>>>>1. An attempt to soak the rich (especially the Russians) - but to give it a whiff of respectability they decided they had to soak everybody
>>>
>>>Too little to be gained.
>>
>>I got the impression from various articles I read about this, that Russian deposits were a large fraction of the total deposits in play - something like 60% (?)
>
>I would be surprised if for a few billion Euros they would risk a worst case scenario. I read somewhere that they need Euro 10 billion. Surely this is not worth the risks.
>
>
>>>>2. An EU trial balloon. It's easier and less damaging to contain unrest and riots in Cyprus than it would be in Spain, Italy etc.
>>>
>>>Although I'm sure there are many reasons and influences I think this could certanly be one of them. This is testing the waters of how a country might exit the EU. It's a tiny country of no impact to the EU in general. An experiment in EU exit.
>>>
>>>>3. A Lagarde & Co. trial balloon. Basically the same idea but to gauge applicability worldwide, not just in the Eurozone
>>>
>>>I don't think so. There are too many countries where this is simply inconceivable.
>>
>>Argentina? Mexico? Thailand? ...
>
>Yeah, I sort of meant countries like US, CA, UK, Germany, Holland, France, etc. Surely these countries would not dare such a thing? But who knows today anymore.

That's EXACTLY my point. The IMF could be boiling frogs, getting first-world countries used to the idea that their deposits could get confiscated. I can't think of a better test case than Cyprus in its current state - small enough to not matter at a macro level, but a full member of the EU (!)

Confiscating the deposits of ordinary savers - yet another miserable example of good deeds getting punished.

I wonder if Greece and Spain are seeing any flights of capital yet...