Conventional wisdom held that things in Europe would calm down today, what with a “revised” Cyprus deposit tax that would spare most savers, and the advantage of 24 hours for everyone to cool off.
Well, that’s not happening.
Amid protests in Nicosia (you did see the photo, yes?), < em>none of the parties in the Cypriot parliament will support the deposit tax, but they’re debating the matter anyway, in the hope that rejecting the plan will “strengthen the bargaining position of the Republic of Cyprus.” In other words, Cyprus will put a gun to its own head in the hopes of avoiding the tax.
UPDATE: The Cypriot Parliament voted down the deposit tax 36-0 (Telegraph). Call it the Blazing Saddles Maneuver.
Meanwhile, the rest of the world continues to absorb the shock of the proposed seizure (as one cynic was quoted on Zero Hedge: “mattresses now hold a 10 per cent premium”), and German banks (!!!!!) take advantage by offering panicked Cypriots the chance to move their deposits into their relatively-safe havens – for a small fee (Zero Hedge).
Even British military personnel (who staff two bases on the island) are caught in the maelstrom, with London flying in a billion euros for their men and women in uniform whose deposits are in the vice grip of the closed Cypriot banks.
Back in the UK, Daniel Hannan notes (ZH)…
…in the rest of Europe, we have measured the cost of monetary union in unemployment, deflation, poverty, and emigration; in Cyprus that wasn’t enough, they have had to gouge the savers directly…the really interesting question is – who’s next?
Indeed.
Oh, and the Russians are still not happy.
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