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Published on March 18th, 2013 | by Pete

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Cyprus crisis – Governmental pick pocketing?

Those of you who watch the news will probably have heard about this by now. If you have not, allow me to briefly bring you up to speed. Basically, Cyprus ended up in a massive sized financial pickle, meaning that it requires a 10bn-euro ‘bailout’ ($13bn; £8.6bn) by the rest of the Eurozone to avoid financial collapse.

This of course comes with a number of strings, and one of them is that Cyprus enforces a one-off levy, to be paid for by all bank customers in Cyprus, which led to panic amongst residents, and heavy cash withdrawals. Under the currently agreed terms, depositors with less than 100,000 euros in Cyprus accounts would have to pay a one-time tax of 6.75%. Those with sums over that threshold would pay 9.9%. Members of the European Central Bank governing council, such as Joerg Asmussen, seem largely indifferent to the plight of the Cypriots: “If Cyprus’ president wants to change something regarding the levy on bank deposits, that’s in his hands.” German government spokesman, Steffen Seibert was equally unmoved, saying: “How the country makes its contribution, how it makes the payments, is up to the Cyprus government.”

I don’t know about you, but this just seems plain wrong. Those Cypriots who have diligently saved and managed their money as well as they can are being punished for the mistakes of other people, who are of course likely to be earning much more then the average Joe Public is. On the other hand, perhaps the people should be held partially responsible for the decisions of democratically elected Governments? I don’t profess to have all the answers – I just think the situation sucks and I feel sorry for hard working ordinary people. What do you think? What would you do if the same happened in the UK?

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