Up to 60,000 British savers face losing thousands each after £8.7billion EU bailout imposes tax on ALL bank accounts in Cyprus
- Lines formed at ATMs as people scrambled to pull their money out
- Word spread that rescue package included a one-off levy on deposits
- Restrictions stopping people emptying accounts or moving money abroad
- Up to 3,000 British service personnel are based on the bankrupt island
- President Nicos Anastasiades agreed to raid with European finance chiefs
- Said country in ‘state of emergency’ and not acting would be ‘catastrophic’
- But expats accused the island of ‘plain theft’ as violent protests sparked
By Simon Watkins and Alex Hawkes
PUBLISHED: 16:23, 16 March 2013 | UPDATED: 22:38, 16 March 2013A spokesman for the Cypriot government said yesterday the agreement with Brussels was ‘serious but not tragic’ and said that the EU had wanted a much higher levy, but the government had fought hard against it.
He said: ‘The dilemma is whether we would have a functioning economy or total collapse on Tuesday… whether to give in at the 6.75 per cent mark or lose 100 per cent.’
Restrictions have been imposed to stop people emptying their accounts or moving their money out the country after the Cypriot government announced that up to ten per cent of deposits will be seized and used to bailout the island’s crisis-hit banking system.
The deal with other eurozone finance ministers is the first time that ordinary citizens’ deposits have been directly raided in this way.
One furious expat said: ‘This is plain theft. I’d love to hear someone explain to me why it isn’t.’
Under the deal, all bank deposits over €100,000 will be hit with a levy of 9.9 per cent. Those with smaller savings will pay 6.75 per cent.
The move sparked panic and violent protests yesterday as crowds desperately tried to withdraw their money at cash machines.
‘Why would you risk putting your money in Greek, Spanish or Portuguese banks after this?’
British expats were stunned by the news, with many left high and dry by the restrictions on accounts.
Cash machines had been working, but many ran out of notes because of the panic withdrawals.
But financial experts said the raid – designed to stop Cyprus crashing out of the euro, potentially destroying the currency – would send shock waves through the eurozone.
If savers in other troubled nations fear their accounts might be next, they could withdraw their money and spark a catastrophic run on the banks.
Source: Daily Mail