The specter of default has reached the shores of Cyprus, the latest country in the Eurozone to require an EU bailout in order to stay afloat. The island nation in the eastern Mediterranean has one of the smallest economies in the Eurozone, but, because of close financial ties to Greece, its finances have been on the ropes since the Greek debt crisis began.
Now it’s time to pay the piper — and Cypriots are shocked at the price to be exacted by the international banking cartel. In a deal hammered out in Brussels last week and announced by Cyprus’ president Nicos Anastasiades, the government was planning to confiscate 10 percent of all savings in bank accounts holding more than 100,000 euros, and 6.75 percent of all savings from accounts having less than that amount. It was necessary, Anastasiades assured Cypriots, in order to prevent the “catastrophic scenario of disorderly bankruptcy.” As compensation, accountholders in Cyprus’ banks are being issued shares supposedly equivalent in value to the money being confiscated.
But the people of Cyprus aren’t buying it. When the measure was announced, throngs of shocked Cypriots lined up at banks and ATMs to withdraw their money, only to have the banks close their doors and switch off their ATMs. One angry Cypriot threatened to break into a bank with his bulldozer. As one British expatriate in Cyprus, whose retirement savings are about to be looted, told the BBC, “This is robbery and we must get the EU to stop this. We retire and bring our savings to a bank in Cyprus and they can just take our money away without permission and then say we have shares in a bankrupt bank.”
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Photo of protesters against the EU in Nicosia, Cyprus, March 18: AP Images