As part of a financial aid package from the European Union, Cyprus is being asked to confiscate up to 10 percent of bank deposits.
Cyprus’ savers bear brunt of unprecedented bailout
The euro zone agreed on Saturday to hand Cyprus a bailout worth 10 billion euros ($13 billion), but demanded depositors in its banks forfeit some money to stave off bankruptcy despite the risk of a wider run on savings.The eastern Mediterranean island becomes the fifth country after Greece, Ireland, Portugal and Spain to turn to the euro zone for financial help during the region’s debt crisis.In a radical departure from previous aid packages – and one that gave rise to incredulity and anger across the country – euro zone finance ministers forced Cyprus’ savers to pay up to 10 percent of their deposits to raise almost 6 billion euros.Parliament was due to meet on Sunday to vote on the measure, and approval was far from assured.
The vote now has been delayed to Monday.
An interesting aside, approximately one-half of Cyprus depositors are Russians, as Cyprus is considered a home for money laundering from the former Soviet Union:
Europe’s response: this is a unique situation. Just like the Greek bailout was unique; just like the Irish and Portuguese bailouts were unique; just like the bailout of Spanish banks was unique.
Could it happen here?
(Poll open until midnight tonight)
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