Heavily indebted governments regularly pillage the money of savers. The reason is simple. Savers have spare money and governments don’t. So many governments want to live well beyond the means of their taxpayers. Some rob savers by inflation, eroding the value of their savings. Some do it by special savings taxes. Some do it by controlling interest rates, to ensure the government can borrow cheaply at the expense of the savers return. Some do all three of these things.
Now the EU and Cyprus are simply going to confiscate part of a person’s savings away for being in a particular banks. That looks like a great way to encourage the mass migration of savings from weak banks in the Euro area to stronger banks somewhere else.
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