When is a Euro not a Euro?
When it’s in Cyprus.
From the Financial Times:
The most important characteristic of a monetary union is the ability to move money – without any restrictions – from one bank to another in the currency area. With capital restrictions, the value of a euro in Cyprus is no longer worth the same as a euro held by any other bank in the eurozone. A euro in Nicosia cannot be used to buy goods in Frankfurt without limits. Effectively, it means that a Cypriot euro is not a euro any more.
Jeroen Dijsselbloem, the head of the region’s finance ministers, seemed to suggest to Reuters on Monday that the island country’s rescue ( a hybrid between a dog’s dinner and a pigs’ breakfast) could serve as a template for future deals, by taxing depositors.
Here’s how that news was received in Italy:
“Only two things are infinite, the universe and human stupidity, and I’m not sure about the former.”