Andrew DuBois

Staff Writer

    The small island of Cyprus was seemingly a tax haven for wealthy people in the Mediterranean. Cyprus attracted wealthy russian oligarchs, business men, and even a few criminals now and again. Cyprus was a very nice place, kind of like the Cayman Islands for the Mediterranean. However Cyprus ran into problems when it decided to help bail Greece out of debt last year. They invested in hopes that the Greek economy would make a come back. The Greek economy has not made much of a come back and now Cyprus is in trouble.

    Cyprus asked the Eurozone for a bailout and was promptly denied. The country decided that the only way they were going to be able to possibly get out of debt was to tax peoples bank accounts. So a plan was purposed to impose a ten percent tax on everyones savings account in the small country.

    When the people heard out about this many of them rushed to their bank only to find that it had been closed due to a national holiday. However the ATMs still worked. So long lines formed and one by one people withdrew as much money as the ATMs would let them. This made the crisis even worse than it already was for the small country.

    Banks work on the confidence of the people who invest. After the proposed tax plan, most people of very reluctant to trust the banks again. Banks have reopened in Cyprus after the problems with many capital controls on the banks. Such as a limit on cash withdrawals, export limits on euros, or a ban on cashing checks.