NewburyportNews.com, Newburyport, MA

Opinion

March 23, 2013

Anderson: Opening a Pandora's box in Cyprus

“We loiter in winter while it is already spring. In a pleasant spring morning, all men’s sins are forgiven.”

— Henry David Thoreau

As I write this, I’m loitering: The snow is still falling, my golden daffodils are buried, it’s too cold to be called “pleasant.” Furthermore, too many sins have piled up since Thoreau was chronicling the advent of spring at Walden Pond. Forgiven or not by a loving God, we are going to have to pay for them.

One word, as the sun crosses the equator: Cyprus.

A group of Eurozone finance ministers in Brussels agreed last Saturday to give Cyprus’ government a $13 billion bailout, but demanded that depositors in the island’s banks pay between 6.75 and 9.9 percent of their bank deposits as their share of the bailout cost.

At first, that didn’t seem like much; as I did my own taxes last weekend, I had to add my interest to my other income and under $200 to my taxes. But wait!: The proposed Cyprus tax isn’t on the interest, it’s on the entire amount of money in the account! And the government, on behalf of the European central bank, would seize it directly. The Cyprus Parliament has to vote on this plan, but if it’s rejected, the country will not be able to pay its bills, will financially collapse.

Imagine being told that the government is going directly to your bank account and immediately, electronically, extracting 7 percent of your checking and savings accounts. You might be tempted to get your money out of the bank before the government gets there, though where you’d put it, I can’t imagine. As Cypriots considered this defensive action, the government closed the banks so they couldn’t withdraw anything.

Meanwhile, as depositors in other debt-ridden European countries became concerned, investors everywhere began to worry about runs on those nations’ banks.

Text Only | Photo Reprints

NDN Video
Weird 'Wakudoki' Dance Launches Promotional Competition Two women barely avoid being hit by train Chris Pratt Adorably Surprises Kids at a 'Guardians of the Galaxy' Screening Chapter Two: Designing for Naomi Watts NOW TRENDING: Peyton Manning dancing at practice "The Bachelorette" Makes Her Decision Thieves pick the wrong gas station to rob Golden Sisters on '50 Shades' trailer: 'Look At That Chest!' Staten Island Man's Emotional Dunk Over NYPD Car - @TheBuzzeronFOX GMA: Dog passes out from excitment to see owner Baseball Hall of Famers Inducted 'Hunger Games: Mockingjay Part 1' Sneak Peek Florida Keys Webcam Captures Turtles Hatching Morgan Freeman Sucks Down Helium on 'Tonight Show' Robin Wright Can Dance! (WATCH) She's Back! See Paris Hilton's New Carl's Jr. Ad Big Weekend For Atlanta Braves In Cooperstown - @TheBuzzeronFox Chapter Two: Becoming a first-time director What's Got Jack Black Freaking Out at Comic-Con? Doctors Remove 232 Teeth From Teen's Mouth
Special Features
NRA Waterfront Plans