Spurred by the Eurozone’s tough economic policies, the Cyprus government has decided to tax people’s bank deposits. This is one of the most bizarre financial moves in recent years and was fueled by the E.U.’s bailout package.
Cypriot ministers scrambled to get a parliamentary vote together as soon as possible to allay Cypriot fears and stop a potential bank run. Instead of a universal bank deposit tax, they are floating the idea that those who have over $130,000 will be taxed.
However, if a run on the banks does occur, it could destabilize and cause the economy to completely collapse.
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