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Indybay FeatureRelated Categories: International | Global Justice and Anti-Capitalism
High Noon in Cyprus
High Noon in Cyprus
by Stephen Lendman
The Wall Street Journal said "Cyprus braces for a long weekend." It's not over 'till it's over. What's ahead bodes ill for Cypriots.
Predatory bankers assure it. So do Eurocrats. Corrupt politicians go along. Financial tyranny is policy. All Western societies are affected.
An unnamed Cypriot official said "We are waiting for a messiah to come and save us, and of course, there is none."
On March 17, Pimco's Mohamed El-Erian headlined "A Muddled and risky approach to Cyprus," saying:
Implementation challenges are huge. They'll "undermine (rescue efforts) and may lead to negative side-effects."
Eurocrats exceeded the Greek precedent. Doing so "extended burden-sharing further."
Cyprus "r(an) out of easy options." Irresponsible bankers bears full responsibility. Taxing depositors is "highly regressive. (It) undermines the traditional construct of deposit insurance schemes around the world."
Ideas proposed "risk becoming part of the problem than a solution for Cyprus."
"Private liquidity implosion and more acute credit rationing" may follow. So may "disruptive political backlash and social unrest."
Global investor faith will be tested. Political surprises aren't welcome. Troubled Cyprus heads from bad to worse.
Events are fast-moving. On Friday, the Financial Times headlined "Cyprus and EU locked in bailout talks." Another rescue plan was rejected.
A ruling Democrat Rally party official said a new one proposed an alternate depositor haircut. Cypriot finance minister, Michael Sarris, said taxing bank deposits is "clearly on the table."
He's back from Moscow. He arrived empty-handed. Russia rejects loans. Finance Minister Anton Siluanov said:
"Yesterday, we conducted the last round of talks with the Ministry of Finance of Cyprus. The talks have ended."
"Their suggestions were: to create a state-owned company with the transfer of assets of gas fields and offer Russian investors enter, buy bonds with a subsequent participation in shares."
"Our investors considered the issue, but they did not show interest."
Turkish authorities said they'll challenge unilateral Cypriot efforts to sell gas field rights. An official source said:
"This resource belongs to two communities, and the future of this resource can not be a subject of personal solutions made in southern Cyprus."
"We can act against such initiatives when necessary."
"The exclusive use of that resource by southern Cyprus is out of the question….It's unacceptable."
Resources are an estimated 1.7 trillion cubic meters. They're worth over 800 billion euros.
Late Friday, the Financial Times headlined "Cyprus runs out of bailout options," saying:
"Nicosia (has) little choice but to acquiesce to a (plan) agreed last weekend or face collapse of its financial sector - and possible exit from the euro."
Approved legislation restructures Cyprus' financial sector. Controls were established. Doing so limits banking transactions.
If implemented, Bank Laiki (the country's second largest) splits in two. A good bank will have deposits up to 100,000 euros. A bad one will hold larger uninsured amounts. Details remain sketchy.
Laiki CEO Takis Phidias said splitting the bank into good and bad parts "will be a disaster not just for the bank, but for the economy of Cyprus."
"We're talking about six billion euros belonging to Cyprus depositors being transferred to the bad bank with little possibility of them recovering their money."
"We're talking about a lot of businesses having their assets and accounts frozen."
"Who gives anyone the right to say that someone with 100 million euros will get 100,000 back and someone with 80,000 (gets) it all. I'm not sure parliament has the right to decide this."
He added that Laiki's problem hits other banks. It'll happen quickly. Normal operations will be affected.
Things remain unsettled. Legislators face a Monday deadline. Eurocrats said credit will be cut off if resolution isn't achieved. They have final say. Brussels controls things. Cyprus and other Eurozone countries are entrapped under one size fits all rules.
Early Saturday, Reuters headlined "Cyprus weighs big bank levy; bailout goes down to the wire," saying:
Lawmakers consider "seizing a quarter of the value of big deposits at its largest bank. (It's) rac(ing) to raise funds for a bailout from the European Union (to) avert financial collapse."
Finance Minister Sarris said "significant progress" was made. Discussion focuses on assessing a 25% levy on deposits over 100,000 euros. Doing so reflects grand theft.
An unnamed senior lawmaker said parliament won't decide until Eurocrat finance ministers conclude weekend discussions. They're up to no good. They want ordinary people bearing the greatest burden. Bailing out banks matters most.
On Friday, Cypriot lawmakers passed draconian legislation. It remains to be seen if it sticks. It's unclear how long it will last. It involves non-cash transaction restrictions, freezing check cashing, limiting withdrawals, and converting checking accounts into fixed-term deposits.
Eurocrats pressured Cyprus to act. European Commission spokeswoman Chantal Hughes said:
"What we are asking is that these laws to be (enacted) as quickly as possible, as a matter of urgency."
She added that capital movement restrictions are vital. They're needed, she said, because Cyprus faces a "very exceptional situation."
She lied. She prioritizes getting bankers paid first. She wants ordinary people bearing the greatest burden. Fair and equitable solutions are rejected. Holding countries hostage is official Brussels policy.
Capital controls at best buy time. Underlying problems remain unresolved. Failure to address them wages the wrong war. Bad outcomes are assured. Hard times get harder.
FT contributor Tony Barber headlined "Cyprus tremors could shake the world." More than its solvency is at at stake. Legislators shift from one bad plan to another.
Doing so risks spinning things out of control. The island state lies in a combustible region. Military, diplomatic, energy, and financial interests collide. Half a dozen or more countries are involved.
"Perhaps the thought that next year marks the 100th anniversary of the shooting of the Archduke Franz Ferdinand will concentrate minds."
Predatory finance reflects new world order warfare. It does so by other means. It's more destructive than standing armies. It wrecks millions of lives. It's done for private enrichment.
It accumulates wealth the old fashioned way. It steals it. It does so at the expense of ordinary people.
Cyprus heads for life support. Businesses aren't sure how to operate. Many demand cash payments. Hospitals are running out of medications. Other vital services risk breaking down.
Eurocrats control things. They have final say. Ordinary Cypriots face hard times. Financial tyranny threatens them. They'll end up on their own out of luck.
Force-fed austerity assures it. Prioritizing banker payments causes debt bondage, human misery, economic wreckage, and eventual collapse.
Economies thrive on productive economic growth. Sacrificing it for bankers causes systemic crises.
They fester out-of-control. Proposed solutions won't solve things. They assure greater trouble later on.
Ordinary people suffer most. Public needs go begging. Living standards decline. Societies become no longer fit to live in. Paying bankers matters most.
Stephen Lendman lives in Chicago. He can be reached at lendmanstephen [at] sbcglobal.net.
His new book is titled "Banker Occupation: Waging Financial War on Humanity."
Visit his blog site at sjlendman.blogspot.com.
Listen to cutting-edge discussions with distinguished guests on the Progressive Radio News Hour on the Progressive Radio Network.
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