"Haircut"...or amputation?!

CNN Money
Cyprus struck a deal with EU officials on a €10 billion aid package to shore up the country's banking sector. The plan will impose a levy on account holders with more than €100,000 at the two biggest banks -- the Bank of Cyprus and Popular Bank of Cyprus. (Popular Bank will be broken up immediately, and its viable assets will be integrated into the Bank of Cyprus.) While the exact percentage has not yet been determined, the levy on Popular Bank depositors could raise about €4.2 billion ($5.5B) towards the bailout deal, with shareholders and bondholders likely to be wiped out.
================================================================
If I had any money in any bank right now, I'd take it out and hide it in my attic. With interest in the sub-2% area, it's not worth the risk to principal that this new totalitarian mechanism represents. HOW CAN THE GOVERNMENT JUSTIFY CONFISCATING PRIVATE ASSETS??!