Markets, dropping to almost 3%, fear a worsening of the debt crisis. Tax on bank deposits up to 9.9%. In Cyprus ATMs empty and banks closed. "The same will soon take place in Italy and Europe, then in the United States and the Far East." According to the BSC, in 2011 the excess of total debt was 20 trillion dollars. Even then a 30% levy on total assets was suggested.

Hong Kong (AsiaNews) - All Asian markets are down to almost 3%. Analysts agree that the negative signals depend on the Cyprus bailout, which is to be launched today, and which is causing real concerns about the European debt situation.

The European Union (EU) and the International Monetary Fund (IMF) are in fact determined to help the island with loans of up to 10 billion Euros if the Cypriot banks tax their customers savings.

The plan must be accepted by the Nicosia parliament today, but the president of the island, Nikos Anastasiades, in a televised speech last night has already tried to explain to the public that the choice is between the plan and an exit from the euro with subsequent bankruptcy.

The Nikkei was down 2.5%, Hong Kong by 2.2, Australia 2%.

This is the first time that the 17 euro zone nations have suggested a levy on a population's savings to fund bailouts. Under the plan, customers with less than 100 thousand euro deposit will be charged 6.75%, and those with more than 100 thousand Euros will be charged 9.9%.

The Cypriots stormed the ATMs only to realize that they are almost empty and the banks are closed for holidays today and tomorrow by Presidential order.

According to some analysts, "soon the same thing will happen in Italy and in the rest of Europe, then it will be the turn of the U.S. and the Far East."

The EU and the IMF move on Cyprus, seems to follow the pattern of an analysis first proposed by the Boston Consulting Group (BSC) in September of 2011, that estimated excess of total debt (not just public debt, but also to businesses and households) at 20 thousand billion. The BSC conclusion was that it was necessary to introduce a one-off wealth tax in the western world equal to 30% of total assets. The particularity of Cyprus was and is its role as a tax and banking haven for Russian oligarchs, with a disproportionate amount of deposits in the resident population. The compulsory levy has therefore been "contained" to 10%.

(The image is from www.maxkeiser.com)

 

 

• ASIA-EU
• cyprus
• bail
• out
• wealth
• tax
• levy
• BSC
• markets