26th March 2013
British expats in Spain, Italy, Portugal and Greece are increasingly seeking advice on transferring their funds outside their adopted countries, according to international IFA deVere Group. The adviser says that fears are mounting that the Cyprus deposit raid might not be the “one-off” measure it was claimed to be.
DeVere Group chief executive Nigel Green points out that the Dutch MP and President of the Eurogroup, Jeroen Dijsselbloem has said that the deal in Cyprus – in which depositors who have more than 100,000 euros could lose up to 40 per cent of their money to fund the bailout – could serve as a “template” for future bailouts in the rest of Europe.
The comments come at the UK tells expats in Cyprus to open UK bank accounts if they wish to receive their pensions as the Telegraph reports.
Green adds: “Despite an official issuing a corrective statement within three hours of Mr Dijsselbloem’s comments, asserting that “no models or templates are used,” markets plummeted in response.”
“Template or no template, the damage has already been done as the slip of the tongue effectively confirmed what people have been thinking since the idea to raid depositors’ savings in Cyprus was first mooted last week – that if this controversial plan goes ahead it will be extrapolated to prop-up other vulnerable banking sectors in Europe,” Green adds.
“Similarly, with officials even publicly suggesting – as they did to much outrage originally – that deposits of under 100,000 euros, which are supposed to be protected by the state under EU law, could be hit, it carries the implication that such a move is very much on the table.
“As a direct consequence, more and more expats in Spain, Italy, Portugal and Greece are now not unreasonably worried for their deposits in these countries. Over the last week, since the messy deal to bailout Cypriot banks began, our financial advisers in these areas have reported a significant surge in enquiries from expats who are looking to safeguard their funds in other jurisdictions which are perceived to be safer.
“Whether the institutions like it and accept it or not, there is a real risk of a major deposit flight from these countries as people feel their accounts could be plundered next. We are, clearly, living in exceptional, unprecedented and uncertain times in the eurozone and a growing number of expats are, perhaps unsurprisingly, seeking advice on mitigating the effects of the Cyprus deal potentially being used as a template for action elsewhere,” he adds.