As the Cypriot government ponders over levying its peoples’ bank accounts, one has to wonder how much political capital will have been made by UKIP during the last few days.
Now that the European Union, IMF, ECB and a national government have all decided that the banks are more worthy than the people, who do electors turn to for protection?
Be in no doubt that this move in Cyprus is a clear signal that not only are the people unimportant when measured against the EU political project, but also that the peoples’ money is the state’s to control and spend at will.
Now we can see the true underbelly of the EU beast.
And parties such as the United Kingdom Independence Party will have gained support as a result. Just ask yourself what the result would be if the Eastleigh by-election were to be run tomorrow? Or any other election, come to that.
Lee Robinson, the founder of Altana Wealth (London and Monaco) and co-author of “The Gathering Storm”, puts it in even more stark terms calling it ‘…the Archduke Ferdinand moment for Europe’.
Lee goes on to say that ‘It is worrying that the senior members of the Eurozone and IMF cannot see the huge risks of destroying eurozone guarantees. It would have been fairer and more sensible to follow contract law and therefore wipe out bank capital sub debt and for depositors above â‚¬100k to take the full hit. After all, a 15% on that amount is better than the 40-70% from insolvency. How many votes did Grillo and UKIP just pick up from this calamity?’
Lee continues and points out that this move would not survive what would inevitably turn out to be a long and drawn out legal challenge on human rights grounds.
He then says that the end result will be a situation that costs Europe many times more than anything they gain from the bank account holders of Cyprus due to wider banking spreads.
And with many Russian investors being hit and Russia being a major supplier of oil and gas to Northern Europe ‘….this action has consequences’ says Lee.
Then of course there is the impact on depositor confidence across the Eurozone and the wider EU:
‘Malta and Cyprus and other low GDP to bank asset countries such as Ireland are finished as depositor centres. Economists tell you that queues outside banks are disastrous. This stupidity has just increased that possibility. All the good work over the last 6 months to stabilise the fund flows from the periphery has just been nuked.’