Negotiation on the Euro Bailout Continues
Cyprus’s new order to tax saving accounts has now led to a large outcry of people. Many Cypriots have begun to protest, and many foreigners who have saving accounts in Cyprus are looking to transfer their money to a different country in order to prevent the taxation. Many people are trying to withdraw their money from saving accounts, but the government has order a shut down of banks and did not allow them to hand back money to depositors until a final decision regarding this policy is made. But as the banks are shut down many people are taking out money from ATM machines and the two larger banks in Cyprus are now experiencing low levels of cash. This issue has caused euro stocks and government bonds to fall. This new bailout policy is having many negative affects on the European economy.
This is not only a big issue in Europe, but is also important to Americans because policies in Europe may affect policies that are made in America. If the economic situation in America does not improve then the government may also start to take on similar policies. These policies can lead to a large change in cash flow and the banking business of America.
Written By: Jessica Ho
Source: The Wall Street Journal