I have updated the population data (thanks to @Frank_McG) and in addition I have taken into account wealthy Cypriots (in excess of EUR 100k holdings). I still stress that while these are professional estimates, they are just that, estimates.
For anyone who wants more details of my guesstimates, feel free to contact me or email me. Happy to explain.
So what is going to happen in Cyprus?
I tweeted yesterday that “This will turn into a) a farce b) a revolution c) a farce of a revolution”
I still stand by this. Make no mistake, these are extremely dangerous times. What the EU did was set off a potential powder keg. If not managed properly, this can gain momentum and bad things will happen. As in people will get hurt.
The thing about politics and public opinion is that when things gain momentum they are hard to contain. Nothing fuels the fire of unrest more than uncertainty and the Cyprus situation is full of uncertainty.
It hasn’t helped matters that once the (colossally bad) decision was made about the “tax” on deposits, then just a few hours later everyone started to back track.
The bank “holiday” has now been extended to Thursday. Anyone feeling relaxed and on holiday now? No. I didn’t think so. This decision to keep banks closed in Cyprus only adds fuel to the fire of uncertainty.
Also there is uncertainty about what the “tax” will be. There are all kinds of rumours doing the rounds about a 15% tax on deposits above EUR 500k, and those under EUR 100k would be exempt.
Trust me, the banker, on this guess: In a tiny country with systemic corruption deposits in excess of EUR 500k have mostly been transferred to assets that are not in scope of the new “tax”.
I have also seen rumours about a threshold of EUR 20k, in which those with under would be exempt from the tax. (Interesting that the number coincides with my yesterday’s estimate of average Cypriot savings, perhaps someone in the Cypriot government has been reading this blog).
From a purely cynical and political point of view this would make the most sense. It would be a divide and conquer tactic: Those with under EUR 20k would give a huge sigh of relief and those with above would be offended, but anyone with under EUR 20k would look at those with above as being “rich” and there wouldn’t be such support for them. It might very possibly calm things down.
Here are the new calculations as you can see, even after revisions the numbers do not change much and are pretty much in line with my originals.