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Ten naïve questions from Cyprus, EU, Europe.

Μαρτίου 23, 2013

Dear Co-Europeans.

Cyprus is an island in the Mediterranean Sea. It’s been there for quite a long time, and apparently it has always been a popular destination for other people. We have a few million visitors enjoying our sun and sea every year (much less enjoy our mountains – shame on the others).

They also visit our important sites which date back as far as a couple of thousands of years before Christ was born. These sites are a living proof to what I wrote above: all sorts of people from the middle east, Asia, Africa and of course a big selection of Europeans came here to visit, occupy, plunder, and even civilize the savages.

But all this is past.

Our little island has been in international headline news for a week now, and this has made us all feel very proud. Friends from around the world are asking for news, are worried, and are interested to know what is going on.

If only it was for a good reason.

We have been in the news because we have made a mess of it all. We have been maintaining a fat state sector fed with seemingly never ending cash from the various kinds of businesses we have been doing for the last few decades. We have also had a very fat banking sector which kept developing beyond reason, away from our little sea borders.

I am a pro free market guy, so I do not see anything wrong in the continuous development of any industry, after all that is the aim of capitalism, isn’t it?

However, capitalists *do* make mistakes, bankers too, even politicians are sometimes wrong.

All of the above seemed to be in less than good form as relates to Cyprus and I believe that we all agree that   their actions were below standard, to put it mildly.

I have written an endless number of articles criticizing our politicians, the previous, and even the present government but I feel that although the European mechanisms and officials have received a lot of bad publicity from commentators from all over the world, it would be useful to hear the views of a Cypriot, pro-euro and pro-EU.

Even better, I will try to post a few questions. Questions that up until recently would seem to have a more or less obvious answer in the context of our Europe, our Euro, our dream. We do share a dream after all, don’t we?

  1. I fully understand the need for a manageable level of public debt. Why did you insist on the €17 billion bailout figure of which you are going to provide only €10b, leaving the rest for us to find?  Most of that amount was supposed to cover bad loans that *will* become so in the context of the next three years. Raising the figure so high at the beginning makes the prospect of paying back *any* amount rather less likely.
  2. Don’t you think that the most possible scenario now, is that even more loans than anticipated will become bad in the next couple of years?
  3. We all know that a bond haircut would be self-defeating, since a lot of public debt is held by local banks which had to be recapitalized again, and therefore they had to be “protected” – so that was not an option.  Do you think our banks are now in a better shape after this miserable adventure?
  4. Do you think that punishing the depositors is a fairer tool rather than punishing the lenders to the state?
  5. Of course it is true that the banking sector had to become smaller. But how? My leftist friends have been accusing the EU for handling other troublesome Euro countries with a sort of shock therapy. You have all heard the “shock doctrine” arguments. Wiping out our entire international banking over one weekend is a rather shocking policy, isn’t it?
  6. Even if we assume that it was all the banks fault, how do you justify the fact that a country, an EU member, a Eurozone member may go down because of its banks?    Wouldn’t it be more sensible to find a way to support the banks directly – for the benefit of the whole system, and provided that they did their restructuring etc. etc.?
  7. Ever occurred to you that the biggest single factor that contributed to the demise of our banks was a political decision taken by the EU leaders themselves? That cost about €4.5 billion to our banks, and one would excuse our clueless previous president for not knowing, but what about the others? When the Greek haircut was decided, I am sure that nobody was planning the fall of another country, isn’t it?
  8. A rather technical question: The European Central Bank has been providing funds to the long lost Laiki bank beyond any reasonable banker’s mind for an unjustifiable time. Why? The fact that the amount given by ELA (Emergency Liquidity Assistance) has exceeded €9 billion Euros is another major factor for the default of the whole of our system.
  9. Do you mind that the less than perfect handling of the situation leading to a possible meltdown,  has turned most of the Cypriots against the EU?
  10. I never had dreams of Cyprus becoming a Russian colony, letting them extend their Natural Gas monopoly Vis a Vis the EU – unlike many many other Cypriots. But why none of you ever thought of talking about this issue, in a way that would facilitate the whole exercise?

Any answers welcome!

Always in good faith,

A faithful European in the sunny but very windy today, Cyprus.

P.S. Black money from Russia, some are shouting? Some of this money is the same that a few Russian customers of BMW and Mercedes are using to buy their fancy cars. Do you screen these customers first? Only difference it seems,  is that the money ends up in Deutsche Bank.

Not a nice sight, is it?

Not a nice sight, is it?

2 Σχόλια leave one →
  1. Λόκο permalink
    Μαρτίου 23, 2013 18:52

    Στο σκίτσο πιο πάνω η Κύπρος πρέπει να είναι η «πορδη», ο πόρτος του καημένου του ζώου.

    Μου αρέσει!

  2. Μαρτίου 24, 2013 04:49

    Το κακό είναι ότι αυτές οι ρητορικές ερωτήσεις έχουν απαντηθεί αλλά προφανώς δεν άκουσε κανείς την απάντηση.

    Μου αρέσει!


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