Raid on bank accounts in Cyprus

[MrsJREwing]

Nearly 10% of savings will be taxed from private individuals savings, to save the banks.

[claig]

And as someone above said, the money that they have given is a loan
They will get it back with interest, but they still want to rob ordinary people who had nothing to do with it, as they take full control of Eurozone countries' finance through the emergency loans needed to bail these countries out.

It is a win-win for the elite and a lose-lose for the people.

[CoteDAzur]

Do you have this sort of property tax (based on current valuations) in the UK?

There is something similar to this in France but depends on individuals' "honest" declarations of what they think their properties are worth. Needless to say, these are rather understated.

So now they have cooked up another plan - On secondary properties, you pay tax on an imaginary income of several times an imaginary rent, as if you were renting it out. They are going after English property holders in particular, I hear.

[edam]

The European Union is a completely different system to the way we practise democracy as a nation in the UK. New legislation is largely proposed by the bureaucrats - the European Commission - not by politicians, although the Council of Ministers (representatives of national governments) can tell the bureaucrats what areas to investigate. So the bureaucrats have a lot more power than in the UK, where the convention is civil servants merely carry out the will of elected ministers.

At every level there's a lot of horsetrading that goes on that is quite remote from ordinary citizens - which makes the EU quite undemocratic and enables bureaucrats and national governments to get away with stuff (like throwing out the then governments of Italy and Greece) without bothering to ask the voters.

The European Parliament can in some limited circumstances throw out certain legislation, or amend it. But it works in blocs of parties that share interests but can be very different - that's why Cameron took the Tories out of the bloc they had been in until he became PM. But he was thought to have behaved stupidly as it meant the Tories were not part of a particularly powerful alliance any more.

With the Council of Ministers, to some extent representatives from each national government fight their own corner - but they can also get away with stuff that their own electorate would not necessarily back, particularly in Britain where scrutiny of European politics is quite limited.

European bureaucrats will tell you quite proudly that it's all very democratic because they consult 'stakeholders'. I'm uncomfortable with this - of course governments should consult relevant organisations when considering legislation that affects their areas of operation, but it can all get far too cosy. They are supposed to serve the people, not special interest groups.

And it's the bureaucrats who decide how much weight to give to the different interest groups - I know the General Medical Council protested quite loudly about proposals to extend the right to work anywhere in the EU to doctors, because medical education and health services vary so much - most countries don't have GPs in the way we do (apart from Denmark) for instance. The EU went ahead anyway, so we ended up with a German doctor who had mostly done cosmetic surgery coming over here to do out of hours GP shifts and killing a British patient within his first few hours on our soil. Given that German doctors of his type don't usually deal with morphine. It was the EU that stopped the UK testing the language skills of EU doctors - so potentially Australian GPs who speak English as a first language have to sit a language test, but Spanish doctors don't. Although I think there's been some negotiation there and the GMC is now looking at (or has decided they might have the power to) introduce a language test.

We also have a problem with medical devices and the EU. A device can be approved in one EU country that has a remarkably lax approach, and then it is automatically available in Britain - and tbh our arrangements for licensing and tracking the safety of medical devices are nothing to write home about, but it doesn't help when manufacturers can shop around for an original licence from a country that isn't going to look too carefully.

[flatbread]

I am not sure hat you mean, but the only annual property tax in UK is council tax.

It was set in 1991 and has 8 bands or so, from A to H.

H, the highest band, is for properties over £350,000 or so and the property tax on all properties valued higher than that isroughly £2,500 . And you get a 25% discount as a single person.

So if you have a £500k or a £5M home, you pay the same annual property tax of approx £2500.

[claig]

People say the Euro will collapse, but I don't think it will. I think it will eventually become the next reserve currency.

The European Union is all about centralization of power and that is what the powerful want, so that laws and regulations will be the same across 350 million people. That is why it will succeed and why UKIP are sometimes called nutters etc. because national sovereignty is not what the power elite want.
It is much easier to control 350 million people centrally with a common law than to let every country do as they please.

The bankruptciies of Eurozone countries enable the elite to gain control of the financial policy of these countries and install their own technocrats. I think these are short-term troubles. Once full centralized control of finances has been achieved, then the Eurozone will grow stronger again.

What we have to worry about is, what will happen to us? Because there are people who want us to join against the will of the people.

[CoteDAzur]

I was referring to the proposed "mansion tax".

[flatbread]

And it is also regressive in that the bands are too tightly grouped, with not enough increase in tax between these.

The lowest band A (properties under £40k) people pay £850 a year.

So someone in a grotty 450 sq foot one bed in a crap part of town pays £850 a year, while another person in a 3000 sq foot £3M home pays £2500 a year.

The difference in home size and value could be 60 times, but property tax is only three times as much.

While if we had a flat .5% property tax, the person in the one bed (now worth £100k) would pay a £500 a year, while a person in the £3M home should pay £15,000 a year.

[MoreBeta]

There are discussions going on tonight in the EU to stop the confisctaion of any money on acocunts under Euro 100,000.

The confiscation will fall more heavily on people with accounts over Euro 100,000 and bond holders .... BUT there is a big problem

Many wealthy Russians have money in Cyprus and Russia itself has loaned money directly to the Cyprus Govt. Russia has said it will write off the loan if it is granted access to a large gas reserve off the Cyprus coast. There is geopolitics mixed up in this.

Russia via Gazprom dominates the supply of gas to Europe and may relatliate by cutting off gas if the EU allows Cyprus to just default on its Russian loan and confisctaes the deposits of wealthy Russians.

[flatbread]

Ah , a mansion tax in its original form is a 1% annual tax on properties over £2M

The idea being that in the lowest band A, people are paying roughly 1% of their property value in council tax

But in highest band H, a person with a home worth £2M is only paying 0.1% of their property value in council tax.

So effectively it is a higher rate of property taxation on lower value homes and is thus regressive.

[claig]

'Russia via Gazprom dominates the supply of gas to Europe and may relatliate by cutting off gas if the EU allows Cyprus to just default on its Russian loan and confisctaes the deposits of wealthy Russians.'

Wow.


What is also interesting is that apparently Russia had stumped up a few billion for the Cypriot bailout alongside the EU, and this is unprecedented that Russia should participate in an EU bailout.

[flatbread]

And to add, in the US the average property tax is approximately 1% of the home's value.

So it is not unreasonable to use a similar metric in UK. No actually think it should be applied across the board, not just to properties over £2M. (why should properties worth £1M not pay £10,000?)

As a percentage of income, it would probably be no more than 8%, assuming that someone who can afford a £1M home must be making at least £120,000 a year.

Again, in line with what homeowners pay in US. (but in US , homeowners get tax relief in the form of interest payments being tax deductible, but that is a different issue)

[flatbread]

Sorry, some random iPad autocorrect, but you can get the gist

[claig]

But do the people have any real say? Only if they vote for parties like UKIP who want to leave the EU, will it be the end of the EU. They won't vote for UKIP in large enough numbers because the media often paints them as nutters and even racists in order to put the people off them.

I thought this might happen. Apparently there are suggestions that Russia might want use of a naval base in exchange for bailing Cyprus out. The unprecedented step of Russia participating in an EU bailout at all was very significant.

I doubt the EU will want Russia to use a base there.



'It is also rumoured that the Kremlin is privately offering to help bail out Cyprus in exchange for the right to use a naval base in the Greek part of the island.
Moscow has already handed over £2billion to prop up the economy of Cyprus and is now in talks to restructure the assistance programme.'


www.dailymail.co.uk/news/article-2295507/Will-Russia-try-seize-foothold-Med-Energy-giant-offers-restructure-banks-exchange-gas-exploration-rights.html

[claig]

In fact this is starting to look as if it may have been a deliberate move against Russia. Tensions between Russia and the Eu may rise as a result




President Vladimir Putin called the decision to seize money from savers? bank accounts as ?unfair, unprofessional and dangerous?.

Russian Prime Minister Dmitry Medvedev said the eurozone decision seemed to be aimed at confiscating someone else?s property.

?This practice, unfortunately, was well-known and familiar in the Soviet period,? he said.


Cyprus ranks as the largest source of foreign direct investment into Russia ? money that is largely Russian in origin and passes through Cypriot banks before being sent back to Russia.

Russia?s Finance Minister Anton Siluanov also condemned the move and said the eurozone?s decision that Cyprus should introduce a levy on bank deposits was taken without consultations with Moscow.

www.dailymail.co.uk/news/article-2295507/Will-Russia-try-seize-foothold-Med-Energy-giant-offers-restructure-banks-exchange-gas-exploration-rights.html

[claig]

Interesting that Cyprus has recently been found to be sitting on natural gas fields off its shore worth billions. Ties up with the Gazprom link.

However, the Turks could possibly be used to throw a spanner in the works as so often where Cyprus is concerned.


'Turkey, which has occupied northern Cyprus since 1974, will not hesitate to use its naval forces to thwart Cyprus's hunt for hydrocarbons, according to recent Turkish media reports.

But analysts do not expect the Turkish warnings to escalate beyond rhetoric. James Ker-Lindsay, an expert on the region at the London School of Economics, said: "Turkey talks tough with Cyprus on this energy issue, but they've been told clearly by Brussels and Washington not to stir it up."


www.thenational.ae/news/world/europe/mediterranean-gas-finds-have-cypriots-dreaming-of-riches

[claig]

It looks like there may be a battle for control of the gas between the EU and Russia, and it looks like Turkey may not figure in it due to shifting alliances and EU aims.

'The deterioration of Turkish-Israeli relations and the resumption of aggressive rhetoric and measures by Turkish officials towards Greek Cypriots have brought Israel and Cyprus (and beyond it, Greece) closer, making the Cyprus-Greece corridor the most likely route for Israeli energy exports in the future. The changing alliances were further confirmed by two significant visits paid by Israeli Prime Minister Benyamin Netanyahu to Greece (August 2010) and Cyprus (February 2012), two countries which, for long, enjoyed close relations with Arab middle-eastern countries while maintaining minimal relations with Israel. During a recent visit by Greek Defense Minister Panos Panagiotopoulos to Israel, the idea of an involvement of the Greek navy in the protection of energy installations was discussed. The implication of an EU country in securing these installations would not be surprising given that the development of the fields is expected to be a priority for Europe whose domestic gas demands will continue to rise, making the discovery of reserves in the waters of an EU-member state (Cyprus) highly important in its quest to lessen its dependence on Russian gas. Europe would seem like the most obvious partner, but economic hardships may force these countries to look for alternative partners. Enter Russia, which maintains very good relations with Cyprus and Greece, and even Israel. Moscow has made it clear it is interested in the gas potential in the eastern Mediterranean.'


Cyprus, heavily exposed to the Greek crisis and in need of cash, particularly since it has been excluded from international capital markets, initially sought the EU?s help but, once rebutted, turned to Russia, with which it enjoys solid ties, for a ?2.5 billion loan. The country currently presiding the EU is eyeing a further ?5 billion in loans. Russia is particularly interested in the island?s resources and several of its companies are competing for licenses, leading many in the EU to voice concerns over the likely strong influence Russia is expected to have on the Cypriot gas sector



www.mestrategicperspectives.com/2012/10/22/eastern-mediterranean-will-gazprom-advance-russias-influence-in-the-region/

[claig]

So for such a relatively small amount of money and given that Cyprus stands to earn billions from gas in the future, to take the unprecedented step of taking money from bank deposits, which are mainly Russian, does look as if it may have been aimed at Russia.

[PigletJohn]

Well, that's an interesting way of looking at it "taking money from bank deposits"

If I have a deposit in a bankrupt bank, which is unable to repay its depositors, I am at risk of losing some or all of my money.

If some external group is willing to generously shovel in millions to prop up the bank, with the result that I get over 93% of my money back, have they "taken" my money?

[flatbread]

Well, Piglet, there is bank deposit guarantee scheme of upto ?100,000, underwritten by the government, even in Cyprus.

Typically, if a bank fails, then bondholders get zilch, assets are sold and the depositors under ?100,000 compensated in full by a combination of government funds and bank assets.

In this case, the depositors are being put first on the line to take bank losses. This is unheard of. The whole reason you put money in the bank is because you think the principal is safe, with interest rates close to zero, there is no earning on that money anyway. If it isn't safe, you might as well hide your money under the mattress.

Also, there are some stable banks and building societies who are not in the same precarious position, but nonetheless, people who have deposits there will lose portion of that as well, to fund the bail-out of he two biggest banks.

[claig]

No you're right PigletJohn, if they renege on deposit insurance, that's perfectly OK, they haven't taken your money, they're just borrowing it.

The UK government had to bail out Northern Rock, Lloyds and RBS. Would it be OK if they did that by taking 7% or 10% of your life savings? You're obviously richer than most of us or more generous.

The Daily Mail reported on a man who had sold his property in London for about £350,000 and was moving to Cyprus. He put that money in a Cypriot bank as he looked for a property in Cyprus. He stands to lose £35,000.

I think they are "taking" his money and I ddon't think they have a right to it.

[flatbread]

Yes, Claig, and to save Northern Rock or RBS, they took upto 10% of all deposits across all banks, including your deposit in, say, Nationwide or HSBC.

Is that fair? Is that even legal???

[flatbread]

I totally agree with you Claig, on this one. Just surprised there isn't more Eurozone anger and bank runs as a consequence of this dangerous precedent.

[claig]

Exactly, flatbread. As the Greek economist said on Newsnight last night. They bailed out Dexia bank for 100 billion euros and no one lost deposits. Here they want a mere 6 billion euros and they have broken trsut in the banking system by breaking the deposit guarantee scheme. They told the people that deposits under the scheme were guarantedd and then overnight on a bank holiday and over a weekend they reneged on their word and ATMs have run out of money and the bank holiday has been extended until Thursday.

The fact that they did this for such a relatively small amount of money indicates that it is about something more than the 6 billion. I think it is about Russia.

Littlejohn has this to say in today's Mail


It?s a brave man who decides arbitrarily to confiscate a Russian wise-guy?s bank deposits. Most of the hyper-rich former Soviets swanning around the Mediterranean have close links to Putin and whatever the privatised KGB calls itself these days.
We could be talking poison umbrellas here, as a basis for negotiation. Does the name Alexander Litvinenko not ring any bells in Nicosia? I bet the Cypriot President hasn?t been daft enough to entrust his own pension to the Banko Kleftiko.
And never mind the Russians. In the old days, foreign politicians wouldn?t have dared to steal from the British Army.
Just imagine if a band of brigands had descended from the hills and tried to hijack a wages van bound for a British base on Cyprus.

They?d soon find themselves staring down the barrel of a Browning.
So what makes the Cypriot government think they can get away with robbing British soldiers? bank accounts? And why isn?t there more outrage from our own Government?
Those of us who warned against joining the euro were rubbished as neanderthal Little Englanders intent on standing in the way of progress.
But this is how it ends, with politicians stealing your life savings.


www.dailymail.co.uk/debate/article-2295454/Kebabbed-Banko-Kleftiko.html

[MrsJREwing]

Voting UKIP won't change anything regarding the EU ability to raid private bank accounts, they treaty was signed early last year, it's done, no law in each country can overturn it as each country changed their local law to accept the ratifucation and EU law is above each individual member states law.