Quote:
Originally Posted by Chris
Actually, what people are asking for is equal treatment. The EU bureaucracy *tried* to expropriate savings below the guarantee threshold and only the intransigence of the Cypriot parliament prevented them doing it. As it is, what was arranged for Cyprus was not on the same terms as had been applied elsewhere, such as in Ireland, and completely failed to acknowledge that the banking collapse in Cyprus was in no small measure brought about by the debt haircuts imposed on Greece's creditors by that same EU bureaucracy - Cyprus being a major creditor, seriously exposed to the disaster in Greece.
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I am not 100% convinced it was the EU who demanded that people have savings under €100,000 were liable, it seems unclear on if they simply gave the Cypriot Government the amount they should raise and it was they who decided where from. Either way that was a stupid move and it's good it didn't happen in the end.
I don't disagree with anything else you've said. It was unfair. It's the nature of the beast the the timing of the collapse. The EU were less bothered about Cyprus because them leaving the Euro wouldn't have been as damaging as some of the other countries. Additionally other Eurozone nations were less exposed to Cypriot debt. Combine that with the impending German elections, bailout fatigue amongst the German people, the amount of Russian money in the country along with their weak position in negotiations and you have what happened.
One of the telling incidents during the whole affair was Russia angrily protesting about the EU and then deciding not to help Cyprus either. If the Russian Government does want to be seen to be helping Russian tax-dodgers, as it would be spun, then Germany certainly isn't.
My only problem is when people simultaneously have a pop at Germany for getting involved and issuing the bailout whilst condemning them for taking, by which they actually mean not giving, the money from people's bank accounts. What miracle solution was there that would have allowed all deposits to be protected without intervention from the EU?
That's less common. What is common is the complaint that a precedent has been set. That next time a country/bank is in trouble people will run to take their money out because it may not be protected. As if prior to this the rumoured, let alone imminent, collapse of a bank would not have been greeted by an army of panicked depositors trying to take all their money out.
The EU have never promised to back all deposits. Their only consideration was always going to be about how much it damages the rest of them. If you go into that with a weak hand then you're screwed.