Raid on bank accounts in Cyprus

[MrsJREwing]

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

"Unearned income in the form of interest and dividends"

In which universe are interest and dividends "unearned income"?

Companies/banks pay you for the privilege of using the money that you invest/deposit in them. That is as "earned" as if you were renting out any other belonging or property.

Handelsblatt link for thoie whose German is up to it!

www.handelsblatt.com/politik/international/brisante-daten-commerzbank-italien-sollte-eine-einmalige-vermoegensteuer-erheben/7931578-2.html

*Flatbread, Clag found it. We should be ok as DC didn't sign, what a relief, he doesn't normally do things I am grarefull for, this time he did.

I think the tax sharing info backs up the posters story regarding the Spanish situation.*

No, there is nothing that Claig found that says that EZ can step in and take money from depositor accounts. The EZ is simply unwilling to backstop the bank guarantees in case a nation state is insolvent. Fair enough

The sharing of information is something entirely different. It is about money laundering and IMO, a good thing. When you open an off-shore bank account, you are informed that the bank is required under an EU directive to share your banking information with the EU. Otherwise how on earth can they stop money laundering without requiring banks to provide transparent information on depositors?

The Spain bit, is simply that some countries tax you on your worldwide income, while others on your domestic income. Nothing ominous there.

The people who are bringing a mansion tax into this as an equivalent comparision are frankly looney. It has nothing to do with it and is not comparable at all.

This puts me in mind of the famous Martin Niemöller quotation.

First they Came....

It might be rewritten:

First they came for the rich peoples' bank deposits and I didnt speak out because I didnt have many savings.

Then they came for rich peoples private pensions and I didnt speak out because I didnt have a private pension.

Then they came to tax rich peoples houses and I didnt speak out because my house wasn't large.

Then they came for what little I had worked for all my life and no one was left to speak for me.

Note that the Commerzbank economist is only speaking hypothetically. He is saying that insofar as it were meaningful for a wealth tax to be raised. So it is hypothetical rather than something that is on the cards.

MoreBetta, lets add some stages, then they came for those on benefits... then they came for the disabled..

Banks have been bailed out and people have paid the price. That is always the way. The elite looks after its own.

This is a very sad situation and the rise of hostility towards Germany is very worrying. This has nothing to do with the German people and everything to do with a power elite.

'One of Europe?s most prominent statesmen has warned that resentment of Germany across the continent is so high that war remained a danger.

Jean Claude Juncker, a long-time president of the European Council, painted an ominous portrait of Europe, claiming there ?chilling? parallels in 2013 with 100 years ago ? the eve of the First World War.'

www.dailymail.co.uk/news/article-2291672/The-demons-sleeping-Luxembourg-PM-paints-chilling-portrait-Europe-draws-parallels-build-WW1.html

'He said only a united Europe was a safe and strong Europe. 'A united Europe is our Continent's only chance to avoid falling off the world's radar,' he added.'

However, I do think that some of this is scare tactics to bring people in line and do as the elite want and hand over sovereignty to the Union.

claig - I entirely agree. In fact many German people do NOT agree either with what is happening and opposition inside Germany is growing the the EU an dteh Euro.

As Nigel Farage has said in many of his famous polemic speeches in the European Parliament the road the EU technocrats are heading down is to war in Europe - the very thing the EU was designed to avoid.

The ominous signs of France being unable to reign in or live with the economic power of Germany over the rest of Rurope is there already. The ultimate ireconcilable rupture between Germany and France will in the end be the final death throes of the EU.

MoreBeta,

It is not all the same. The government can increase income tax, property tax and the like, and have done that frequently. It is legal to do so, you have no contract with the state that your taxes are fixed

But to actually grab a portion of your bank deposit which is guaranteed, is unheard of, and violates the fundamental principle of property rights and sanctity of legal contracts on which capitalism is based.

They can well decide to increase taxes on interest earned on income, but not go after the principal.

If Cyprus were to let some banks go under, and declare insolvency as a state, the bank shareholders and sovereign debt holders would suffer huge losses.

However, none of the pain is being inflicted on these groups. Only on ordinary depositors.

Let us not forget Nigel Farage is married to a German and he has been resolute in his campaign against the power of the EU over peoples lives. He wants a Europe of friendly self determining countries that trade and cooperate on many matters but not a sovereign Europe.

That is my view as well.

Even this bank deposit raid is a scare tactic to frighten millions of Europeans. What the future holds and which way it will go no one knows except maybe the string pullers.

You got it. Cyprus is collecting 6 bn Euros from private bank deposits to scare Europeans. Not because they need it

"In which universe are interest and dividends "unearned income"? "

In the very universe I and you inhabit. Unearned income is anything that isn't a wage...

No, Cote, not quite, try to keep up.
Cyprus are collecting 6bn because they have been told to, which is why their people are protesting against the EU.

Unlike for every other country or bank that has been bailed out, the comparatively small amount of 6bn has been paid by the bailout but has unprecedently been demanded from the people.

It is "shock therapy" and was intended as a message, but you failed to understand it.

"If Cyprus were to let some banks go under, and declare insolvency as a state, the bank shareholders and sovereign debt holders would suffer huge losses. However, none of the pain is being inflicted on these groups. Only on ordinary depositors."

I would imagine that the vast majority (if not all) of these bank shareholders and debt holders also have accounts in the banks of Cyprus, so they will be inflicted as much pain as anyone else.

What most people seem to be missing is that Cyprus needs a lot of money, equal to their GDP, in fact. They have happily found idiots willing to put up most of this money (10 bn Euros) with the condition that Cyprus chips in the remainder (6 bn Euros). How would you suggest Cyprus should quickly come up with this money? There isn't much in Cyprus to sell. Anything else I can think of would squeeze Greek Cypriots for this amount, which they would like even less than the current scheme is stealing most of it from Russians.

I am sure someone has already mentioned this but really there are that many people will 10's of 1000's in there accounts? God I am crap with money.

sorry should have read with not will

Wake up. They need 16 bn. That need didn't just materialise because EU told them to find it.

EU says "We'll give you 10 if you put 6 on the table" and Cyprus is being sneaky by getting most of it from Russians.

Of course Cypriots are not loving it, who would. If they don't want to have banks anymore, they should just let them collapse.

A commentator on BBC The World at One just said that much of the Russian elite have their money in Cyprus, but that the real Russian elite have already moved their money out. The real Russians that will be hit are the mid-ranking ones.

Cote, please study the situation more and you will understand what is really going on.

Cote - Cyprus doesnt need a lot of money.

If it defaults it owes nothing. The entities that need the money are the investors whole hold the bonds of Cyprus and its banks.

The money being put in by citizens bails out foreign bond holders - especially Russians, EU banks and hedge fund investors who all took a risk on the expectaion of a bailout and they got it wrong.

Citizens had no part in this and they should not pay. Their economy will contract horribly and many ordinary Cypriot people will lose their jobs and homes anyway. The country is now being pressured to give up its gas reserves and to take people's saving as well is beyond the pale and citizens have rightly said no way.

No banker would risk a run on banks in the Eurozone and stoke up fear in Spain and Italy which could risk runs that would destroy the Euro for a mere 6bn euros. They probably spend more than 6bn a year on windmills.

They knew what the impact would be and they did it for a reason, not because they couldn't find an extra 6bn.

Beta - There is nothing for Cyprus to default on. This is not about an inability to meet debt requirements (like in Greece).

This is to recapitalize banks whose investments in Greece (i.e. banks' assets) have been wiped off their balance sheets. I said this before (you ignored it).