The Cypriot bailout agreed in the earlier hours of Saturday morning could be a game changer for the eurozone. It was a resounding victory for Germany, but the compromise reached could see banks collapse across Southern Europe.
Saturday’s decision allows Germany to have its cake and eat it. The meeting of eurozone finance ministers decided to loan Cyprus €10 billion. The International Monetary Fund (IMF) will probably also join in. But the bailout comes with a shocking and unprecedented condition.
Cypriots will have money taken directly out of their bank accounts. Monday is a bank holiday in Cyprus. By the time banks open on Tuesday, all depositors will have a chunk taken out of their account. Accounts with less than €100,000 will face a levy of 6.75 percent. Those with more, will be taxed at 9.9 percent. Continue reading
Italy plunged deeper into political chaos this weekend after Beppe Grillo, the quixotic former comedian who holds the balance of power in parliament, suggested that the country may have to abandon the euro and return to the lire.
The rebel comic’s warning came amid a growing rebellion among grass-roots supporters of his Five Star Movement, with 150,000 signing a petition calling for him to open up dialogue with the centre-Left Democratic Party, the biggest force in parliament. Continue reading