The Sky Is Falling In Europe..

European markets plummeted today as news spread of a new bailout plan that includes  taxing bank deposits.

LONDON (Reuters) – The surprise decision by euro zone leaders to part-fund a bailout of Cyprus by taxing bank deposits sent shockwaves through financial markets on Monday, with shares and the bonds of struggling euro zone governments tumbling.

The bloc struck a deal on Saturday to hand Cyprus rescue loans worth 10 billion euros ($13 billion), but defied warnings – including from the European Central Bank – and imposed a levy that would see those with cash in the island’s banks lose between 6.75 and 9.9 percent of their money.

Parliament in Cyprus put off a vote on the measure – which has shaken depositors’ confidence in banks across the continent – until Tuesday, however, and with public anger at the deal widespread the government said it was already looking to ease the pain for small savers.

Panic spread as people dashed to withdraw savings.

Cyprus bailout crisis shakes markets

The euro dived and shares suffered sharp losses after a controversial bailout package for Cyprus threatened to trigger fresh turmoil in the eurozone.

Eurozone finance ministers demanded on Sunday that Cypriots pay up to 10% of their bank deposits in exchange for a €10bn (£8.5bn) bailout, prompting panic across the island as people rushed to cash machines to withdraw their savings.

That caused traders to dump shares across Europe, on fears it sets a dangerous precedent that could trigger bank runs in other eurozone countries.

But now banks are being — closed?

(Reuters) – Banks in Cyprus will be shut on Tuesday and Wednesday pending a decision by parliament to approve a levy on bank depositors, a government source told Reuters.

“Tuesday and Wednesday are bank holidays,” the source said. A decree will be released shortly from the Finance Ministry to this effect, he said.

Is the government literally forcing banks to close to keep people from withdrawing their own money?

Any Thoughts?

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: