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Cyprus Bank Deposits Tax Sparks Bank Run

Cyprus has recently received 10 billion euros-worth of bailout money from the IMF.

Because of the large Greek population and tight historic and economic links to Greece, Cyprus was badly affected by the crisis across the sea.

Cyprus has also agreed to raise taxes, but (as opposed to Hungary's government), the Cypriot government is taxing the bank account holders, not the banks.

According to the new law, anyone with deposits less than 100,000 euros held at banks will have to pay a one-time tax of 6.75 %.
Those who have more will have to pay 9.9 %.

The government is expecting to raise 5.8 billion euros from the population, this way.

The reaction of the population was a run on the banks to withdraw their money.

It's worth mentioning that Cyprus is a popular place for off-shore bank deposit holdings. Various Europeans, including many Russians hold immense amounts of money at banks in Cyprus.
There are speculations saying that Russia might "rush in" to extend the 10 billion euro bailout money to help Cyprus - for fear of indirect effects on Russian citizens and their economy.

Markets across Europe suffered as a result of the events in Cyprus and gold again, has spiked to levels above 1,600 $..

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