British expats living across Europe were warned last night to take their money out of foreign banks in the wake of the Cyprus financial crisis. Nigel Farage has warned that savings in countries that use the euro are no longer safe. Ukip leader Nigel Farage told the party’s spring conference that savings held in countries where the euro is the currency are no longer safe. His warning came as Cyprus last night gave in to EU and International Monetary Fund demands for a 20 per cent levy on deposits over 100,000 euros at the Bank of Cyprus and a four per cent levy on deposits of the same amount at other banks. Yesterday Mr Farage said: “The appalling events in Cyprus over the course of the past week have surpassed even my direst of predictions. “Even I didn’t think that they would stoop to stealing money from people’s bank accounts. I find that astonishing.
“There are 750,000 British people who own properties, or who live, many of them in retirement down in Spain.
“Our message to expats now that the EU has crossed this line, must be: Get your money out of there while you’ve still got a chance.”
He also urged Chancellor George Osborne to make it clear that Britain would never seize money in this way in the hope it can benefit from a huge flight of money out of the eurozone.
His stark “get your money out” warning came as Cyprus raced to qualify for a vital international bailout to avoid a potential bankruptcy that would engulf 12,000 British expat pensioners from midnight tomorrow. The tiny island nation needs to raise 5.8billion euro (£4.95billion) to secure a 10billion euro European rescue that would help it to stay in the currency.
The tax would apply to any Briton with a Cypriot bank account including the 3,000 British servicemen and women. An estimated 25,000 Britons live on Cyprus.
CyprusCypriot MPs are faced with difficult decisions over the bailout. The appalling events in Cyprus over the course of the past week have surpassed even my direst of predictions.
The European Central Bank had said that, after tomorrow, it would pull the plug on further financial assistance for Cyprus’s troubled banks unless a deal was in place. This left the island’s 56 MPs with an unenviable choice, to impose strict curbs on the movement of money and to put the country’s largest banks into receivership or face exit from the euro and a dramatic economic crash.
Earlier yesterday it looked as if Cyprus may have to impose a larger levy on deposits, up to 25 per cent.
The tax has fuelled fears of a run on Cypriot banks if they reopen on Tuesday.
Its banks have been closed for more than a week since the levy was proposed, triggering widespread outrage in Cyprus.
The British Government has frozen £1.2million in state pension payments due to 12,000 Britons living in Cyprus to prevent it being grabbed in a bailout deal.
However, British banks face a £1.3billion exposure to a wholesale collapse of the banking system in Cyprus.
The country is still a major trading partner for the UK.