If you had a bank account in Cyprus, you just lost 10% of your money (or 6.7% if it was less than 100K) over the holiday weekend. This is the first time in the Euro crisis that normal depositors have been hit. The government is pretending that this is a tax, not a default. Nice try. Especially since deposits under 100,000 were supposed to be guaranteed by the government. I guess the terms of the deal have changed…
Anyone who didn’t pull their money out in time must feel like an idiot, and if there’s one thing that worries a Spaniard most, it’s looking like an idiot. Given the total denial by the government that anything was going to happen right up to the actual event itself, the protestations by the Spanish government that nothing like this could ever happen here are likely not to be taken seriously.
The only strange thing about this event versus just about every other financial collapse has been how foreign bond-holders have been treated better than local citizens. The utterly amazing part is that senior bondholders (apparently there weren’t a lot of them), who are in theory supposed to be junior to depositors, get off without losing a penny.
Given the ease and low cost of money money around in Europe, is there any sane reason not to keep your money in Switzerland? Or, given the pathetically low interest rates, perhaps in a safe would do as well. Or perhaps even alternative currencies like Bitcoin….