With the Mediterranean island nation of Cyprus about to impose a confiscatory tax – up to 9.9 percent – on all bank accounts, resulting in a run on Cypriot banks, the rest of the world is watching anxiously and asking the obvious question: “Could it happen here?”
The economy of Cyprus is the third-smallest in the Eurozone, and its government is heavily in debt. Over the weekend, a group of European finance ministers came up with a $13 billion emergency assistance package to bail out banks in Cyprus, with one very big catch.
The government of Cyprus would have to raise $7.5 billion through a tax on Cypriot bank depositors.
Under the most recent terms discussed, depositors with more than