Cyprus: sunny doesn't equal safe

A timely reminder.

The recent announcement by the Cypriot government regarding the levy on savings accounts has caused a bit of a stir, to say the least, even though it's now been defeated. 

Depending on your vantage point, it can be seen as an unlawful expropriation of assets or a desperate measure to secure the EU bailout package, or somewhere in between. But whatever your stance, the overriding concerns must be:

1. At what cost (in terms of national and international confidence)?
2. And will it set a precedent for other governments facing similar economic problems? I am sure other governments will be observing the ripples closely, anxious to avoid a tsunami on their own shores.

While bank bashing is currently all the rage (both onshore and offshore), it's a salutary reminder to those looking for a depositary jurisdiction to consider all the pros and cons - not just fiscal - of the recipient jurisdiction.

To the layman, it might appear that the sunnier the clime, the lower the tax rate, which certainly has its appeal. However, as recent events have shown, it is vital to look closely at political stability and robust regulation as well as the fiscal climate when forum shopping.

As Marios Skandalis (perhaps an unfortunate surname in the circumstances), vice president of the Cyprus Institute of Certified Public Accountants, points out: "The whole banking system is based on trust. If the trust is lost, the whole system is going to collapse."

This must be a lesson for everyone. Surely a banking system based on rigorous financial regulation and complete transparency rather than trust, would fare better? Then the (incorrect) analogy between the atmospheric climate and the economic climate would no longer be drawn.

Sophie Mazzier is counsel at private client firm Maurice Turnor Gardner LLP

This blog first appeared on Spear's.

Photograph: Getty Images
Ukip's Nigel Farage and Paul Nuttall. Photo: Getty
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Is the general election 2017 the end of Ukip?

Ukip led the way to Brexit, but now the party is on less than 10 per cent in the polls. 

Ukip could be finished. Ukip has only ever had two MPs, but it held an outside influence on politics: without it, we’d probably never have had the EU referendum. But Brexit has turned Ukip into a single-issue party without an issue. Ukip’s sole remaining MP, Douglas Carswell, left the party in March 2017, and told Sky News’ Adam Boulton that there was “no point” to the party anymore. 

Not everyone in Ukip has given up, though: Nigel Farage told Peston on Sunday that Ukip “will survive”, and current leader Paul Nuttall will be contesting a seat this year. But Ukip is standing in fewer constituencies than last time thanks to a shortage of both money and people. Who benefits if Ukip is finished? It’s likely to be the Tories. 

Is Ukip finished? 

What are Ukip's poll ratings?

Ukip’s poll ratings peaked in June 2016 at 16 per cent. Since the leave campaign’s success, that has steadily declined so that Ukip is going into the 2017 general election on 4 per cent, according to the latest polls. If the polls can be trusted, that’s a serious collapse.

Can Ukip get anymore MPs?

In the 2015 general election Ukip contested nearly every seat and got 13 per cent of the vote, making it the third biggest party (although is only returned one MP). Now Ukip is reportedly struggling to find candidates and could stand in as few as 100 seats. Ukip leader Paul Nuttall will stand in Boston and Skegness, but both ex-leader Nigel Farage and donor Arron Banks have ruled themselves out of running this time.

How many members does Ukip have?

Ukip’s membership declined from 45,994 at the 2015 general election to 39,000 in 2016. That’s a worrying sign for any political party, which relies on grassroots memberships to put in the campaigning legwork.

What does Ukip's decline mean for Labour and the Conservatives? 

The rise of Ukip took votes from both the Conservatives and Labour, with a nationalist message that appealed to disaffected voters from both right and left. But the decline of Ukip only seems to be helping the Conservatives. Stephen Bush has written about how in Wales voting Ukip seems to have been a gateway drug for traditional Labour voters who are now backing the mainstream right; so the voters Ukip took from the Conservatives are reverting to the Conservatives, and the ones they took from Labour are transferring to the Conservatives too.

Ukip might be finished as an electoral force, but its influence on the rest of British politics will be felt for many years yet. 

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