While Nobody Is Looking, EU Swipes National Sovereignty & Personal Money Right Out of Cypriots' Bank Accounts

by Bob Adelmann


In an outrageous, audacious and unprecedented move, the European Union has abrogated Cypriot sovereignty and imposed an immediate tax on citizens of Cyprus holding their money in local banks.

The rate is 6.7% on accounts under 100,000 euros and 9.9% on accounts over 100,000. It was imposed on Saturday even before the Cyprus government met to approve it. In other words, Cyprus has lost its national sovereignty in the deal, just as I wrote that it would last week:

[Cyprus] benefitted greatly when they joined the EU in 2004 with cheap money available for government projects, all in the name of “stimulating the economy.” Now they’re in trouble, they can’t pay their bills, and they need help.

In exchange for such “help” they’re [the EU is] willing to drill the hapless inhabitants with higher taxes along with political control. It’s all part of the plan.

As Benjamin Franklin said: “Those who desire to give up freedom in order to gain security will not have, nor do they deserve, either one.”

The deal saves the banks and those foolish enough to have loaned money to the Cyprus government.

It’s the banks, it’s always the banks, it’s forever the banks. Here’s how Dutch Finance Minister Jeroen Dijsselbloom, the chairman of the group that was in charge of neutering Cypriot sovereignty – an unelected official leading an unaccountable cabal – explained it:

This decision should not be compared to the ideal, but to the very real possibility that much money could have been lost in a bankruptcy of the banking system…

There’s more to it than that, of course.

It has to do with keeping the EU together no matter what the cost to innocents caught in the web. Dijsselbloom made that clear:

As it is a contribution to the financial stability of Cyprus, it seems just to ask a contribution of all deposit holders … [and shows the committee’s] inflexible commitment to financial stability and the integrity of the euro area.

I like his use of the words “just” and “contribution” to describe this massive bank theft.

More is coming. Said the committee:

Further measures concern the increase of the withholding tax on … income, … [and] an increase of the statutory corporate income tax rate…

With the massive pushback by citizens just beginning to build, the EU dictators are “modifying” the bank theft slightly, in a classic case of bait and switch.

Instead of the 6.7% levy on accounts under 100,000 euros they’re considering reducing it to 3.0%. But in the process they will raise the upper levy from 9.9% to 12.5%. That way, they add insult to injury by drilling the wealthier citizens, while keeping the total amount of the theft constant. A spokesman commenting on the “modification” of the theft said:

If the Cypriot leaders agree on a more progressive scale for the one-off levy, in view of making it fairer for smaller savers and provided this would have the same financial impact, the Commission would be ready to recommend that the Eurogroup endorse such an agreement.

How nice of them: we still want to steal the same amount of money from depositors in Cyprus, but you’re welcome to adjust the amounts each depositor will have to fork over, as long as we get what we want.

It’s the piper getting paid: cash for sovereignty.


A graduate of Cornell University and a former investment advisor, Bob is a regular contributor to The New American magazine and blogs frequently atwww.LightFromTheRight.com, primarily on economics and politics. He can be reached at badelmann@thenewamerican.com.

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