Although i'd been expecting a Cyprus bailout for some time, i had been expecting it to pass by quietly, given the numbers are relatively small in comparison with the other bailouts in the region.
As it happens, I was quite surprised (as it appears were most financial markets) to see the proposed details, for the first time proposing a 'tax' on ordinary savings accounts.
I think the EU have grossly underestimated the reaction this would cause, not just in Cyprus but around the world. It brings in to question the validity of deposit guarantee schemes, and after a few quiet months it raises fears again about eurozone contagion and what this now means for other struggling countries and banking systems.
Whilst ordinary people would end up paying anyway (through higher taxes, lower state spending etc), the way this has been structured and presented makes it look particularly arbitrary and unjust. Given the size of the EU budget, i think they should invest a bit more in better PR and communications!
I'm sure this will run for a few days and expect some degree of back-tracking, but it does make me think more about the importance of risk management, tax planning and diversification in managing personal finances.
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