The banksters are getting desperate. The IMF today took an unprecedented step to grab bank depositor money.
In a new plan to bailout the government of Cyprus, under the watchful eye of the IMF, depositors in Cypriot banks will be hit with a one-time tax on their savings, as part of a €10 billion ($12.96 billion) bailout.
In a deal, announced early Saturday, accounts with more than €100,000 will be taxed at 9.9%, those with less at 6.75%, raising an expected €5.8 billion for the near-bankrupt nation.
Cypriot Finance Minister Michalis Sarris said the Cypriot Parliament would adopt the taxes over the weekend and the money would be extracted from accounts before banks take up business Tuesday. Monday is a public holiday.
According to WSJ, the IMF was the strongest advocate for having the bailout burden fall partly on depositors.
This is an extremely bold move to prop up a government and the banksters that loan it money. It could cause bank runs in country's with shaky finances. It also signals very clearly the importance of keeping some money in a form that can not be easily grabbed by the establishment in panic. Think gold, silver, nickels and bitcoins.
WSJ is reporting:
Nervous depositors in Cyprus rushed to ATMs Saturday to drain their accounts following a bailout agreement with international creditors that includes a levy on all the country's bank accounts.
Lines formed at many ATMs as people scrambled to pull their money out after word that the €10 billion ($12.96 billion) rescue package Cyprus agreed with its euro-area partners and the International Monetary Fund included a one-off levy on deposits.[...]
Cypriot bank officials said that depositors can access all their money except the amount set by the levy.
But that hardly assuaged people who continued to withdraw cash from ATMs until the machines ran out, unsure what or how much would be taxed. Officials said that withdrawing funds on Saturday wouldn't reduce anyone's levy.
The country's cooperative banks also shut their doors after depositors scurried in hopes of protecting their savings. Unlike commercial banks which remain closed on weekends, cooperative banks customarily open for business on Saturday.
The cooperative banks, which represent about a fifth of the island's banking sector, remained open only for a short time. However, people continued to have access to their funds through ATMs.
Picture of Cyprus ATM, which reads: "We apologize, we are facing difficulties"
|Pic via Yiannis Mouzakis|
Line outside another Cyprus ATM
|Pic via Yiannis Mouzakis|
#Cyprus, various reports that ATMs are drying up
— Yiannis Mouzakis (@YiannisMouzakis) March 16, 2013
UPDATE 5 (via Travis Holte)
The Belfast News reports:
News of the levy came as a shock to most people following strict assurances from Cyprus' President Nicos Anastasiades that he would not accept a deal which required depositors to share in the losses. Government spokesman Christos Stylianides said Cypriot officials had resisted intense pressure to accept a deposit levy of a whopping 40%.