More deposits to be plundered
The looting of private bank accounts to cover the gambling losses of big banks is a new template for the euro zone, according to Dutch Finance Minister and President of the Eurogroup of euro zone finance ministers Jeroen Dijsselbloem.
Jeroen Dijsselbloem. Image: Wikimedia Commons
With savers in Cyprus set to have 40% of their wealth plundered in order to fund an EU bailout package, Dijsselbloem indicated that this new model of “bank restructuring” was set to be replicated across the continent.
“If there is a risk in a bank, our first question should be ‘Okay, what are you in the bank going to do about that? What can you do to recapitalise yourself?’. If the bank can’t do it, then we’ll talk to the shareholders and the bondholders, we’ll ask them to contribute in recapitalising the bank, and if necessary the uninsured deposit holders,” Dijsselbloem told Reuters.
“Uninsured deposit holders” means anyone unfortunate enough to have squirreled away more than 100,000 euros under the delusion that it wouldn’t be swiped from under their noses by EU technocrats.
His remarks helped send the euro single currency plummeting, before a spokeswoman for Dijsselbloem ludicrously attempted to re-write history and claim that he didn’t say Cyprus was a template for bank restructurings.
In reality, the minister is merely echoing what other banking chiefs have already admitted in the wake of the Cyprus crisis – that no one in Europe is safe from having their savings looted.
Hours after the announcement that Cypriot savers were set to see their deposits plundered, Joerg Kraemer, chief economist of the German Commerzbank, called for private savings accounts in Italy to be similarly plundered. “A tax rate of 15 percent on financial assets would probably be enough to push the Italian government debt to below the critical level of 100 percent of gross domestic product,” he told Handelsblatt.
As Zero Hedge reports, by calling the Cyprus looting a “bank restructuring” and not a “tax,” technocrats were able to bypass the democratic process.
“What Cyprus allowed was the effective usurpation of democracy – the only reason the Cypriot bailout “passed” (at least so far) is because it was structured as a bank restructuring, a financial system “resolution”, not a tax, and thus not in need of a parliamentary, democratic vote. Because as Cyprus also showed, votes to deprive depositors of cash, whether insured or uninsured, simply won’t fly.”