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Amid turmoil following the Cypriot Parliament’s rejection on March 19 of a plan to tax bank deposits as a condition of them receiving €10bn in EU-IMF bailout funds, there is a growing fear of capital flight from European banks in other countries.
The Cyprus decision to reject a plan to tax bank accounts containing more than €20,000 has nonetheless spooked savers in other countries. It has sparking concerns that account holders in other debt-hit countries, such as Spain, may race to withdraw their money and deposit it in accounts based in more financially secure countries.
In Spain, domestic savings total €864bn and represent 51.6 per cent of all money held in the country's banks.
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