Some of the Spanish banks which many ex-pats use

Monday´s shocking headlines of the massive financial problems facing Cyprus has caused savers across all Euro countries concern. In exchange for a 10,000 million euro loan to stop the country facing bankruptcy, the Cypriot Government has been told to impose a tax on savers money deposited in banks - the majority will be charged a tax of 6.75% on savings under 100,000 euros. Those that have over that amount face a 9.99% tax! The crucial debate and vote on the Cypriot deposit levy has been postponed until today and banks in Cyprus will remain closed until at least Thursday. ATM machines ran out of money as people desperately tried to withdraw as much of their savings as possible.

There are many British ex-pats living in Cyprus who will suffer, potentially having their hard earned saving literally stolen by the state. Nervous ex-pats in other European countries are also now fearful, not least those of us living in Spain. With a struggling economy and escalating unemployment it has left many wondering whether the same will or can happen here, in the Governments effort to repay the bailout granted by the European Union.

As much as 30 billion GBP of Russian money is said to be stashed in accounts in Cypriot banks in "money laundering operations" by Russian billionaires who are attracted by the low tax rates. I remember visiting on holiday over 10 years ago and many of the advertising boards were in Russian back then.... one has to wonder whether in it´s bid to attract the Russian market here to Benidorm they are also potentially attracting similar problems? British ex-pats in Cyprus have blamed "dirty Russian money" on the island for Germanys insistence to demand the tax raid on all bank deposits in exchange for the bail out, causing innocent people to suffer.

This seems to have crossed a sacred line and many will be thinking long and hard whether to withdraw any savings they have and keep the cash at home perhaps. If this happens there is also the danger of an increase in the number of house robberies.... Its not as if they are getting much in the way of interest anyway, so come Wednesday it will be interesting to see if there are extra long queues at the banks - today is a Bank Holiday in Spain so all banks are closed, or even money running out at cash machines today!

Over the last few years many banks have been taken over or merged in Spain due to economic difficulties....  Sabadell has taken three over alone; CAM, Solbank and Guipuzcoano, perhaps even more smaller regional ones too. In Alfaz del Pi, a smallish population with 18,000 residents, three branches merged into one and every time I pass the sole branch of Sabadell Solbank there is a queue all the way to the door.