The initial announcement by the European Bank and also the IMF of the rescue of the Cyprus banking system which included measures to take a percentage from all customers accounts above and below 100,000 euros did seem particularly inept. Banks picking on the small customer and taking hard earned cash from their accounts after all the bailing out of European banks by European taxpayers did seem an extraordinary own-goal.
Certainly that was what the media thought and a media firestorm followed starting on Friday and going over the weekend. Even the UK's Financial Times expressed strong concerns as well as the BBC's Robert Peston, a highly influential financial commentator, highlighting that it went against more recent financial developments of protecting small investors across Europe. Round the world the story has played to a continuing media agenda that Europe is not properly sorted out, just the type of headlines which Europe and the EU have been working hard to move on from.
How did it happen? It certainly suggests there was no insight of the impact of the story on local, international media and in turn wider public opinion. Interestingly it appeared that there was no announcement made on the ECB web site suggesting a lack of insight over its significance or it was seen as a technical event not with wider significance requiring PR input. Today's FT highlights how damaging it has become to European banking raising serious questions about protection for small savers across the EU with one banker saying “This is a totally crazy decision,” said one European bank chief. “This is the biggest policy mistake that the [European Central Bank] has subscribed to.”
The story is also rather a good example of the impact of generalised public opinion on events which in this case is or has the potential to be a crisis event. Public opinion fanned by intensive media coverage some of its hostile to Europe along with market concerns is now forcing the authorities to react. Pictures of citizens queuing up to take money out of a bank carries considerable power and understandably banks in Cyprus are now closed till Thursday. Were the interests of ordinary citizens put beneath the interests of key stakeholders such as Russian large account holders, the major banks and bondholders? Was there any consideration of wider public sphere discussions as certainly the ECB were setting a terrible precedent and we can thank public opinion and the media for ensuring that a more considered position on ordinary savers deposit accounts will finally evolve. Inge Jensen says in her excellent paper on emerging functions of the public sphere (2001) that "essential aspect of public relations (is) concerned with issues and values which are considered publicly relevant, which means relating to the public sphere." This dimension appeared to be missing from the discussions last week at the ECB.
Certainly that was what the media thought and a media firestorm followed starting on Friday and going over the weekend. Even the UK's Financial Times expressed strong concerns as well as the BBC's Robert Peston, a highly influential financial commentator, highlighting that it went against more recent financial developments of protecting small investors across Europe. Round the world the story has played to a continuing media agenda that Europe is not properly sorted out, just the type of headlines which Europe and the EU have been working hard to move on from.
How did it happen? It certainly suggests there was no insight of the impact of the story on local, international media and in turn wider public opinion. Interestingly it appeared that there was no announcement made on the ECB web site suggesting a lack of insight over its significance or it was seen as a technical event not with wider significance requiring PR input. Today's FT highlights how damaging it has become to European banking raising serious questions about protection for small savers across the EU with one banker saying “This is a totally crazy decision,” said one European bank chief. “This is the biggest policy mistake that the [European Central Bank] has subscribed to.”
The story is also rather a good example of the impact of generalised public opinion on events which in this case is or has the potential to be a crisis event. Public opinion fanned by intensive media coverage some of its hostile to Europe along with market concerns is now forcing the authorities to react. Pictures of citizens queuing up to take money out of a bank carries considerable power and understandably banks in Cyprus are now closed till Thursday. Were the interests of ordinary citizens put beneath the interests of key stakeholders such as Russian large account holders, the major banks and bondholders? Was there any consideration of wider public sphere discussions as certainly the ECB were setting a terrible precedent and we can thank public opinion and the media for ensuring that a more considered position on ordinary savers deposit accounts will finally evolve. Inge Jensen says in her excellent paper on emerging functions of the public sphere (2001) that "essential aspect of public relations (is) concerned with issues and values which are considered publicly relevant, which means relating to the public sphere." This dimension appeared to be missing from the discussions last week at the ECB.
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