THE DAILY TELEGRAPH: Bank runs and financial panic could spread across Europe after Cyprus proposed raiding people's savings for a new bail-out, Alistair Darling has said.
The former Chancellor said Cyprus is doing "everything you should not do" after the tiny country decided to seize around 6.75 per cent from smaller deposits and almost 10 per cent from larger ones.
The country is currently deciding whether to make richer savers pay a bigger proportion of the bill but Mr Darling said the whole idea of taking money from ordinary savers is dangerous.
He said EU should not be letting Cyprus "blow apart" the principle of protecting deposits under €100,000, as people will start pulling their cash out of banks if they fear this elsewhere.
"It seems to me to make it more likely that if you’re a saver in Spain or Italy, if you have a sniff of the EU or the IMF coming your way you’ll take your money out and you’ll get a run on the bank," he told BBC Radio Four's Today programme.
"So what they’re doing is everything you should not do when you’re trying to solve a problem like this." » | Rowena Mason, Political Correspondent | Tuesday, March 19, 2013
