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Impact of Cyprus rejecting tax plan

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    All-Star panel weighs in

  • Duration 5:34
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-- -- -- -- -- -- -- -- -- Absolutely.

I -- -- that these.

Approach.

Would cover.

Maybe.

That the demand content depends on the economy this is a lose lose situation for us.

There's -- and you know events hitting it and we do that 'cause these -- -- we'll have we won't have a -- around tomorrow morning.

Because I believe that the community of our -- system has been.

-- believe being destroyed.

-- -- said the parliament there voted down this controversial plan to take out.

Some from savings deposits for this bailout that they need.

But now what we're back with the panel Jason Germany's finance minister saying tonight.

That it's unclear whether the banks in Cyprus will ever be able to open again.

-- parliament in Cyprus must think that determines are bluffing giving.

The way they voted down this deal -- stocks fell today too so clearly the markets think the situation is not over that's gonna get worse.

Before it gets better and they're probably right -- on a fundamental level.

The EU leaders -- -- to couple way to force these countries to be able to pay their bills and they've been -- unable to do that since look at the just throwing things at the wall to see what sticks look.

The bailout in Spain is different from the one in Ireland different from the one and porch console port.

Here they're trying to get depositors to help recapitalize.

The banks and end the process of doing this and run around the protocol for senior creditors.

It just created a -- kinds of problems.

Of its own but -- of this this global crisis that is far from over I think.

I mean maybe it doesn't seem like and they were not into this plan but they don't have another one right.

-- this -- so many alarming questions starting with what is plan B.

Will the Germans had him -- tolerate continuing to bail.

-- these fragile nations.

Isn't a bailout supposed to and inspire confidence among depositors.

Will the -- survive will there be contagion and runs on banks and other countries but I don't think it actually raises the question that deposit insurance you know -- and I don't think it's something that you know we're gonna sit around them.

Compare ourselves to -- yet it could have market impacts obviously if it goes beyond Cyprus.

And look if you have a loss of faith.

Throughout Europe and the safety of -- -- -- and we really haven't.

From my hands as Americans but what's so hard to understand is Cyprus is a tiny country two million people.

The amount of money he was -- six billion dollars.

You know and a continent with a you know 100000000001620.

Trillion -- -- dollars worth of an economy.

And in order to recoup that amount of money.

It decides to undermine faith people have in their deposits is as if here it was declared it yes you have some safety deposit.

Insurance however we're going to take.

10% of your savings tomorrow it'll disappear.

And that will cause a run on the banks and though he's like Sarajevo you know this is a very small -- -- country very small incident but it can be a long -- Back here in the states California has this.

Now this deal a 50% tax break for small businesses and startups.

The taxpayers they got a letter saying.

There's no way no longer able to take that even if they took -- over the past five years now they have to pay that up I take a listen -- just.

How would you feel if you made a decision for years ago that you knew absolutely knew was legally grass.

Have four years later and governing body came and said no it's not correct now you -- -- a bunch more money and we're gonna charge you interest on money that you didn't even know you.

It's hard story.

Well it's it's a little -- that too much sympathy for some of these business owners who after all many of whom back the tax hike.

Initiative by Jerry Brown that was on the ballot in November which was also.

Right -- active retroactive but that's sad yes high taxes are bad for business which is why low tax states like Texas.

How you are are are drawing a lot of businesses -- have lower unemployment rates.

It is I was actually gonna -- -- -- this is why people are leaving California because.

That -- these you know state budgets are broken they're trying to raise taxes on everybody and attend the states with the lowest taxation and regulation -- -- most businesses.

But it's especially cruel when you've given out something like that -- is to encourage small business to then take it back retroactively with interest -- and it's it's really.

That's.

A little extreme he's not ciphers what -- extranet -- Charles.

I think we do you have to revise our.

Doomsday pronouncements.

We had been saying you have to know America's head of the way you -- I would say ten of the way if Cyprus.

Because if you start to confiscate people's money to retroactively.

He had a real problem and and I guess I think if you you put the -- of a vote for the people of that state.

You get those same resulted you've got today in Cyprus in the parliament where nobody not a single bit member of the parliament.

Supported an agreement for the government itself had proposed -- government party.

Not one of them.

Voted yes it -- staying entirely.

On a proposal that it had agreed to serve that tells you.

How unpopular it's the state says affected taxpayers can request a waiver hope that lawmakers and the governor can strike -- deal will follow this.

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