Europe setting stage to create a run on Euro banks?

ATMs in Nicosia, Cyprus, Bank Savings RunFrom Australia’s TheAge.com:

In a move that could set off new fears of contagion across the eurozone, anxious depositors drained cash from ATMs in Cyprus on Saturday, hours after European officials in Brussels required that part of a new €10 billion ($12.6 billion) bailout must be paid for directly from the bank accounts of savers.

The move – a first in the three-year-old European financial crisis – raised questions over whether bank runs could be set off elsewhere.

Read that paragraph again, carefully.

A bank in Belgium, a country far away from yours, has declared that it gives itself the authority to wade into your personal savings account in order to pay back a loan your country acquired from the “higher banking authority.”

And anyone wonders why people are raiding their own savings accounts via ATM?

Reuters has more:

(Reuters) – Cyprus’s parliament has postponed until Monday an emergency session to vote on a levy on bank deposits after signs that lawmakers might block the surprise move agreed in Brussels to help fund a bailout and avert national bankruptcy.

In a radical departure from previous aid packages, euro zone finance ministers want Cyprus savers to forfeit up to 9.9 percent of their deposits in return for a 10 billion euro ($13 billion) bailout to the island, which has been financially crippled by its exposure to neighboring Greece.

So let me understand: taxpayers in Cyprus are, following a vote on Monday, potentially to lose 10% of their savings in order to stave off a fiscal problem due to an issue of proximity to a larger debtor nation?

Ladies, this is what you get when you turn your sovereignty over to a larger enterprise.

So let’s just see how this plays out, and how it affects the minds of taxpayers in neighboring countries.

Bank run, anyone?

Bueller?

BZ

 

 

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10 thoughts on “Europe setting stage to create a run on Euro banks?

  1. Poignant, as Bueller was rifling through his entire house “borrowing” money from places like his sister’s purse during roll call in economics.

    It was his ninth absence, and the hapless Dean Rooney much akin to the Republican party set about catching Ferris.

    Ferris has a test that day:

    Ferris:
    ” It’s on European socialism. I mean, really. What’s the point? I’m not European. I don’t plan to be European. So, who gives a shit if they’re socialists? They could be fascist anarchists and it still wouldn’t change the fact that I don’t own a car.”

    …..and there’s the rub.

    Even if readers here don’t care for the movie, per say, you should read the script.
    Ferris: Libertarian
    Rooney: Republican
    Sister Jeanie: Conservative
    Parents: Deceived voters
    Secretary: Reactive govt. worker.
    Cameron: America
    etc.
    It’s a fun exercise to find the subtleties of subversion and how art reflects life & life now reflects art.
    http://www.idiotsavant.com/bueller/script.htm

  2. Starts in Europe and rolls around the world. It can very well happen here.
    I have my Social Security directly deposited into a credit union. Everything else stays in my pocket, so to speak.

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