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
Raw: Fire Destroys 3 N.J. Beachfront Homes Raw: Space X Launches to Space Station My name is Cocaine Lohan Gets Candid About Her Sex List The 2014 New York Auto Show Meet Johnny Manziel's New Girlfriend Chelsea Clinton Announces Pregnancy Funny: Celebrating Easter with Martha Stewart and Friends Man Accuses 'X-Men' Director Bryan Singer of Sexually Abusing Him As a Teenager Man hit with $525 federal fine after he doesn't pay for soda refill Lea Michele & Naya Rivera Feuding? Jabari Parker declares for the NBA draft Singing Nun Belts Out Cyndi Lauper New West, Texas Explosion Video Swim Daily, Throwback Thursday Don't Be A Tattletale: Bad Bullying Tips For Students The trillest thoughts on marijuana "RHOA" Star Charged With Battery Grizzly Bears Get Snowy Birthday Party Weatherman draws forecast when another technical glitch strikes WGN
Special Features
NRA Waterfront Plans