Cyprus – Tax on savings causes public panic

Late yesterday, the Cyprus Government dropped a bombshell that not only upset their own population but might also send shockwaves right across the European Union. The Greek controlled part of the divided island has been in a financial crisis in the past year, and as part of an agreed bail out from the EU it has decided to tax people’s savings and bank accounts. Not just the wealthy are affected, this is a blanket tax charging 6% on the ordinary Cypriots and up to 10% on the wealthy. It not only applies to the local population, it extends to foreign nationals too. This has caused consternation and people have rushed to banks to withdraw their money to avoid any penalties. The worry across the continent is that other financially struggling European nations might consider passing similar laws.