Evil Tax Haven to be Punished

There are now signs that further euro area bailouts – or rather a specific one – could be shipwrecked in Germany's parliament. The bailout of Cyprus allegedly has a good chance of not getting the nod of Germany's parliamentarians – who have to give said nod, after the most recent ruling by the constitutional court in Karlsruhe on the limitations of the bailout policy.


“Optimism has been in no short supply in the euro zone in recent weeks. Before the new year, both European Commissioner Olli Rehn and notoriously circumspect German Finance Minister Wolfgang Schäuble said they believed that the worst of the euro crisis had passed. European Commission President Jose Manuel Barroso joined the chorus late last week.

But for crisis late-comer Cyprus, the worst is almost surely still to come. Even more concerning for the Mediterranean island nation, Germany's opposition Social Democrats (SPD) now say they are considering voting against a badly needed aid package for the country. And the Green Party is skeptical too. With Chancellor Angela Merkel no longer able to rely on her own parliamentary majority to push through euro-zone bailout packages, help for Cyprus may not be forthcoming.

 

(emphasis added)

So why is poor Cyprus going to be left out in the cold? After all, it is in trouble mainly because its banks had to eat two Greek defaults in a row. Wait for it…


“As things currently stand, I can't imagine German taxpayers bailing out Cypriot banks, whose business model depends on abetting tax fraud," SPD head Sigmar Gabriel told the Süddeutsche Zeitung in comments published Wednesday. "If Ms. Merkel wants SPD support for a Cyprus aid package, she will have to have excellent arguments. At the moment, however, I don't see what those might be."

The SPD is not alone in its concern over the planned aid package for Cyprus. Other euro-zone capitals and many in Brussels are likewise wary of propping up the banking industry there due to its having become a favorite destination for money from Russian oligarchs. The country is widely seen as a tax haven.”

 

(emphasis added)

Taxes in this Mediterranean backwater are simply too low! We can't have that! It's an evil tax haven! Besides, their banks accept deposits from – gasp! – Russian oligarchs! That's actually Western media-speak for 'rich people who hail from Russia'. As far as we're aware the original 'oligarchs' got the boot from none other than Vladimir Putin, who was at the time not exactly heaped with praise for doing that. Damned if you do, damned if you don't.

So in other words:  the eurocrats first pushed through the Greek PSI deal and the 'secondary haircut' (disguised as a harmless 'buyback') so that private sector investors in Greek bonds lost about 70% of their investment twice in a row. That inevitably ruined the Cypriot banks, which held quite a bit of Greek sovereign debt.  And now they want their pound of flesh from Cyprus before they agree to help. You can already guess what that is from the above: raise taxes! Will Ireland's 12.5% corporate tax be on the agenda next? The eurocrats are still fuming that Ireland didn't give in on that and the country isn't out of the woods yet – it too will reportedly require more help with its insolvent banks.

However, all of this might turn into a bit of a miscalculation if Cyprus becomes the next crisis trigger in the process – which it may or may not, given its small size. Who ends up paying for the resulting mess if that happens? Our guess would be every holder and user of the euro, as the ECB will then likely crank up the printing presses as promises alone will no longer work. Mind, we're not saying that anyone should be bailed out – we're merely pointing out the inescapable logical progression should a refusal to help Cyprus end up reigniting crisis conditions over a wider area, based on the 'the euro is irreversible' mantra.

Moreover, it appears now that the eurocratic centralizers and 'tax harmonizers' are trying to use the bailouts as a carrot and stick to force recalcitrant low tax jurisdictions into raising their taxes so as to snuff out tax competition. This will ultimately end with EU citizens everywhere paying the maximum amount of taxes imaginable. Hitherto tax competition provided a welcome check on the ambitions of politicians in the high tax countries. We're not surprised to see the socialist Sigmar 'light-bulb killer' Gabriel in the forefront of trying to bring an end to the relative freedom from onerous taxation enjoyed by the people of Cyprus.

 


 

cyprus-holiday-deals1

Sun,  sea, and low taxes…clearly they're having too much fun in Cyprus!

(Photo via content-mag.com)

 


 
 

Emigrate While You Can... Learn More

 
 

 

Dear Readers! We are happy to report that we have reached our turn-of-the-year funding goal and want to extend a special thank you to all of you who have chipped in. We are very grateful for your support! As a general remark, according to usually well informed circles, exercising the donation button in between funding drives is definitely legal and highly appreciated as well.

   

Bitcoin address: 1DRkVzUmkGaz9xAP81us86zzxh5VMEhNke

   
 

Your comment:

You must be logged in to post a comment.

Most read in the last 20 days:

  • French labour union workers and students attend a demonstration against the French labour law proposal in Marseille, France, as part of a nationwide labor reform protests and strikes, March 31, 2016. REUTERS/Jean-Paul Pelissier/File PhotoHow the Welfare State Dies
      Hollande Threatens to Ban Protests Brexit has diverted attention from another little drama playing out in Europe. As of the time of writing, if you Google “Hollande threatens to ban protests” or variations thereof, you will find Russian, South African and even Iranian press reports on the topic. Otherwise, it's basically crickets (sole exception: Politico).  Gee, we wonder why?   They don't like him anymore: 120.000 protesters recently turned Paris into a war zone. All...
  • The-answer-is-yesToward Freedom: Will The UK Write History?
      Mutating Promises We are less than one week away from the EU referendum, the moment when the British people will be called upon to make a historic decision – will they vote to “Brexit” or to “Bremain”? Both camps have been going at each other with fierce campaigns to tilt the vote in their direction, but according to the latest polls, with the “Leave” camp’s latest surge still within the margin of error, the outcome is too close to call.   The battle lines are...
  • water houseA Market Ready to Blow and the Flag of the Conquerors
      Bold Prediction MICHAELS, Maryland – The flag in front of our hotel flies at half-mast. The little town of St. Michaels is a tourist and conference destination on the Chesapeake Bay. It is far from Orlando, and even farther from Daesh (a.k.a. ISIL) and the Mideast.   St. Michaels, Maryland – the town that fooled the British (they say, today). Photo credit: Fletcher6   Out on the river, a sleek sailboat, with lacquered wood trim, glides by, making hardly a...
  • nails-in-a-bed-of-nails-new-yorker-cartoonGoing... Going... Gone! The EU Begins to Splinter
      Dark Social Mood Tsunami Washes Ashore Early this morning one might have been forgiven for thinking that Japan had probably just been hit by another tsunami. The Nikkei was down 1,300 points, the yen briefly soared above par. Gold had intermittently gained 100 smackers – if memory serves, the biggest nominal intra-day gain ever recorded (with the possible exception of one or two days in early 1980). Here is a picture of Haruhiko Kuroda in front of his Bloomberg monitor this...
  • queen_gold-840x501Rule Britannia
      A Glorious Day What a glorious day for Britain and anyone among you who continues to believe in the ideas of liberty, freedom, and sovereign democratic rule. The British people have cast their vote and I have never ever felt so relieved about having been wrong. Against all expectations, the leave camp somehow managed to push the referendum across the center line, with 51.9% of voters counted electing to leave the European Union.   Waving good-bye to...
  • junkThe Problem with Corporate Debt
      Taking Off Like a Rocket There are actually two problems with corporate debt. One is that there is too much of it... the other is that a lot of it appears to be going sour.   Harvey had a good time in recent years...well, not so much between mid 2014 and early 2016, but happy days are here again! Cartoon by Frank Modell   As a brief report at Marketwatch last week (widely ignored as far as we are aware) informs us:   “Businesses racked up debt in the...
  • MACAU, CHINA - JANUARY 28: Buildings of Macau Casino on January 28, 2013, Gambling tourism is Macau's biggest source of revenue, making up about fifty percent of the economy.What Could Possibly Go Wrong?
      A Convocation Of Gamblers The Wall Street Journal and BloombergView have just run articles on the shadow banking system in China.  This has put me in a nostalgic mood. About 35 years ago when I was living in Japan, I made a side trip to Hong Kong.   Asia's Sin City, Macau Photo credit: Nattee Chalermtiragool   I took the hydrofoil to Macau one afternoon and the same service back early the next morning.  On the morning trip, I am sure that I saw many of the...
  • saupload_loves-me-loves-me-notA Darwin Award for Capital Allocation
      Beyond Human Capacity Distilling down and projecting out the economy’s limitless spectrum of interrelationships is near impossible to do with any regular accuracy.  The inputs are too vast.  The relationships are too erratic.   The economy - complex and ever-changing interrelations. Image credit: Andrea Dionne   Quite frankly, keeping tabs on it all is beyond human capacity.  This also goes for the federal government.  Even with all their data gatherers and...
  • deflated-souffleThe Fed’s  Doomsday Device
      Bezzle BALTIMORE –  Barron’s, in a lather, says the market is facing the “Two Horsemen of the Apocalypse.” Huh?   Only two? There were four last time!   Supposedly, the so-called Brexit – the vote in Britain this Thursday on whether to leave or remain in the European Union (EU) – and uncertainty over where the Fed will take U.S. interest rates are cutting down stocks faster than a Z-turn mower. But Brexit is a side show. As our contacts in London...
  • rate_hike_cartoon_10.15.2015_largeJanet Yellen’s $200-Trillion Debt Problem
      Blame “Brexit” BALTIMORE – The U.S. stock market broke its losing streak on Thursday [and even more so on Monday, ed.]. After five straight losing sessions, the Dow eked out a 92-point gain. The financial media didn’t know what to say about it. So, we ended up with the typical inanities, myths, and claptrap.   “Investors” are pushing the DJIA back up again..apparently any excuse will do at the moment. The idea may backfire though, as exactly the same thing happened...
  • Brexit supporterGold and Brexit
      Going Up for the Wrong Reason Gold is soaring. It should—and a lot—but in my view not for the reason it is. Indeed gold is insurance for uncertain times, a time that Brexit seems to represent. But insurance is an administrative cost — one must minimize its use.   August gold contract, daily – gold has been strong of late, but this seems to be driven by “Brexit” fears - click to enlarge.   Moreover, insuring against Brexit might ironically be equivalent...
  • cameron at the EUBrexit Paranoia Creeps Into the Markets
      European Stocks Look Really Bad... Late last week stock markets around the world weakened and it seemed as though recent “Brexit” polls showing that the “leave” campaign has obtained a slight lead provided the trigger. The idea was supported by a notable surge in the British pound's volatility.   Battening down the hatches...   On the other hand, if one looks at European stocks, one could just as well argue that their bearish trend is simply continuing – and...

Austrian Theory and Investment

Support Acting Man

Own physical gold and silver outside a bank

Archive

j9TJzzN

350x200

Realtime Charts

 

Gold in USD:

[Most Recent Quotes from www.kitco.com]

 


 

Gold in EUR:

[Most Recent Quotes from www.kitco.com]

 


 

Silver in USD:

[Most Recent Quotes from www.kitco.com]

 


 

Platinum in USD:

[Most Recent Quotes from www.kitco.com]

 


 

USD - Index:

[Most Recent USD from www.kitco.com]

 

THE GOLD CARTEL: Government Intervention on Gold, the Mega Bubble in Paper and What This Means for Your Future

 
Buy Silver Now!
 
Buy Gold Now!
 

Oilprice.com