ability to make an informed choice. No opportunity to protest.
I very much doubt you and Hamish would be best pleased if your bank account was raided and you could do absolutely nothing about it, weren't warned, and it was done over a period of a bank holiday meaning they have more time to arrange the undertaking over removing the money from your accounts.
The way its been done is totally indefensible and I simply cannot believe you cannot see this, or wouldn't take offense if this was done to you.
Treating savings like investments is a nonsense. This line comes purely from your distaste for savers. If were going to suggest savers should be treated like investors, perhaps we should to suggest investors should have their assets removed?0 -
HAMISH_MCTAVISH wrote: »Most British residents have lost more than this with the VAT rise over the term of this parliament, and don't even notice it.
This is a tax.
Like any other tax.
It's being noticed because it's being taken in one shot, rather than stealthily over several years, which is the British government's way of taking it.
The key difference though is that quite a few of our purchases are for non essentials and on these items we have a choice about paying that tax. I think the VAT rises have focused my spending and I chose to buy less. I like simplicity and am quite happy to have less 'stuff'. I would be much less happy at having a proportion of my hard earned savings simply shaved off. It has been hard enough to keep pace with inflation with them.0 -
HAMISH_MCTAVISH wrote: »Do you find UK tax raids any less scary, just because they're more stealthy?
Yes probably. I do see where you are coming from and I am certainly not condoning the raids or the stealth. Thankfully MSE has made me much more aware of how to make good decisions about my own money within the difficulties of the wider economic situation.0 -
Yes probably. .
So it's more OK for the UK government to take your money when you have no say in it, just as long as they do it in a less transparent manner.
Interesting.“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0
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