A long weekend with two o’s and almost 10% less euros.

2403043-monton-de-euros-10-20-50-100-200-y-500-eurosWe hope everyone is enjoying their weekend and hate reporting about bad news, however we couldn’t avoid talking about the one-off tax that will be withdrawn from depositor’s accounts, before the banks open again on Tuesday.

From what we understand, the agreed terms of the €10 billion bailout is that accounts with over €100,000 in deposits will be taxed at 9.9% and those with less will face a 6.7% cut in their savings.

Let’s state that more clearly… if you have €100,001 in your account, you will have €9900.99 withdrawn by Tuesday.

People rushing to draw money or do transfers will be angered though as “(the government) have taken immediate measures so that electronic transfers cannot take effect before banks reopen on Tuesday,” according to the Cypriot Finance Minister Michalis Sarris.

We must be clear though, this is still a much better scenario than if the banks or country was declared bankrupt, in which we may have lost ALL of our money/savings/businesses/jobs.

We’ve heard rumours that Laiki and Bank of Cyprus will not be participating in the tax, but cannot find any reliable sources to check that information.
Update: According to the FT, Greek Depositors will not be charged this tax, but this may be with regards to their operations in Greece (as they prepare those branches for sale to local banks there)

We’ll update as we learn more. Know more? Give us your sources/opinions in the comments below.

Update 2: Depositors who have money deducted will also be granted shares in the banks up to the value of their levy.