Foundation for Family Businesses: Cyprus rescue seeds distrust in the currency
The Chairman of the Executive Board of the Foundation for Family Businesses, Prof. Dr. Dr. hc Brun-Hagen Hennerkes spoke at the WELT-Monetary Conference, organized by the Foundation for Family Businesses and the daily newspaper"Die Welt". He warned about the serious consequences of the Cyprus-rescue for confidence in the euro. "Whoever strips all savers, up to a certain threshold, of responsibility does something very serious: He sows distrust in the reliability of money. This is a terrible prognosis for future financial crises,". It is not surprising therefore that some bank account holders in Germany are currently withdrawing their deposits.
The Cyprus-rescue dangerously mixes up the roles of the shareholder of a bank and the account holder. The account holder wants to participate primarily in monetary transactions and must be protected. The position of a bank shareholder or bond purchaser, who profits from investment by way of increased dividends and interest income needs to be evaluated differently. "It is only right if he - and not the taxpayer – must also answer for losses," said Hennerkes.
The Foundation for Family Businesses would like to see a smoothly functioning common currency system. "We need a currency, whose open and hidden costs in no way affect the core competitiveness of the German Family Business," demanded Hennerkes.
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