EU Regulators Hit a New Low with the Proposed Cyprus Bank Deposit Tax

Dear readers, sometimes we poor common people have to wonder just how stupid bureaucrats really are. The latest proof that we have not yet plumbed the depths of their stupidity came over the weekend -- when the European Union's Eurozone overseers slapped a 7% to 10% tax on Cyprus bank deposits as the cost of providing a bailout for the little island country that represents 0.3% of the EU's economy. Are these bureaucrats so stupid that they could not foresee : (1). A run on Cypriot banks by account holders that started immediately and would be gathering steam today if the banks in Cyprus weren't closed for a bank holiday - and will this withdrawal panic slowly spread to other Eurozone countries? (2). A deep fall on European and American stock markets that started today with average falls of 2%, but stabilizing at about a minus 0.5%, except in Spain and Italy that remain at a minus 2%. (3). A visceral anger and fear all over the EU that these unelected bureaucrats have finally shown their true colors, "taking scalps" as one European analyst put it this morning in their effort to save the Euro without making the fundamental fiscal changes that are their only real hope of saving the currency. (4). A loud pushback in Spain and Italy, the two large Eurozone economies next on the list of probable bailout candidates, that the EU has proven that it cannot be trusted and that it will "confiscate" in order to protect the unpopular Euro. (5). A decision by the UK and Germany - yes, Germany that is being blamed for the bank deposit tax idea - that they will make whole any of their citizens hit with the tax. ~~~~~ And then there is Russia, whose citizens have billions of Euros in Cyprus banks and thzt thought it had negotiated a deal regarding Russian deposits in Cyprus banks. Will Russia once again negotiate by cutting off oil and gas supplies to Europe? There are even rumors that the EU thinks a solution might be for Russia itself to bailout Cyprus, an idea rejected by the Russian government. Dear readers, we might also give a thought to the Obama administration and its search for money required to expand social programs being denied it by the Republican House. Could President Obama be tempted by the EU confiscation-like bank deposit tax? Stay tuned. Meanwhile the Cypriot parliament has not yet approved the bailout package that includes the bank account tax. BUT the Cyprus government has just announced late this afternoon that Cypris banks will remain closed until Thursday - when Parliament expects to take the bailout vote - in order to prevent a further bank run.