Germany's denied it. So has the ECB. So whose idea was it to demand a savings tax?

 

Share
Related Topics

The eurozone was still embroiled in an acrimonious dispute tonight over whose idea it was to impose a tax on the savings of ordinary depositors in Cypriot banks – a decision that has instigated a financial panic on the Mediterranean island and reactivated the wider eurozone sovereign debt crisis.

At the weekend, the Cypriot government briefed the media that Wolfgang Schauble, the German Finance Minister, and Christine Lagarde, the head of the International Monetary Fund, had been instrumental in pressuring Nicosia to impose the levy on small depositors as the price of the country’s €10bn bailout. “We didn’t expect such demand from our European partners” said Cypriot President, Nicos Anastasiades.

But that interpretation of events was firmly denied by Mr Schauble earlier this week. He instead placed the blame for the levy on the Cypriot government itself and also the European Commission and the European Central Bank.

“They have opted for this solution and will now have to explain it to the people of Cyprus,” said Mr Schauble.

This account was seemingly backed up by the eurogroup – a collection of eurozone finance ministers – who released a statement on Monday night claiming they had always wanted small depositors to be protected.

Yet the European Central Bank has distanced itself from the decision too. “It’s the Cyprus government’s adjustment programme” the ECB’s German board member Jorg Asmussen stressed this week, urging Nicosia to revisit the levy.

A Reuters report on Monday suggested the idea had come from a desperate President Anastasiades, who adopted the 6.7 per cent tax on savings below €100,000 after failing to persuade his eurozone counterparts to increase the overall size of the bailout. The report also suggested the President had been motivated by a desire to mitigate the impact on wealthier depositors and to protect Cyprus’s status as an offshore banking centre.

However, an insider account of the Brussels negotiations from the Wall Street Journal muddied the waters further by suggesting that the idea of the levy for small savers was first put forward by the Economic Affairs Commissioner in Brussels, Olli Rehn.

React Now

  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
iJobs Job Widget
iJobs General

Recruitment Genius: In House Counsel - Contracts

Negotiable: Recruitment Genius: This leading supplier of compliance software a...

Recruitment Genius: Associate System Engineer

£24000 - £30000 per annum: Recruitment Genius: The Associate System Engineer r...

Recruitment Genius: Executive Assistant

Negotiable: Recruitment Genius: An Executive Assistant is required to join a l...

Ashdown Group: Marketing Manager - B2B, Corporate - City, London

£45000 - £50000 per annum + benefits : Ashdown Group: A highly successful, glo...

Day In a Page

Read Next
Zoe Sugg, aka Zoella, with her boyfriend, fellow vlogger Alfie Deyes  

If children are obese then blame food manufacturers, not Zoella

Jane Merrick
Amos Yee arrives with his father at the State courts in Singapore on March 31  

Singapore's arrest of a 16-year-old YouTuber is all you need to know about Lee Kuan Yew's legacy

Noah Sin
General Election 2015: The masterminds behind the scenes

The masterminds behind the election

How do you get your party leader to embrace a message and then stick to it? By employing these people
Machine Gun America: The amusement park where teenagers go to shoot a huge range of automatic weapons

Machine Gun America

The amusement park where teenagers go to shoot a huge range of automatic weapons
The ethics of pet food: Why are we are so selective in how we show animals our love?

The ethics of pet food

Why are we are so selective in how we show animals our love?
How Tansy Davies turned 9/11 into her opera 'Between Worlds'

How a composer turned 9/11 into her opera 'Between Worlds'

Tansy Davies makes her operatic debut with a work about the attack on the Twin Towers. Despite the topic, she says it is a life-affirming piece
11 best bedside tables

11 best bedside tables

It could be the first thing you see in the morning, so make it work for you. We find night stands, tables and cabinets to wake up to
Italy vs England player ratings: Did Andros Townsend's goal see him beat Harry Kane and Wayne Rooney to top marks?

Italy vs England player ratings

Did Townsend's goal see him beat Kane and Rooney to top marks?
Danny Higginbotham: An underdog's tale of making the most of it

An underdog's tale of making the most of it

Danny Higginbotham on being let go by Manchester United, annoying Gordon Strachan, utilising his talents to the full at Stoke and plunging into the world of analysis
Audley Harrison's abusers forget the debt he's due, but Errol Christie will always remember what he owes the police

Steve Bunce: Inside Boxing

Audley Harrison's abusers forget the debt he's due, but Errol Christie will always remember what he owes the police
No postcode? No vote

Floating voters

How living on a houseboat meant I didn't officially 'exist'
Louis Theroux's affable Englishman routine begins to wear thin

By Reason of Insanity

Louis Theroux's affable Englishman routine begins to wear thin
Power dressing is back – but no shoulderpads!

Power dressing is back

But banish all thoughts of Eighties shoulderpads
Spanish stone-age cave paintings 'under threat' after being re-opened to the public

Spanish stone-age cave paintings in Altamira 'under threat'

Caves were re-opened to the public
'I was the bookies’ favourite to be first to leave the Cabinet'

Vince Cable interview

'I was the bookies’ favourite to be first to leave the Cabinet'
Election 2015: How many of the Government's coalition agreement promises have been kept?

Promises, promises

But how many coalition agreement pledges have been kept?
The Gaza fisherman who built his own reef - and was shot dead there by an Israeli gunboat

The death of a Gaza fisherman

He built his own reef, and was fatally shot there by an Israeli gunboat