this new plan is ridiculous, unfair and can possibly shake the financial world to its core.
Its not a new plan. Until 5 years ago only 20K Euro was protected in banks. Many banks have failed before and depositors lost any amount over the insured amount, all over the world.
Giving depositor 100% protection is exceptional and unusual. It is NOT a legal requirement by EU law or US or other countries laws.
Infact the insurance scheme is run by the financial system of the country hosting it – banks, insurance companies etc. The Government MAY lend to the scheme and the financial industry repays the payout over the following few years – this is what happened with Icesave and Northern Rock in the UK.
However, it is not a EU requirement for a government to bail out its own banks, never mind other countries banks.
In the case of Cyprus they took in deposits 7x their GDP, gambled it on Greek bonds and made them selves very rich in the process.
When their gamble failed they demanded the EU refund them in entirety.
How more communist can you get?
this ‘bail-out’ plan is an attempt to begin tapping-into money being ‘laundered’, and like the misguided imposition of austerity measures,
How can I make it more clear; the Cypriots lost the money by gambling it. The EU/IMF is GIVING them 10billion, not taking it away.
EU membership encouraged member state bond buying and investment in national projects .
They didn’t encourage gambling 20billion euros on Greek bonds because they gave a 25% yield. Cypriots didn’t invest in national projects, they bought Mercedes and gave themselves million euro pensions.
It was the Euro group who insisted on Cypriot depositors haircuts.
No, it was – apparently – the IMF who suggested it and the Cypriots thought it was a good idea. The general public now realize it was a catastrophic mistake to reject the 6.5% haircut. Standard EU law has now been applied and everything is legally correct.