Cyprus Bailout Calls For up to 40% Seizure of Bank Customer Cash
Cypriot President Nicos Anastasiades has struck a deal with the European Union and International Monetary Fund that will seize up to 40% of uninsured funds from wealthier depositors with over 100,000 euros and will not siphon funds from those below that amount.
The 10 billion euros ($13 billion) bailout plan calls for the Cyprus Popular Bank to be dissolved and all its viable assets transferred to the country’s biggest bank, Bank of Cyprus.
Presently, Cypriot banks have imposed a 100 euros ATM withdraw limit, and Cyprus border officials at air and sea ports have been ordered to confiscate the funds of any traveler attempting to leave with over 10,000 euros.
Russian depositors stand to lose out big from the deal, as an estimated 20 billion euros of the 68 billion euros in Cypriot banks belong to Russians.
Russian Prime Minister Dmitry Medvedev blasted the Cyprus bailout and said, “In my view, the stealing of what has already been stolen continues.”
The newly announced terms of the Cyprus-EU bailout deal are far worse for wealthy investors than previously reported and far better for smaller investors. Initially, the deal would take a one-time “tax” of 9.9% for bank customers with more than 100,000 euros, not the up to 40% brokered in the deal. Investors under the 100,000 euros mark initially would have 6.75% of their holdings seized, but now they will have no funds taken.