Sunday 23 July 2017

Jim Power: If this legalised robbery is fair game for Cyprus then what next?

A protestor holds out her hand during a protest outside the parliament in Nicosia, Cyprus
A protestor holds out her hand during a protest outside the parliament in Nicosia, Cyprus

Cyprus is a country with a population of around 862,000 people and has an economy that accounts for just 0.2pc of eurozone GDP. So in the overall scheme of things, Cyrpus is tiny – but over recent days, the symbolic importance of the country has become massive and the European Union-backed response to the problems in the country have sent shockwaves across Europe and indeed the world markets and populations.

The Cypriot economy is on the brink of bankruptcy and, in order to avert such an eventuality, an agreement has been reached, with the backing of the EU, to impose a once-off levy of 6.75pc on deposits under €100,000 and 9.9pc on deposits over €100,000.

This is the first time in the eurozone crisis that personal deposits have been hit in this manner. Not surprisingly, this has elicited a very negative response within Cyprus, but more pertinently, it has justifiably scared the living daylights out of every personal depositor across the eurozone.

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