Cypriot bank-account holders’ efforts to protect their deposits during bailout talks fed concerns among Germans that their own savings may be at risk, according to a poll.
Some 67 percent of Germans “greatly” or “somewhat” fear for their savings after an initial rescue plan for Cyprus included an unprecedented tap of bank deposits, a Forsa GmbH poll for RTL Television and Stern magazine showed. The country’s lawmakers unanimously rejected the proposal, part of a move to avert Cyprus’s insolvency.
Chancellor Angela Merkel had insisted that Cyprus’s banking sector “must contribute to the sustainability” of the nation’s debt.’’ While she has been called the “Teflon Chancellor, able to deflect problems and criticisms without showing any scars,” the Cypriot crisis hurt Merkel’s image as the “Iron Chancellor,” Stern said today in a commentary on the poll.
European Union-wide deposit guarantees, forged in 2008 after Lehman Brothers Holdings Inc. collapsed, contain a caveat highlighted by the Cyprus crisis that’s left savers from Nicosia to Nuremberg pondering the legal pledges. The guarantees are “only as good as the solvency” of the state, German Finance Minister Wolfgang Schaeuble said on March 19.
“Nobody has to be worried” about Germany’s solvency, Schaeuble said. The initial Cyprus proposal was a “singular” step in the history of the debt crisis, forced upon the Eurogroup to drum up a sufficient contribution from the island’s banks, Schaeuble said. After Lehman, Germany augmented a pledge of the private sector to guarantee bank deposits.
Merkel’s spokesman, Steffen Seibert, also said on March 19 that German deposits are safe.
The poll showed that 54 percent are skeptical about Schaeuble’s assurances and don’t believe their savings are safe. Some 41 percent said they consider German deposits to be “secure.”
The Forsa poll of 2,504 people showed Merkel’s Christian Democrats gaining a point to 41 percent in the week, a sign that respondents supported her policy toward Cyprus before the March 24 summit that clinched a new rescue plan for the island. The survey was conducted from March 18 to March 22.
Dutch Finance Minister and Eurogroup head Jeroen Dijsselbloem said imposing losses on depositors and bondholders can be part of the region’s bailout toolkit after such measures were taken to avoid Cyprus’s default.
“We are looking for a way to place risks where they are taken,” Dijsselbloem said yesterday on Dutch television program “Pauw & Witteman.” His comments echo those of Merkel, who lauded a new Cyprus rescue plan that taps deposits larger than 100,000 euros ($129,000) at two banks, saying it targets those “who caused these faulty developments.”