Cyprus Bank Levy Worries Romanian Savers

Thousands of Romanians are to be affected by the controversial plan to tax savings held in Cypriot banks.Some 40,000 Romanians who live and work in Cyprus could be hit by the controversial plan to tax bank deposits in order to fund a bank bailout.

“All Romanians here will be affected. They do not have big bank deposits, but any tax on them, even of 6.75 per cent, will be a burden,” says Bogdan Popescu, an engineer who works in Limassol, Cyprus’s second city.

“There are less and less jobs here, and most people rely on their savings for when they are out of work. I thought our deposits came with a state guarantee,” he added.

The levy is being imposed by the European Union and the IMF as the price of 10 billion euro bailout of the country’s over-extended banks.

The plan involves a tax of 9.9 per cent on bank deposits exceeding 100,000 euro and of 6.75 per cent on smaller deposits.

The measure has sparked outrage among Cypriots and has unsettled financial markets. As a result, the parliament of Cyprus may refuse to endorse the levy.

Romanian companies are also likely to be affected by the measure if it is adopted. Romania has around 5,100 offshore companies registered in Cyprus. There is no available data about how much money they have in Cypriot banks.

Stocks around the world, including in Romania, fell sharply after the plan was announced. The tax on deposits has raised fears of a run on banks in other European countries potentially in need of bailouts.

Romanians form the third largest foreign community in Cyprus, after mainland Greeks and British. Most moved there after Romania joined the European Union in 2007, taking modestly paid jobs.

Check Also

Najaf seminary prepares for post-Sistani Iraq

The opening of Sheikh Baqir al-Irawani’s office in Najaf indicates that he may be preparing …