White House Watching Cyprus Drama

news-us-eurozone-cyprus-riskWorried that a possible collapse of Cypriot banks could trigger market jitters, the U.S government is monitoring a pending vote by the Cypriot Parliament to decide whether to confiscate up to 9.9 percent of bank accounts to help pay for a bailout.

A White House spokesman, Jay Carney, said that the administration of President Barack Obama believes that, “A strong, stable Europe is in the interest of the United States.”

He declined comment on the idea of seizing money from bank accounts. “Apparently, we are monitoring Cyprus situation closely at the moment. It is important that Europe makes the essential steps in order to develop and to cope with the problem of Cypriot debt,” he said.

Some analysts have said the idea could spark a run on banks if implemented and characterized it as “legalized bank robbery” and could undermine faith in the European banking system.