Fiona wrote:

Well written. I see it as downright theft. They really needed to be above board. All this will do now is ensure that any savings now go anywhere but the banks. How is that going to help?

It isn't. Everyone we've had dealings with are pretty much saying as soon as they can get their hands on their money, they will take it out.

Mmm looks like the Russians are offering to step in and buy one of Cyprus Banks apparently it's cheaper for him to buy the bank that than lose 9.8 % of the total sum he has stashed in it. There may yet be a rescue of sorts. Think they might want the rights to the gas that has been found though in exchange

Doe, I believe that gas field has been promised to at least 3 different countries in its' lifeline so far - and they haven't even started drilling yet!

This measure could de stabalise the whole Eurozone and posibly further, it is likely to result in a run on banks and is possibly the most serious development in the last 3 years.

I believe it's already started.....

And I have a sneaky suspicion it's why our new president put back the discussion in parliament to today when the finance markets would be open again.

It's a public holiday in Cyprus today (Monday) but they've enforced a bank holiday for definite tomorrow with some rumours the banks may not open again for business until Thursday. We shall just have to wait and see.

Interesting times ahead for us in Cyprus.

I think its interesting for more than just Cyprus. Just imagine how many other people in different countries are withdrawing their cash right now. I just can't understand why this was supposed to be such a good idea??

With the rumours about Russian mafia money being stockpiled in Cyprus, no surprise that Putin has protested already!!!!!

Fiona wrote:

No way would I pay the banks 10% to keep my money.

But you already are, it's called tax and duty, yours is not a 'one off', it's 20 % per year!
I'd take the hit of a 'one off ' 6.7%, if it means the country/bank doesn't go bankrupt and I'd lose 100%, especially if I'd been getting ridiculously high interest rates for donkey years earlier.

When you deposit money in a bank offering such high interest rates, you take a risk, just as some Councils and Building Societies found out during the Iceland fiasco.

I see it as downright theft.

I felt the same when Gordon Brown raided at least £100bn from the pension pots of UK pensioners to prop up the benefits of the feckless, who have never done a days work in their lives.

I just can't understand why this was supposed to be such a good idea??

Simple, take the money as instructed by Merkel or no bail out money forthcoming from the great EU bank.

The country is full of tax dodgers, so if it was left as a kind of voluntary assessment/repayment process, how much do you think they would recoup?

How much money do these countries expect from other EU countries without any strings attached or showing some initiative to put their own country and its finances in order?
Why should I feel sorry for people who are tax dodging and getting high interest rates, when my OH is still paying tax at 71 years old, and the British pensioner has one of the lowest pensions in Europe?

brewerdave wrote:

With the rumours about Russian mafia money being stockpiled in Cyprus, no surprise that Putin has protested already!!!!!

I can see all that gas coming down the pipeline costing a lot more, now Merkel has peed off the Russian Mafiosa.

Pay back time has arrived

Sanji

Folk seem to think this has not happened before, is unprecedented, will cause the collapse of things etc.

But I am sure Italy did the same in 1992, because it had got itself into a financial mess and raided its populaces bank deposits.

Far more recently I am sure there was something in Argentina (maybe 2001/2002?) where they were in such a mess they froze everyone's bank accounts for 12 months and only allowed them to take out 200 dollars or something to live on a week I think it was called Corralitito (why do I store such useless information I don't know)

I remember pictures on the TV of the Finance Minister in a Chopper hovering over Buenos Ayres doing a flit while people rioted in the streets.

People forget real quick in most cases and are saying it is unprecedented and will bring down Europe etc, well Italy's still there and so is Argentina.

Opps wave at Sanji we posted simultaneously I think so I haven't read your post.

I have read it now. Payback time indeed, many Country's see the EU as a cash cow and it was bound to come home to roost at some point.

My bank account has been raided by 'quantitative easing' for the last six years.

Sanji
The only people who were getting an extortionate interest rate were those with extortionate amounts of money. The likes of us "normal" people have been getting no interest on our small deposit accounts for the last 3 years. Before that, we were getting between 4 and 6 percent max.

I got my salary (less than 1500 EUR) paid into my account last week. That's what we have to live on as I'm the only breadwinner. They've already blocked my 6.75% contribution out of that amount. Some workers here take home less than 800 EUR a month so in proportion - it's a lot to lose if that's all you have and have learned to live within your means.

Maybe we should just all deduct a nice round 7% off our extortionate electricity bills that were hiked up to pay for the Government allowing the one and only main power station to be blown up from badly storing old explosives alongside it the sun for 3 years in 2011?

That would be pay back I suppose....

Thank God we don't pay tax on earned income in Cyprus (at the moment anyway) for earnings of less than 19,000EUR per annum. That's not tax dodging, those are the laws of the country. Why do you think there are so many retired expats living in Paphos?

I'm not retired. I will be 55 this year so still have a long way to go....

With any luck Shell they may take people with small deposit balances of say €50,000 or less exempt. It does seem like an ill thought through plan or rescue mission or whatever they are calling this "haircut'.Perhaps that is why they keep extending this bank holiday? It seems to have gone from one day to two days and now seems to be three days.

I can't beleive the Cypriot Government would want to hit people with small savings balances that they have acquired over decades. I think that is why there is so much outrage, if they could be lifted out of the scheme it might be a bit more palatable.

The news articles all refer to "savings" accounts, but (as of now - it could change) it is ALL bank accounts that are proposed to be "levied".

It does say savings but most Laiki bank accounts are classed as savings account as very few have current/cheque accounts.

Our funds have already been blocked for the amount as we could see from our online banking account on Saturday morning just as news was breaking and before they stopped access to online accounts. That's where my salary goes, it's not a "savings" account and accrues no interest.

Now, there is some talk of only putting the levy on accounts above 100k but in the same breathe we heard the Russians have offered 20 billion, which means no bailout from the Troika but they want our gas.

So, by the end of next week - our little island may be called: Cypruski

Flashing up on Sky news- that there's now a draft bill proposing scrapping the levy for those with less than 20,000 euros- voting this afternoon.

This will create a shortfall of the 5.8 bn they have to find.

Sanji

Cyprus voted a resounding "No" last night to any part of the levy.....

I suppose that means the banks will stay shut indefinatly then with no bail out........

im suprised they voted no in one respect as now nobody knows what the future holds for them, i guess the leader will look to Russia.

What a mess the euro and the EU is.

There has been no bank run in the other Southern European countries, such as Spain, Italy etc like Cyprus expected there to be and like I think they hoped would happen (wishing their own misery on others perhaps) maybe they over estimate their importance in the eurozone........

The other thing I find unbeliveable is that Europe never mentioned taking tax from those with under 100,000 euros, it came from the Cypriot government, why on earth would you want to screw over your 'own people' at the expense of a load of Russian millionares, or even Cypriot millionaires for that matter?

Sound like hes not really a peoples person.

Have I missed something?....but do the Cypriots withhold any tax on income generated by these accounts currently? If not -why not? We pay 20% (or more) on the interest on savings in this country and as far as I'm aware other EU countries tax earnings on savings in some shape or form.

I think they have a far higher tax free allowance on earn't income than any one else, they can earn 19,000 euros a year before they have to pay tax, so that means loads of average paid workers dont pay income tax at all. Here we pay it on everything over £8000 I believe, although after today it (hopefully) may be £10,000 a year which would help a lot of people who are actually making the effort to work (rather than be on benefits) but are on a low salary.

Not sure if they pay tax on their savings but once again it would only be once they earn over the 19,000 Euros so a much higher threshold than many eurozone countrys.

It's a kind of tax haven for people with a middle income, no idea what's in it for the Russians maybe it is considered to be an 'off shore' account for them and so they get to keep all of the 5% on their billions.

I think this is why it is very attractive to a British Pensioner as they get to keep all their pension up to that limit whereas in the UK for example they would be paying tax on anything over and above £8000 at 20p in the pound, or maybe 25p in the pound - I lose track.

Perhaps they also have some accounts that are tax exempt so they get to keep the 5% who knows, perhaps Shell does?

Under the dual tax agreement you can choose to pay tax locally in Cyprus or in UK, it's up to you.
Cypriot residency has some plus points in that respect for those as you say in a middle income bracket.
For instance my basic salary is 1500 but reduced as I negotiated a half day off each week with my CEO a couple of years ago, that's slightly less than I was earning in UK but I come home with more in my pocket each month.
Even with only me working we're a little better off financially than when both of us were working in UK because of the lower tax rate and we have no obligatory bank/car loans like we had back home.
No need to have all the latest gadgets and gizmos or big tv/satellite package because we spend less time indoors and we socialize with friends more than back home.
The savings on council tax alone is one of the reasons others who are not working come to live here as it will cover for private medical insurance for those who don't fall into the free medical care bracket.
However, we do have the highest electricity prices in the EU and I think Malta is close second. (We paid our last bill not so long ago and it was around 300 EUR for 2 months). Internet services are also quite expensive in comparison to speed and choice in other countries - we pay around 72 - 75 EUR monthly for phone calls, landline connection, internet service/broadband connection at 12mbs and TV package, which is basic channels (BBC Entertainment/Discovery/SkyNews). Our water bill is around 36 EUR each quarter and the refuse collection is twice weekly for not much more. No TV licences here either.
As far as I'm aware there are no tax exempt accounts. The Russians brought a lot of black market money into the country many years ago and it's been coming ever since with no questions asked and lots of money means it can go into high interest accounts... I wish I had one of those!