Monday 18 March 2013

and that’s a pretty nice hair cut—charge it like a puzzle, hit men wearing muzzles

Oh dear—this is a potentially disturbing development that is making international markets anxious as well as any and every John Q. Public, Max Mustermann, or Τάδε Ταδόπουλος who’ve brooded any nest-egg. In exchange for a ten-billion euro lifeline to save the country from insolvency, banking and finance accounting for a large proportion of the island nation’s economy, European Union finance ministers are demanding a percentage of the savings deposits of Cypriot citizens.

The government of Cyprus supports this hair cut, which would excise a minimum of a three percent from all accounts. Despite insistence that such an arrangement exceptional and not precedent-setting, with Germany trying to distance itself from the conditions of the swap and Britain going so far as pledging to reimburse the losses incurred by her subjects stationed there as a result of the decision, many are growing nervous about their stashes, however it’s kept. Do you think a move like this opens up the possibility for shearing assets from private people, small-holders but share-holders, nonetheless? Or might having savers participate in the bail-out might inspire overall more pragmatism?  It is happening too often lately, but when decisions and support fail to abide by economic sense (I can’t imagine how the reactions and distress in the streets and in the bourses was unexpected), one should always follow the money and see who stands to gain, and perhaps not ultimately, from this deal.