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WORLD | BUSINESS

Soccer Star Olli Rehn and the Gloomy Future of Cyprus

Igor ALEXEEV | 22.03.2013 | 00:00
 

On the outside the situation in Cyprus’s economy is a result of premediated public policy of the European Union, but behind-the-scenes one can clearly see subversive activity of eurocrats stooging for financial interests of the international stakeholders. Let’s keep an eye on the big picture and put Cyprus’s financial uprising in perspective. As the Romans asked: Cui prodest?

First of all in no small measure this unprecedented «confiscation» has geopolitical dimension. Its history goes like this: since July 2012 the eurocrats wanted to punish the small republic for its independent choice of partners in times of crisis in the Middle East. For the first time ever, a Russian destroyer warship docked in Limassol Port en route to the Syrian port of Tartus. The regime of sanctions against Syria in Europe proposed by European authorities to please the US failed and Cyprus became a thorn in side. As one Chancellor Merkel’s confidant put it: «Cyprus isn't an economic problem, it's long since become a political one».

The black operation against foreign investors on Cyprus continued in November 2012. BND, the German foreign intelligence service, leaked to SPIEGEL magazine an anti-Cypriot report. The idea behind the leakage was to ruin island’s reputation of an international financial center. The offshore that is essentially no different from any Caribbean tax havens or «reputable» Switzerland was slandered as a criminal hideout. But Berlin’s attempt to trigger a massive capital outflow and bring the island to its knees was not successful. German bias in the matter of bailout payment was just too obvious for all serious European, Arab and Russian investors.

Besides, foreign deposits account for less than half the total $88 billion in the island’s banks, Bloomberg Businessweek reports. More than 60% of all the deposits belong to Cypriots and Greeks. That explains the current outbreak of mass protests and strong anti-EU sentiments among the Cypriot bank deposit account holders. As they say now, «it’s robbery in full daylight». It is interesting to note, that according to some insider information, Western investors siphoned off their funds from Cyprus in February. A strange coincidence, not so say more.

By the end of March, 2013 the eurocrats have decided to bring in the big guns and stripe the island of all economic sovereignty. The notorious «Troika» consisting of the European Commission, the European Central Bank and the International Monetary Fund announced the new ignominious terms of bailout. Marios Karoyian, the head of the Democratic Party in Mr. Anastasiades’s coalition government, called the bailout terms an «attack against Cyprus». This «civilized» arm-twisting created another zone of chaos on the distorted financial map of the eurozone. Cyprus is now on the verge of economic collapse, its political elite is desperately trying to deepen diplomatic ties with Russia and convert them into economic aid. As the old proverb says, a friend in need is a friend indeed.

The ECB’s failed attempt to initiate a surprise assault on the precautionary savings of Cypriots has opened Pandora's box. The rejection of bailout terms will have a long-term negative impact on Spain, Portugal, Italy and France. «The plan is a worrying precedent with potentially systemic consequences,» chief economist at Morgan Stanley Joachim Fels in London wrote.

Appraising the situation as a whole, one inevitably arrives to the conclusion that this strange political game was personally lobbied by Angela Merkel and European Commissioner for Economic and Monetary Affairs and the Euro Olli Rehn. Some experts also noted that the implicit beneficiaries of Cyprus crisis are US bankers. Some of the panicked investors’ money from Cyprus may find its way to the stagnating American financial institutions.

Moreover, Angela Merkel’s true worry now is the coming elections in Germany. Most probably she decided to boss around in a very inelegant way (some say like a bull in a china shop) and read a lesson to Cyprus for its «improper» choice of international partners. Her strategy is to present herself as a hardliner to the Germans, who are deeply disappointed by another bailout of a Southern neighbor at their expense. Frau Merkel’s tone makes many on Cyprus remember a Greek cartoon that caricatures the German chancellor as a new financial «Gauleiterin» of Europe.

As to Rehn, this technocrat’s ambitions simply do not match his political skills. Posing as a playmaker of the Euro-team he was quickly yellow-carded by the Cypriot parliament. Economics and finances are not soccer, Mr. Rehn. Sometimes it is better to use the head not only to shoot the ball into the net. And remember one more thing: your «wise» decisions may tragically affect the lives of simple people. Those very people who voted for you in 1988 in Kajaani. Many of them will be skeptical about your financial decisions if such economic misfortunes happen in the small country of Finland.

 
Tags: European Union Cyprus Germany
 

 
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Igor ALEXEEV


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