This, if I am understanding it correctly, is the craziest thing I have ever heard:
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 decision prompted a run on cashpoints, most of which were depleted by mid afternoon, and co-operative credit societies closed to prevent angry savers withdrawing deposits.
I’m not sure how you all would handle this, but if someone told me that they needed to take percent of my personal savings to pay for the sins of the international banking community and the eurozone, I would probably lose my mind. I’m all for increasing taxes when need be, but basically robbing people to shuttle cash off to austerity mongers in Germany seems like the kind of thing that would cause people to break out fifes and tri-corner hats.
And from a policy standpoint, isn’t hitting individual savers the absolute worst policy imaginable?