Mon Sep 26, 2022
September 26, 2022

Cyprus, the True Face of the Euro

Cyprus, a small island with less than a million inhabitants is on everyone’s lips in Europe and worldwide. The beaches of mild temperatures and clear waters of this country are not the reasons capturing the global attention, but the measures of economic warfare that the Troika threw over the country.

On the evening oflast March15 the Eurogroup – meeting of Euro zone finance ministers – threw a genuine blitzkrieg (lightning war) over this country. To move forward on a “help” package of 10 billion Euros to Cyprus, whose financial system found itself severely affected by the negotiation process of the Greek debt, was demanded to charge a “fee on deposits” in the amount of 5.8 billion. So on Saturday, the 16th, in the morning, unlike the usual, the Cypriot banks did not open: the desks were closed and the withdrawals were limited to allow for applying a “fee” of 9.9% on deposits above 100 thousand Euros and 6.7% on the remaining. At the time of this writing, more than ten days later, the Cypriot banks remain closed with no date to be opened.

The assault on Cyprus has shown the true face of the Euro (the European single currency) and has also shown what Merkel and her henchmen are able to do to save the single currency. A suitable excuse is always used: if austerity in countries so far under intervention was justified by the “laziness of the people of the south” in this case the excuse is the fact that Cyprus is a tax haven loaded with Russian capital of questionable origin and this fact would justify the plunder. However, the largest European off shores, where the Russian capital abounds, are located in England, and it is not known similar measure on the ‘Londoner city’. Tax havens are held and stimulated by the banks of all countries and served for colossal deviations cases such as the BPN one throughout Europe. In fact, Cyprus has been the latest victim of the colonization process in southern Europe led by the European Central Bank (ECB) and the IMF, at the service of Germany and the European and American finance as well as of their geopolitical disputes with the Russian oligarchy.

The Cypriot specter haunts Europe

The unanimous decision taken by the Eurogroup shows the virtually unlimited range of decisions that may be taken by the central powers and their peripheral lackeys, which includes the PSD / CDS government of Portugal and other countries under intervention, in order to save the common currency. Troika’s plan is revealed inits whole crudeness, that is, to transfer the wealth of the countries under intervention for the creditors and the international financial system. When there is no time for wage cuts and tax rises, the Troika goes straight to the deposits. After such ominous decision of the Euro group, it started to hover over the heads of the countries under intervention the compulsive withdraw of deposits. The European finance ministers say that Cyprus is a unique case, as was said before of Greece.

Europe gets indignant and the Troika retreats

Such a measure could only throw shockwaves largely uncontrollable. Across Europe it spread fear and the outrage, the ministers of several countries were called to account, leaders unsuspicious of antipathy towards austerity, as Cavaco Silva showed themselves to be dismayed and the banking system reliability has been shaken not only among workers but also among small and medium businessmen and investors. Russia, keen to preserve their funds and their position on Cyprus has thickened its voice. Gazprom – the multinational which controls the Russian natural gas – has proposed to pay for the Cypriot bailout and the country Orthodox Church made its assets available to be mortgaged in order to pay down the debt.

Backed by this movement and trying to keep up politically to the surface – the Cypriot parliament did ​​the unprecedented: rejected unanimously the Troika measure. Cyprus government refused to touch the funds below 100 thousand Euros. In less than 48 hours the Troika was forced to retreat and such a retreat, though being partial, is meaningful. Despite the lukewarm position of the Cypriot parliament – which yet accepts the intervention on the country and on its banks -, it looks like “an iron fist in a velvet glove”not only in Brussels and Berlin, but also in the governments of Lisbon, Dublin, Athens and Madrid. It has been proved that it is not the refusal of the Troika measures that plunges the country into chaos, but it’s very acceptance.

After more than ten days neither the banks opened nor the Cypriots left the streets. And the Troika and the Eurogroup, who ridiculously tried to refuse their responsibilities and tried to assign the faults on others, turned to be weaker for having retreated. Everything indicates that deposits below 100 thousand Euros will be, for the time being, untouched, and in compensation, deposits above 100 thousand Euros will be “taxed” by 30%. The Euro has been shaken up and has weakened, but it is far from falling. The single currency is increasingly the Deutschmark extended to the whole Euro zone and Merkel will struggle, and will pay if necessary, as it does currently the ECB, to keep the Euro.

Temporary lessons from the Cypriot tragedy

The myth of “the euro or the chaos” was wounded to death. Defenders and believers of the single currency virtues, from Left to the Right, used to back themselves in the financial chaos threat resulting from the departure of countries under the euro intervention, in order to defend the payment of the so-called sovereign debt and the resulting austerity measures. The departure of the euro, for many economists and politicians, was a synonym of a scenario similar to that experienced in Argentina in 2001: the running to closed banks, the financial system collapsed, capital outflows and losses of deposits. However, this is what Cyprus is living today, not because it wants to leave the euro, but because it wants to stay within it. The Cypriot parliament’s decision shows that the only way to impose the peoples’ will to the creditors and keep the sovereignty is to refuse the Troika measures. In fact, the position of the Cypriot parliament is just a too small sample of the courage necessary to face Germany and the creditors; but it was enough to let the “good students” who are sinking Portugal far away from a similar courage.

It was up to Cyprus, for being weaker and being more exposed, to show the future reserved for the peripheral countries within the euro. Emergency measures required to solve the Cyprus situation – despite all its specificities – are similar to those that may prevent Portugal, Greece, Spain or Italy, from becoming new economic protectorates. The Troika plans must be repudiated and the payment of the foreign debt must be stopped, so that there is liquidity to pay wages and create jobs. It is necessary to audit the debt and to judge and arrest the politicians who made it.

These measures to rescue the workers and the peoples necessarily lead to get out of the euro. To go back to the national currencies, to recover the sovereignty and to establish economic and commercial relations that must be also fair and supportive among the countries of the South is the only solution. Any and every negotiation with creditors can only be held based on this project. A negotiation which is not at the service of people will always bring austerity and subordination.

 

 

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