The raid on Cypriot bank deposits, held in the name of ordinary people, businesses, institutions, communities, and prudent savers, breaks one of the fundamental trust-based relationships that has sustained western societies for centuries.
It means, too, that the link between property and material security is weakened for all Europeans living in societies with a weak economy.
The €10bn Cypriot bailout agreed with the EU and IMF demanded that all bank customers pay a one-off levy — a rate of 12.5% has been suggested for deposits over €100,000. Unsurprisingly, this has led to heavy cash withdrawals — so much so that the island's banks will not reopen until Thursday. It sets a precedent that will reverberate across Europe and find particular resonance in other supplicant countries dependent on external finance to sustain state services.
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