Controversial Cyprus Bank Bailout Provokes Public Anger


Cyprus’ Parliament has postponed an emergency meeting by one day, in order to sort out a very controversial, bank bailout.  The emergency session was called in order to discuss an agreement reached between the European Union and the International Monetary Fund.  The agreement calls for bank deposits to be taxed by up to 10%.  Specifically, those with under 100,000 Euros in the bank would be mandated to pay a on-time tax of 6.75%.  Those with over 100,000 Euros in the bank would have to pay as much as 9.9%.  This tax would essentially go to bailing out the failing banks.  Since the funds in question have already been taxed, the government is asking for a double tax which has the public up in arms.  President Nicos Anastasiades admitted the deal was “painful” but said it was necessary to avoid a “disorderly bankruptcy”.  So according to the President, the answer for the failing banks is to steel from the poor, or more precisely, the average citizen and give it to give to the rich “failing” banks?  Apparently, depositors will be compensated with the equivalent amount in shares in their banks.  There is outrage and calls of betrayal.  The head Parliament’s finance committee, Nicholas Papadopoulos said the deal was “much more than expected.”  Opposition leader George Lillikas said the president – who was elected last month – had “betrayed the people’s vote”.  The Democratic Party, which is part of the governing coalition, said it was seeking clarification before deciding whether to back the measure; that acccording to party advisor Stelios Kilaris.  Kilaris stated, “What happens to Italy now? What happens to Spain? What happens to other countries?”  He continued, “If this experiment fails there will be grave consequences for the whole of Europe.”  While it seems clearly unfair for the average Cyprus citizen to be put in that position, there is a much larger story to be told.  The European Union is in serious trouble.  Maybe more trouble than anyone originally believed.  Extreme measures such as these will not go over well in Italy and Spain and could threaten the very unity of the union.  The fact remains, despite the term Union, there is very little union in Europe.  It’s not the United states where each states’ history shares a common thread. Most of the countries in the European Union have been at war at one time or another and other than geographical proximity, they share little else in common.  Will a common currency, the only thing they truly have in common, be enough to hold the union together in the face of ever more severe austerity measures?

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