In the beginning was denial. The financial crisis sparked by the subprime crisis in the US was not supposed to extend to Europe, according to the statements of the officials which were being made a few years ago. The health of banks was not even considered, just like a sovereign default was considered a blasphemy for a long time in the Eurozone.
How quickly time flies! Now, the decisions or the statements concerning the distant time horizons last about as much as the 118th element of Mendeleev's table, which has a half-life of 0.89 milliseconds.
Bailing out banks has taken precedence, due to the symbiotic connection between them and the state. "For the first time we have agreed on a bail-in which is significant for protecting taxpayers", Jeroen Dijsselbloem, Dutch finance minister and president of the Eurogroup said at midnight, after a marathon meeting.
The same Dijsselbloem would assure us, at the time of the robbery in Cyprus, that what was happening in the Mediterranean island would not be an action framework applicable all over Europe.
And yet, how are taxpayers protected, because they are also "owners" of the deposits which will be partially or totally seized? Are the deposits in the banking system set up by aliens (the outer space kind)?
"The European Union has agreed to force investors and those with sizeable savings to bear the cost of future bank defaults", Reuters writes. The new plan stipulates that shareholders, bondholders and those with deposits over 100,000 Euros will be required to participate directly in saving banks.
Moreover, the new regulations "can affect German depositors or any other investor in the world", according to a statement by German finance minister, Wolfgang Schäuble. He also said that "We need a clear liability cascade: first the shareholders, then the various bondholders, then the depositors --
