European Bailout To Hurt Civilians
A recent Ten Billion euro bailout seeking to help the European Financial Crisis has recently came to an agreement in Brussels, Belgium and is now seeking part of the money needed for this bailout from the saving accounts from average civilians. This infuriated many citizens of Cyprus led to many people living in Cyprus to start lining up at banks to withdraw their money from their saving accounts. The government also seeks to impose a 9.9% tax on Cyprus bank accounts that hold more than 100,000 euros, and 6.75% for banks accounts holding less than that, which will ultimately take away large amounts of money from the wealthy that have been saving their money in banks.
This policy holds a potential threat to the European economy. Although they may think that this bailout will put them in a better situation, many civilians will suffer from this. Citizens of countries in the European Union will be less likely to put their money in banks, and this may ultimately cause banks to go out of business. If many decide to take out all their money from banks at once another Great Depression may occur, and since the American economy is strongly linked to other economies, this may have a large impact on a global scale.
Written By: Jessica Ho
Source: The New York Times
Alderman, Liz. (2013). Facing Bailout Tax, Cypriots Try To Get Cash Out of Banks. The New York Times. Retrieved from: http://www.nytimes.com/2013/03/17/business/global/facing-bailout-tax-cypriots-try-to-get-cash-out-of-banks.html?hp&_r=0