Eurocrats? Coming to a lamp post near you?

Lamp post in La Paz from which President Villaroel was hung in 1946.

I wonder if I was the only person who was quite shocked to hear yesterday evening  that luminaries at the European Community intend  to dip their fingers into the bank accounts of people in Cyprus as part of a rescue package for the country.

Of course it is arguable that if the measure is not taken then there could be a run on the banks which would lose depositors ALL their savings (think Russia in 1998).

Nonetheless at a visceral level the action feels like theft and is bound to cause deep resentment.  It also sets a terrifying precedent:  Italy or Spain tomorrow perhaps?  and then who else might wake up one morning to find that the Government has decided to put its sticky fingers into what one thought was one’s own?

Matts Persson, the Director of the think tank Open Europe can put it much better than I can, so I quote from his blog in the Telegraph today

‘All bailouts are unfair – the people who screwed up almost never pay – but this is in a league of its own. Seventeen Eurozone finance ministers locked themselves in a room and decided that every Cypriot depositor – whether super-wealthy or dirt-poor – will, out of the blue, see part of their hard-earned money seized. Remember, Cypriot President Nicos Anastasiades explicitly promised in his election campaign, only a few weeks ago, that depositors were safe. The Cypriot electorate now faces losses on deposits as well as years of austerity (under the bailout loan). What’s worse, deposits under €100,000 are supposed to be protected by EU law, not raided by EU leaders. And Cypriot banks have frozen close to €5.8bn, i.e. imposed capital controls which is meant to be illegal under EU single market rules. This is political dynamite.’

Whenever I read about Government overstepping the mark in this way I am reminded of the Plaza Murillo in downtown La Paz.  Nick and I went there on our honeymoon and were interested to learn from our guide about the lampposts under which various politicians had been hung during public insurrections in the past.

Time to erect a few suitable models for future use?