But that's what Cyprus has done, egged on by the European Union:
The euro zone agreed on Saturday to hand Cyprus a bailout worth 10 billion euros ($13 billion), but demanded depositors in its banks forfeit some money to stave off bankruptcy despite the risk of a wider run on savings.
Everybody in Europe is on notice, now. Where do the bank runs start on Monday? Surely, some people are going to think that if Cyprus has gone this route, their country is the logical next country that will confiscate money. This is Willie Sutton territory (When asked why he robbed banks, he said "because that's where the money is." At least according to urban legend, anyway.).
So yes, this man is quite correct:
"They call Sicily the island of the mafia. It's not Sicily, it's Cyprus. This is theft, pure and simple," said a pensioner.
Presumably, the money was already taxed as income of some kind. Now it is being taxed again.
And note that the spenders, who may be broke and dependent on the government because they did not save, paid no penalty for this bailout. That lesson won't be lost on people, either. Who will bother to save money let alone put it in banks?
Remember, this move was designed to allow banks to lend. How does spooking depositors help banks?
I've said that Europe had a dangerous inter-war vibe. Now the economic situation is matching it. I've got a bad feeling about this.
UPDATE: Ok, so Cypriot banks are havens for Russian money laundering crooks and Greek Cypriots haven't cared enough about their shady banking system for either to earn much sympathy (tip to Instapundit). But do the people of already shaky Europe really believe that only crooks will be targetted this way? Really?
A panic is not rational. I'm not so sure that bank depositors in other European countries can be so neatly insulated from the pure and simple theft in Cyprus, even if the EU is just stealing from crooks and promises not to do this to anyone else.
UPDATE: Really, are they trying to crush the European banking system? Tip to Instapundit. And these words of wisdom, too:
I have been predicting the dissolution of the EU for some time. I was expecting a Hollow Men sort of ending, not with a bang but a whimper. It now looks likely that there will be a few bangs after all.
On the bright side, crooks won't rob European banks any more.
UPDATE: Wow. Cyprus can't even pull off a simple bank heist. They really suck:
Frightened savers in Cyprus drained ATMs in a bank run, prompting parliament to postpone a crucial vote Sunday on a levy on all bank deposits, a move creditors had demanded in exchange for €10 billion ($13 billion) in rescue money.
The announcement of the delay set off an immediate scramble among top European financial officials. One lawmaker told The Associated Press that European Central Bank was pressuring Cypriot authorities to hold the vote without delay.
Like reversing or postponing the decision will work. Everyone has notice that their Cyprus deposits are not safe. What fools will keep their money in the banks?
Cyprus wrecked their banks, and that's that. The only question is whether depositors get robbed. This was the plan that the best and brightest of the EU came up with.
UPDATE: Who could have seen this coming?
A plan to seize up to 10 percent of people's savings in the small Mediterranean island nation of Cyprus sent shockwaves across Europe on Monday as households realized the money they have in the bank may not be safe. ...
"The damage is done," said Louise Cooper, who heads financial research firm CooperCity. "Europeans now know that their savings could be used to bail out banks."
Idiots.
