Germany’s revenge on Russia
About Joe HagstromJust a regular working stiff who figured out why there are people with no health insurance who are against national health insurance. They're Faux News watching idiots.
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The big news affecting the stock markets now is the plan to tax Cyprus bank depositors ten percent. This isn’t 10% of their earnings now, it’s 10% of their deposits. On the surface this sounds unfair. Pundits are upset. One guy said this was a nuclear attack on savings and another said it would open a “Pandora’s Box” and governments everywhere would raid bank deposits.
Cyprus is bankrupt. Other than nice scenery I don’t know of anything it has to offer. And seeing as how most of us are too lazy or cheap to go to Cyprus and look at the scenery when we can sit on our rear ends and look at images of Cyprus on our laptops and tablets, its troubles will continue.
Germany is the strongest economy in the Eurozone. Germany is also not fond of bailing out weak economies and the Germans don’t have much use for Russians since WWII. The Cyprus bank deposit “tax” is a great way for Germany to stick it to a bunch of Russian billionaires.
The thing is, of the 70 billion euros in Cyprus banks, almost half belongs to foreigners, most of them Russian. So Germany can stick it to them by ramming this deal down the throats of Cypriots. The alternative for Cyprus is default. Not a good deal for them either way. Germany makes Cypriots pay for their bailout, not that there’s a whole lot of rich Cypriots running around, but that gives Germans cover for their real goal of sticking rich Russians with the bill. In a way it’s just from my slightly left of center point of view. Everyone is contributing something. But the rich are contributing a larger share as that’s what is fair. Rich Russians have been using Cyprus banks to store cash tax free. It’s only right that they contribute the most to the system that benefits them the most.
The reasons for billionaires to hide money in foreign banks are varied. Maybe they have investments in a country and want to have in country cash available. I doubt many billionaires are interested in investing in Cyprus though so the reasons for having deposits in Cyprus banks are most likely less than honorable. It will be interesting to hear President Putin’s take on this.
American right wingers have no problem with hypocrisy: demanding government void union contracts while expressing outrage that a rich banker’s contract not be subject to government voiding. So perhaps Putin will take their cue and demand Russian billionaires not be subjected to the outrage of helping keep a country that hid their less than honorable assets; hidden from taxation by the Russian government. Ya gotta love Russia’s new brand of socialism…especially if you work for Fox News.
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Jim Moore
March 18, 2013 at 1:09 pm
Well, let’s hope everyone keeps a cool head. You may recall that WW-I started over less.
Assassination of Archduke Franz Ferdinand of Austria: http://bit.ly/fXXcc
And, perhaps a closer fit – the “Opium Wars” between the UK and China were largely over trade disputes: http://en.wikipedia.org/wiki/Opium_Wars
What did Roseanne Roseannadanna say? “It’s always something–if it ain’t one thing, it’s another.”
Joe Hagstrom
March 18, 2013 at 2:07 pm
This is really having little effect on the markets. When Greece had all it’s problems I think it was used as a tool by market manipulators to drive down prices on stocks they were short. A few days to recover then another Greek thingy to scare the prices down.
Good job if you can get it.
Rachael
March 18, 2013 at 2:33 pm
Greeks….ya gotta love ‘em! Good one Joe.
Norman Rampart
March 18, 2013 at 5:30 pm
Then why not ‘hit’ the Russian oligarchs who are using Cyprus as a tax haven? No problem there from anyone, unless you’re a Russian oligarch.
This ‘theft’ – and it is theft – of ordinary peoples savings is immoral and, quite possibly, illegal. Calling it a ‘tax’ when you are swiping ordinary peoples savings is robbery.
Cyprus is indeed in financial trouble but that’ll teach them to join the unmitigated disaster that is the ‘EURO’.
What next? Same thing for Ireland and Greece and Spain?
Seriously mate. This could explode the entire continent.
British troops serving in Cyprus need a bank account – their accounts are getting hit too?
It’s sheer madness, morally repugnant and unforgiveable.
Hit the Russian ‘tax dodger’ by all means but not ordinary Cypriots who are not to blame for any debt crisis.
Incidentally, apart from beautiful scenery and beautiful people Cyprus indeed has little to offer politicians.
That’s why the world sat back and allowed Turkey to illegally invade the place, steal Cypriot homes and land and split the island in two.
I suspect if Cyprus had any oil to supply to us we might have bothered to help them. Just a thought.
Jim Moore
March 18, 2013 at 6:10 pm
A true double-edged sword…and a one-time potential windfall at the expense of their “offshore” banking industry.
As with most schemes to screw other political entities by setting up tax-avoidance havens for the wealthy, if they are not thoroughly thought through (whew) they will bite you in the ass. While Monaco and Switzerland really figured out how to do these sorts of things while still generating enormous amounts of state revenue, many of the other “havens” seem to forget that working for free has its downsides.
Many US communities fall into the same traps. They lure “business” to move into their communities with both tax breaks and “incentives” (a.k.a. cash bribes) expecting a boom in collateral businesses, employee-sourced tax base and so on. What most fail to realize is that there are other whores out there eagerly waiting to lure the businesses (a.k.a. “Johns”) away from their old digs as soon as the incentives hit their expiration dates. So businesses such as auto makers and other manufacturers, and in particular retailers, just bounce from one community with its pants around its ankles to another.
“Offshore” banking is particularly susceptible to this game. My guess is that all the oligarchs are swiftly laying plans to move their money before the tax can be levied. This means that Cypriot banks will be decimated and there will be no tax revenue to boot.
Brilliant.
Norman Rampart
March 18, 2013 at 7:05 pm
Apparently all Cypriot banks are closed until Thursday…what????
Not happened in western democracy since WWII. They’ve actually shut the banks.
Apparently every account holders account is being ‘deducted’ the appropriate percentage the EU have demanded.
Some German financial chap actually said ‘This is fair’. Well he is German
If there could be some crazy guarantee that only poiticians would die then I’d love to see Cyprus erupt – murder all the politicians supporting this and then elect the sane ones who would tell the EU to piss off.
That’s all it would take you know.
Tell the EU to piss off.
What would/could they do? Invade? Even they wouldn’t dare!
Michael John Scott
March 21, 2013 at 1:33 pm
Well said Jim!
Jim Moore
March 18, 2013 at 7:32 pm
Bank holiday, huh? Which brings us back to my first comment about Archduke Ferdinand and the Opium Wars.
I suspect this could go one of two ways. The home countries of the “offshore” bankers will conspire with the Germans and Cypriots to extract their pound of flesh as the deposits are pulled from Cyrus banks, or Putin is going to be one seriously pissed off, nuclear-armed, tank-equipped leader. I’ll bet he has drones, too.
Let’s see now. A bunch of wealthy Russian “investors” have stashed their cash in the equivalent of the Caiman Island. And some (perhaps many) are buds with Putin. I’m thinking that Putin might go for door number 2, and the fan blades are going to be coated with feces very soon.
Bets anyone?
Norman Rampart
March 20, 2013 at 9:03 pm
I bet Putin hasn’t the balls. He’s too busy staying in power and, lets face it, you need an intact country to be in power of eh?
Besides, the EU will ultimately back down. Not now or even this year perhaps but they will. They’re a ‘power’ that doesn’t really exist except in their own weird minds.
Susan
March 20, 2013 at 3:42 am
This plan to steal 3 billion dollars from Russian oligarchs, government, and mafia is rather naive.
Do they really expect the Russians to do nothing in response?
The theft of 3 billion dollars of Russian money is an act of war.
I have no doubt Germany will regret ever proposing this.
Norman Rampart
March 20, 2013 at 9:07 pm
Germany tend to ‘regret’ a wee bit late – see WWII and the ‘final solution’….
Despite rumours to the contrary this isn’t about Germany entirely. This is about The European Union. A dream, a nirvana conceived and believed in by politicians who are in a world of their own making.
The EU is a concept that is unattainable mainly because the people of Europe don’t want it.
Ultimately the politicians will realise this or Europe will be the location of WWIII – or something like that.
Michael John Scott
March 21, 2013 at 1:31 pm
Good points here Susan. Never mess with the Russians. Germans should have learned that at Stalingrad.
Jim Moore
March 21, 2013 at 3:23 pm
Once again, where’s the like button??? Good comment Susan.
Joe Hagstrom
March 20, 2013 at 7:55 am
The Cyprus parliament rejected the bailout, screw the Russians offer. Now Cyprus is asking Russia for a loan. Appears that Cyprus will leave the EU and become the first satellite nation for the new USSR.
Or at the least be a bought and paid for playground for Russian mafia dudes and oligarchs.
Good work is you can get it. I think it would be cool to be an oligarch.
Norman Rampart
March 20, 2013 at 9:10 pm
A double edged sword extraordinaire old bean.
Leaving the EU would be the best move for Cyprus – would that leave them vulnarable to Russia? Perhaps.
They can always say ‘NO’ to Russia too you know.
Still. This is politics God help us all.