The plan put forth by European finance ministers is to outright confiscate 9.9 percent from any person with a Cyprus bank account with more than €100,000 ($129,000 US). Of course, there are not many accounts holders who have that much cash, so ministers went after everyone else too, demanding 6.7 percent from anyone with cash in the bank.
As you can imagine, there were quite a few people hitting the ATM in Cyprus over the weekend.
In a radical departure from previous aid packages, euro zone finance ministers want Cyprus savers to forfeit a portion of their deposits in return for a 10 billion euro ($13 billion) bailout for the island, which has been financially crippled by its exposure to neighboring Greece.
The decision, announced on Saturday morning, stunned Cypriots and caused a run on cash points, most of which were depleted within hours. Electronic transfers were stopped. …
The Cypriot government on Sunday discussed with lenders the possibility of changing the levy to 3.0 percent for deposits below 100,000 euros, and to 12.5 percent for above that sum, a source close to the consultations told Reuters on condition of anonymity.
Eventually, you run out of other people’s money, and remember … in a liberal/statists view, it’s not your money. Jazz Shaw from Hot Air writes yesterday.
But don’t you worry. It could never happen [in the United States], at least if you listen to Paul Krugman and company. Just keep on running up the debt and I’m sure everything will work out just fine.
Update: The original article mentioned Greece in the headline instead of Cyprus.