Cyprus has voted strongly to reject the Eurozone demand for a "bank deposit tax" as a requirement for getting an EU-IMF bailout:

We almost stopped believing it was possible, but apparently some lawmakers in European debtor states still have the guts and ability to stand up to their cocky, greedy and reckless foreign creditors. On Tuesday, an overwhelming majority of Cypriot MPs spectacularly voted against a bank deposit tax imposed by the Troika of lenders — with not a single MP voting in favor, despite the President’s warning that a no-vote would lead to financial armageddon. The tax was a prerequisite for Cyprus to receive its 10 billion euro EU-IMF bailout; the country’s dramatic act of defiance now leaves the eurozone reeling in great uncertainty as to the repercussions for the single currency.

What, exactly, is a "bank deposit tax"? It's just old-fashioned redistribution of wealth, in which everyday folks are expected to foot the bill for banking interests. (We know all about that, don't we?)

And what's at stake?

The 10 billion euro emergency loan alone will already push Cyprus’ debt-to-GDP ratio to an unsustainable 130%, forcing an unprecedented degree of austerity onto the country — the likes of which would make even the Greek plight look like a walk in the park. But more importantly, perhaps, Cypriot depositors were rightly outraged by what effectively amounted to a government raid (spurned on by foreign creditors) on their hard-earned savings. While wealthy bondholders were once again let off the hook, ordinary Cypriots were forced to pay for the reckless behavior of their shady offshore banking sector and the irresponsible crisis management policies pursued by the European Union and IMF.

Reporters at the New York Times are referring to austerity measures as "strong medicine." But as William Black points out on the Huffington Post, that's a stupid and false metaphor:

The usual austerity metaphor is to "medicine." Medicine may taste terrible and cause one brief pain, but only the most childish would fail to take their medicine because it briefly makes our lips curl in distaste.

The economic truth, however, proved repeatedly during this crisis, is that austerity is to "medicine" as bleeding a patient was to "health care." It violates the Hippocratic Oath's central precept that the physician must "do no harm." The bubbles cracked in 2006, and the Eurozone has been inflicting austerity on its population for over five years. No one serious, and honest, in their reporting can use the medicine metaphor....

Has the NYT ever had Krugman spend two hours educating its financial reporters about austerity and the euro's design defects? That would be one of the best investments it could ever make in raising the quality of its reportage on these issues.

As a side note, Cyprus—like Greece—is seeing a strong uptick in neo-Nazi and racist nationalist political movements, probably as a side-effect of its economic crises. Nazis seem to grow best in poor, panicky soil.

Meanwhile, Slovenia could become the next Cyprus and the whole Eurozone could slide into collapse. What would Zizek, probably the world's most famous Slovenian, do?

This is why the solution is not just more regulation to prevent money laundering and so on, but a radical change in the entire banking system – to say the unsayable, some kind of socialisation of the banks. The lesson of the worldwide crashes after 2008 is clear: the whole network of financial funds and transactions, from individual deposits and retirement funds to the functioning of all kinds of derivatives, will have to be somehow put under social control, streamlined and regulated.

That sounds like a more responsible and lasting solution than a nationwide "bank deposit tax" in exchange for a bailout, crippling austerity, cosmetic reforms, and no reason to believe a crisis wouldn't just repeat itself.

But we'll see what happens.