Some thoughts on German politics and the saver’s tax in Cyprus

Yesterday morning, I wrote a comprehensive post on the Cyprus bank deposit bail-in. Go there for the details of the bailout package. I want to expand on that here today with some thoughts on the politics.
The latest news out of Cyprus is that the Cyrpiot government has delayed the vote on a bank bailout and savers tax by one day to Monday and that it has also extended the bank holiday from just Monday to Tuesday as well. Reports are that the votes for a clear approval are not there yet. The central bank has asked banks to freeze all money orders and transfers temporarily (link in Greek). In my view, the news flow suggests that the bailout in Cyprus is not going well and I fear there will be severe negative consequences for the euro zone's economy and the stability of its banking sector as ...


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