Should We Be Sorry For Cyprus Savers?

modeller | 13:54 Sat 23rd Mar 2013 | News

31 Answers

Cyprus has offered very high rates of interest to all savers for years from 5% to 12.5% , compare that to the 0.1 to 1% available elsewhere in Europe.
In addition no questions were asked where the money came from, so criminals and the rich were able to avoid paying tax on their wealth and also earn high rates of interest on their savings.

Should we be sorry for all or some Cyprus savers now that they may have to give some of this money back.

Calls For The Sacking Of Richard Littlejohn.

The Huhnes

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emmie

live now pay later seems to be the motto, or don't pay later.

ichkeria

Of course there's also "Pay now or don't live later" I suppose (!) - which I wouldn't be surprised was the source of a lot of the money in some of the accounts ...

mikey4444

I do feel sorry for the ordinary citizens of Cyprus that stand to lose some or all of their hard-earned savings.

But I can't summon up much sympathy for all those people who have chosen to invest in a country very far from their own doorsteps, just because the tax regime is low and lax, or because they want to launder money from various dodgy backgrounds.

Why else would you bank thousands of miles away from home, as in the case of the Russians ?

I live in Wales and haven't got much money to spare but if I got on a 'plane to the Virgin Islands to deposit my cash, I wouldn't expect or deserve much sympathy, when it all went t**s up !

Sqad

mikey

\\\I live in Wales and haven't got much money to spare \\\

Fine, but if you had a bit behi9nd you...worked hard all your life to save for your retirement and the banks offered you 2% interest......p1ssed off eh?

I take you point about offshore, far away banking..........but it is tempting.

FredPuli43

2% ? You get c 4% on War Loan 3 1/2 at present . That has better security than some Cypriot bond or bank. The price of War Loan varies according to what the prevailing rates of interest are, of course. Its nominal yield is 3.5% and it now trades at about 88. However, there is no capital gains tax should the disposal price exceed acquisition price

The higher the promised yield, the higher the underlying risk. That obvious fact should have been considered by savers.

modeller

Question Author

I've just had a look in Google for 'Cyprus interest rates ' and several came up but here is one to look at.
http://cyprusbank.org.ua/index/0-8

mikey4444

So how could Cyprus offer such good rates while everywhere else in Europe were offering much lower rates ?

Didn't it occur to anybody that maybe when something seems to be too good to be true, that is exactly what it is ?

The same thing happened with Iceland> Many Council Councils around the UK lost money because they invested offshore, instead of staying in Britain.

A fool and his money, etc etc.

Old_Geezer

I'd not consider that a high rate. I'd bet that hire shops that hire out tools and stuff (rather than hiring out cash) expect at least 12.5% annual profit from it.

Yes of course we should be horrified at the idea of a tax on prudence and thrift. As time goes on more and more ways of forcing folk to act irresponsibly are found and suggested. Put you money in gold folks, the tax man won't find it buried in your garden.

pdq1

The way Russia looks after its oligarchs usually means none of them investing £mns in Cyprus will lose out. Take Abramnovich who took his money out of Russia and is now favoured by Putin.

ichkeria

All oligarchs take/took their money out of Russia. No-one looks after them but themselves. The only difference between the pro-Putin oligarchs and the others is that the former agree to stay out of politics and to reinvest their money, as Abramovich did, in national infrastructure, where of course much of it disappears in the form of bribes, etc.
A lot of the Russian accounts in Cyprus belong to ordinary citizens, but much of the large-scale deposits allegedly ends up laundered and re-invested in Russia. A staggering percentage of foreign investment in Russia comes from Cyprus, but much of that money probably started out there in the first place.