Early Monday morning Cyprus’ leaders reached a deal with the EU, the European Central Bank and the International Monetary Fund. Cypriot bank accounts exceeding €100,000 will be taxed (at around or less than 30 percent). In exchange for the move, Cyprus will receive €10 billion from the EU. And the island’s second largest bank, Cyprus Popular Bank (also known as Laiki Bank), will be shut down. Investors with less than €100,000 are safe at this time.
The funds skimmed off depositors’ accounts (approximately €4.2 billion) will be used to pay Laiki’s debts and recapitalize the bank. Russian Prime Minister Dmitry Medvedev reacted strongly over the measure which largely affects high-dollar Russian investors: “The stealing of what has already been stolen continues.”
Tyler Cowen at Marginal Revolution makes a few sobering observations:
Tyler offers some more analysis, here.
Notice to Readers: The American Spectator and Spectator World are marks used by independent publishing companies that are not affiliated in any way. If you are looking for The Spectator World please click on the following link: https://thespectator.com/world.