If I was Greek or Italian or Spanish with money in one of their banks then I would start to get worried that I would be next in line to lose part of my savings. So I withdraw it, place it overseas or somewhere else. Others join in fearing the safety of their money in the banks. There is a bank run and the banks get in difficulty. Not so far fetched and this is what this policy could trigger.
"....do you trust our politicians to act in our interest or their own?"
Think about what you've said - are you not aware that politicians are only in their jobs because we voted for them? It's very much in their interests to act in our interests, so we re-elect them, come polling day.
What would you do, faced with the same situation? Cyprus is in a desperate situation - would you stand aside and watch your country slide into a catastrophic bankruptcy, or would you try to act to control the situation?
I don't know enough about the Cypriot problem to be able to comment on the wisdom of the imposition of this levy. It does sound like a pretty grim step to take, but the alternative might be much worse in the end.
What they should do is leave the Euro, take back control of their currency and devalue it.
What I certainly would not do is impose a draconian charge on the entire electorate! How the government feel that will endear themselves to the population so that come polling day the lemmings will vote for them again, I cannot fathom!
It certainly doesn't seem like a vote winner to me!