Deutsche Bundesbank researchers have examined the IMF’s proposal for a one-off levy applied to the assets of citizens in the face of a future economic crisis. In 2012 Cypriots had a 6.7 per cent or 9.9 per cent levy imposed on their savings with 100,000 euros the divisor, but this would be much wider in scope and depth.
The Bundesbank’s Discussion Paper No 29/2014 concluded that “the results suggest that the one-off levy may be considered as a relatively attractive alternative for the deleveraging of high debt crisis countries on the verge of a national emergency.’’
Such a national emergency could come if the Greek election were to result in a Syriza government which sought to terminate the terms of the Greek bailout, and default. But that emergency would not be confined to Greece; it would be EU-wide, especially if the Greeks did the sensible thing and exited the euro, which would cause a chain reaction.
EU citizens in other countries, perhaps all EU countries, could then be faced with having not only savings, but the value of homes and everything they owned taxed at up to 10 per cent in this “attractive’’ levy to prop up the euro which would come under immense pressure from speculators.
In 2012 European Central Bank President Mario Draghi stated he would do whatever it takes to save the euro. Was this levy what he had in mind?