Flying money

Talk about money behaving badly.

I'm just reading about the whole situation with the banks in Cyprus and the government’s savings tax plan.

According to the Guardian, 'an RAF flight carrying €1m (£850,000) in low denomination notes set off for Cyprus to provide cash for 3,000 British service personnel based on the Mediterranean island'. Apparently, ‘banks have been shut since Friday and electronic transactions halted, although cash machines are still working and the Ministry of Defence said the euros were being flown in as "contingency measure"’.

Serious measures indeed. In the past few years of the global financial crisis – from the near-collapse of the banking system to the more current Eurozone troubles – this hits a new 'high' in terms of crisis. Sure, the Northern Rock worries sparked a mini-bank run here in the UK back in 2008, and the IceSave debacle saw lots of UK savers – including city councils and charities – caught when IceSave's parent bank Landsbanki went bankrupt. But these people eventually got their money back because their deposits were covered under the UK’s Financial Services Compensation Scheme, and the UK government covered the rest. And it was just one bank, and people still had money in other banks. 

But with all the banks in Cyprus closed to avoid a bank run, this means that people are not able to get to their money.Let's not even go into the absurd notion to levy a tax on people's savings, which triggered the Cypriot panic in the first place. Just imagine not being able to access your money.

Love it or hate it, we all need money to be able to live, and not being able to access what you have in the bank must be so scary. We all take ATM machines - and our access to our money for granted. So imagine what it must be like to lose that access or worse, to see your savings lose their value.  It reminds me of stories about ‘banana money’ during the Japanese occupation of Malaya, and how it had no value when the war ended. It makes me think those in Libya who lost their property which were seized by the government under Gaddafi’s rule, as depicted in Hisham Mattar’s book In the Country of Men.

It really does make me think about our relationship with money, and how dependent we are on money as a means to an end, whether it is to achieve the necessities of food, shelter, health, and education, or to go beyond needs to satisfy wants.  

So as much as some of us may hate to admit it, money does indeed make the world go round. Otherwise, why the need to fly in money to a cash-locked island.