Monday, 01 April 2013
News that the Cypriot President’s family moved 21 million euros to London days before the bank accounts of his people were looted as part of the bailout deal serves as another reminder that while the media portrays the victims of the Cyprus “haircut” as the mega rich and wealthy Russian oligarchs, the real victims are middle class families and small business owners.
“A company owned by in-laws of Cypriot President Nicos Anastasiades withdrew dozens of millions from Laiki Bank on March 12 and 13, according to an article published in Cypriot newspaper Haravgi,” reports EnetEnglish.
“The newspaper, which is affiliated to the communist-rooted AKEL party, reports that three days before the Eurogroup meeting the company took five promissory notes worth €21m from Laiki Bank and transferred the money to London.”
In addition, as Reuters reports, “While ordinary Cypriots queued at ATM machines to withdraw a few hundred euros as credit card transactions stopped, other depositors used an array of techniques to access their money.”
Branches and subsidiaries of Cypriot banks in London and Russia remained open while banks in Cyprus were closed, allowing Russian oligarchs and other wealthy depositors to move their money.
When asked about the amount of money that had exited Cyprus before the bailout deal, German Finance Minister Wolfgang Schaeuble refused to provide figures.
“Perhaps because if he did, it would become clear that the only entities truly punished by this weekend’s actions are not evil Russian billionaires, but small and medium domestic companies, and other moderately wealthy individuals, hardly any of them from the former “Evil Empire,” remarks Zero Hedge.
As Business Insider reports, the fact that the mega-rich – the supposed targets of Cyprus “haircut” – have already removed most of their money from the system means that, “upper middle class/entrepreneur types will feel most of the pain if the Cyprus tax is enacted.”
In other words, the very engine of the Cypriot economy, the businesses and the employers, will be the victims of the EU/IMF plundering. Middle class families are also amongst the worst affected. The Telegraph recently reported on a family who sold their villa in Cyprus for 200,000 euros right before the “haircut” was announced only to see the desperately needed cash disappear.
As we highlighted last week, a screenshot from an online bank account belonging to a medium-sized IT business in Cyprus shows over 720,000 euros in “blocked funds” (see screenshot below). According to the owner, 80 per cent of that will be swiped and what’s left will take 6 to 7 years to get back.
After an initial attempt to plunder around 10 per cent of savings was rejected after a huge public outcry, Bank of Cyprus depositors now face losing up to 60% of their money, with Cyprus’s financial minister Michalis Sarris warning the “haircut” could even be as much as 80%.
However, since the theft has been characterized by the media as merely targeting rich Russian oligarchs and other wealthy investors, the uproar has diminished.
In reality, the mega-rich managed to get their money out either before the crisis even started or during the so-called “bank holiday” period while middle class depositors were left stranded.
Given that the looting of bank accounts has now been established as the template for future “bank recapitalizations” across Europe as well as Canada, the middle class has now been permanently put in the crosshairs and will be expected to pay for bankers’ gambling losses with their savings on a regular basis.