Quote:
Originally Posted by Sirius
But the point is that it has now set a precedence and it seems they intend to do it again next time a bailout is needed.
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Yes but I think this point has been overplayed. This is no different to any other bank runs, including here with Northern Rock. If your bank is in trouble you're going to want to take your money out. There is a precedent for bail-ins now but the EU have never promised that more than the first €100,000 would be protected. The initial mistake was appearing to apply the bail-in to people with less than that, breaking the promise, but they backtracked on that.
The situation is the same as before. If a bank collapses you may not get all your money back. The problem with Cyprus is that it's being portrayed as a raid on the banks to bailout the Government rather than a bailout of the banks themselves. It's important to remember it was the banks, and therefore their customers' money, that were about to fall.
What people are asking for when they complain about the bail-ins and precedents is not that the EU intervened but that they didn't intervene enough. They wanted Germany/EU to increase the bailout money.