Cyprus: It’s not about the numbers

Cyprus Financial CrisisThe Eurogroup agreed on Monday night to allow Cyprus to change the make up of its controversial deposit tax. Instead of imposing a levy of 6.75 percent on savings under 100,000 and 9.9 percent on those above 100,000 – as agreed in Brussels in the early hours of Saturday – Nicosia can play around with the numbers, just as long as it raises the arranged amount of 5.8 billion euros.

Cyprus’s new but already beleaguered President Nicos Anastasiades is proposing that bank customers with deposits under 20,000 euros should not be taxed at all, while keeping the levy the same for the remaining depositors. Cypriot MPs have already shown a reluctance to approve the tax, mindful of the impact on depositors but also the long-term damage it could do to the island’s banking system and economy.

However, what’s happened over the past few days and what’s likely to happen in the days and weeks to come has little to do with numbers. It is much more about perceptions. Even if a financial meltdown is averted in Cyprus this week, the decision to tax depositors there in order to reduce the eurozone and International Monetary Fund contribution to the island’s bailout has sown the seeds for a future eruption.

The Eurogroup’s decision on Monday was a clear attempt to correct a mistake, while steadfastly refusing to admit one had been made. There are different interpretations about what happened in Brussels late Friday and early Saturday but ultimately they matter little compared to the end result, which was that Anastasiades flew home to implement the first depositor haircut in the euro’s history with the blessing of fellow eurozone finance ministers and the IMF’s Christine Lagarde.

There is nothing the Eurogroup had to say to the Cypriot government on Monday night that it could not have said in Brussels a few days earlier. The only difference was that by Monday the reaction in Cyprus and other parts of the eurozone to the idea of a deposit tax, including on guaranteed savings, had underlined what a perilous idea it was to start off with. From Sunday, eurozone governments and finance ministers who had been at the Eurogroup meeting, started to distance themselves from the idea of taxing small-time depositors with such frequency that it seemed hardly any of them participated in the Brussels talks and the few that did were strong-armed by Anastasiades into accepting a tax for deposits under 100,000 euros.

The back-pedalling and hand-wringing has been an embarrassing spectacle but it has also laid bare the unedifying eurozone decision-making process and the lack of stature amongst its decision makers. The only two plausible interpretations for the Eurogroup approving such a self-destructive decision as taxing all bank deposits is a complete disregard for the consequences (doubtful) or an utter underestimation for the effect it would have (more plausible).

The latter suggests that one part of the eurozone is now completely out of step with the other, unable to understand its challenges, its concerns and, ultimately, its reality. Only a core group of decision makers with no sense of the fragile state of societies in the periphery, which have been battered by deepening economic crisis and uncertainty for months on end, would favour a policy that creates a precedent for governments to grab people’s savings without second thought.

Even if capital flight from Cyprus as a result of this decision is less severe than many fear, even if Cypriot banks survive this real stress test, even if the island’s economy is not set back many years, even if savers in Greece, Spain, Portugal and Italy don’t panic, the idea of a deposit tax and the way it was adopted has released something poisonous in the air. It is difficult to see how these citizens will be able to trust the system – be it their governments, banks or eurozone partners – in the weeks to come. Belief in countries where the economy is contracting and unemployment growing is already vitreous and planting fears about a possible deposits grab in the future could shatter it completely.

Some will argue that the numbers involved in Cyprus are not that big, that small depositors will not lose a lot. This misses the point. Again, it’s not about the numbers, it’s about perceptions. Cypriot savers will not be so concerned about losing a few hundred euros here or there. After all, they know what’s going on in Greece and are aware that if they don’t pay a deposit levy, they’ll pay through higher taxes, lower wages and reduced spending. No, their worry will be about what’s going to come next. They have witnessed supposed partners back their country and its new president into a corner with almost underworld-style ruthlessness. The European Central Bank, essentially their central bank, threatened to cut off funding to Cypriot lenders, to cause their collapse, which would bring economic disaster. In these unprecedented circumstances, what basis is there for a relationship of trust between Cypriots and the eurozone? What’s to prevent them thinking that if they’ve been squeezed over this, they won’t be cornered over the island’s natural gas reserves or the terms for reunification with the Turkish-occupied north?

Others will argue that it is unfair to expect Germany or other eurozone taxpayers to keep footing the bill for bailing out member states. This also speaks of different perceptions of reality in the euro area. It ignores the fact that taxpayers in countries that have been bailed out are also paying a price. In fact, if one looks at the eurozone today and chooses any of its main economic indictors, it is abundantly clear who is footing the much higher cost for these rescue packages.

This emergence of parallel lives is the illness spreading to the heart of the single currency. How can the eurozone’s two parts understand each other when their realities are growing further apart? How can one side decide for the other when it’s not experiencing the depression, polarization and incertitude of its counterpart? In this two-tier construct, how can those on the upper deck assimilate the warnings from those below that the vessel is sinking, when their feet aren’t even wet?

That’s why Cyprus is about so much more than just numbers.

Nick Malkoutzis


150 responses to “Cyprus: It’s not about the numbers

  1. Excellent blogpost Nick. Completely agree; the numbers are relatively immaterial. It’s all about perception, confidence and precedents. The sheer ineptitude of certain policy-makers is staggering.

  2. Bravo Nick. Outstandingly perceptive article – best ever.

  3. everygoodboydeservesfavour

    Again, another good piece Nick. It’s really difficult to fathom that these so-called leaders have not thought through the ramifications of their actions. Where is the erudition, where is the compassion? In their headlong rush to fix real (and perceived) wrongs (acquired over many decades in many instances), across Europe in such a short period and draconian manner is fraught with high political risk. The simmering populace will only accept so much. To continue,artificially, to prop up the southern Euro States cannot/will not continue indefinitely. National sovereignties need to be regained with life defining decisions and measures again made by their own fellow countrymen. In my view these diktats from Brussels/Berlin will end up fragmenting the very Union that was created to bring Europe together.

  4. I am reminded of one of my favorite Greek proverbs (which, I believe, I have posted before in this blog): “Any fool can throw a stone into the sea but once he has done that, not even a hundred wise men can get it out again”.

    Fools at the Eurogroup level threw a most valuable stone into an ocean last week, namely people’s confidence in the safety of savings. The fools have meanwhile converted to wise men and they want to repair the mess. They could double of even triple their financial commitment to Cyprus — they will not get the memory of this precedent out of people’s heads. Not only people in the South but also, and perhaps particularly, people in the North.

    In the fall of 2008, after Lehman and after HypoRealEstate, Chancellor Merkel and her then Finance Minister Steinbrück had to stand before TV cameras to verbally guarantee ALL deposits in German banks. This out of fear that there could be a run. That time, the trick worked (still, I, for one, had protected all my savings within 24 hours of that announcement at quite a bit of cost). If there is a next time and if, the next time, the trick no longer works, it will be because of what happened last week. I guess we are no longer talking about ‘post-Lehmen’. We are now talking about ‘post-Cyprus’.

  5. Yes, there is going on a lot about perceptions.
    About the perception of safety of money, but also about the perception of blackmailing.

    It looks like the cyprus parliament is about to canvel the compromiss and wishes to renegotiate to get more help from Europe. They have to take care not to exxagerate.
    In Germany I see a public perception of “If Cyprus can blackmail us, than everybody can blackmail us. Can this game to be allowed to continued endlessly?”

    For bigger countries there was a little logic in the argument “The balout is necessary for the stability of the whole economic system.” But for such a small country like cyprus this is simply not believed by many people. So the willingness to carry again one more bailout – especially after cyprus seems to deny the compromis – is not very big.

    The German Government has really to take care. If they buckle to the cyprus blackmail, that will boost the new eurosceptic party (“Alternative für Deutschland”) and so Merkel probably may be overthrown in elections in September. But Merkel don’t likes to lose elections.
    I think e.g. the German Government cannot buckle, at least not much. And perhaps comparable mechanisms work in other “paying countries” as well.

    In the worst case scenario Cyprus pushes its luck too far and may end with empty hands. And has to carry the bancrupt banks totally by their own.

    Apropos: “agreed on Monday night to allow ” – wasn’t it allowed before as well? It was cyprus who wanted to include taxes on small money, because it wanted to reduce taxes on big money of wealthy Russians. That part is all about cyprus politics, not about european politics.

    By the way: If cyprus had its own currency, they could endlessly print money to save the banks – but the devaluation of the currency would be muuuuuch more than 10%. So 5-10% “bank saving tax” may be a small price to pay.

    (And yes, that is a very unbalanced German view of the things, just as a counterbalance to the good arguments Nick offered.)

    • IN my opinion, the situation is morphing into an international political crisis. If the Russians come to the rescue of Cyprus (which is very likely) then all Hell will break loose. There is even the possibility of Cyprus quitting the euro and seceding from the EU — remote as that possibility is.

      And we have to ask the question: what is the EU offering Cyprus? Austerity Greek-style? The Germans are simply manipulating their power in the eurozone to suit themselves: this game runs the risk of causing the collapse of the European Union. It would not be the first (or even the second or third) time that Germany has made fundamental and arrogant errors of judgement that have impacted on the entire continent.

      • everygoodboydeservesfavour

        Totally concur…the road gets rockier, with Cyprus vote just in with nil votes for the case, a real snot on the nose for Mrs Merkel. Hold on tight!

      • It’s fabulous – I’m jumping!

        Cyprus DIKO leader: The decision we will take today, isn’t painless, its historic.
        Our country is under unjust and premeditated attack.
        Eurogroup’s decision is a blackmail, we want our reply today to be a European one, not just Cypriot.
        It is clear now, the problem isn’t economic, it’s political, it’s geopolitical.
        We propose the rejection of Eurogroup’s decisions.

        We don’t know yet what Plan B (or C or D…) is but it was perhaps not so clever to meat-cleaver Cyprus when it has other options.

      • There was a deal, where Europe offered around 10 Billion € for the banks, if Cyprus taxes 5,8 Billion from the bank accounts.
        Cyprus seems to break the deal.
        For me that sounds like: No deal, no 10 billion € bailout. Quite easy.

        But lets switch the question: What is Cyprus offering Europe?
        – A Billion €-need for bank-bailout – wow, sounds great.
        – A neverending conflict with Turkey with the potential of a regional war – wow, that sounds even better!
        – Nice landscape and beaches – OK, for tourism we don’t need Euro and Union, as we see quite well in Turkey.
        So what ist Cyprus offering Europe?

        Greenland wanted to leaves the European Union and did it in 1979.
        That didn’t shutter the Union. If Cyprus may think about preferring Russia and Putin – they are free to take that road.
        Perhaps its better for all parties.

      • Guest (xenos)

        Roger: Greenland was not a member of the EC. It was an external territory of Denmark, and demanded the right to self-determination under international law.

        Moreover, Greenland had not just discovered massive oil and gas reserves that Russia wanted to invest in! Your comment is just ridiculous. This is about the geopolitics of the EU and how Germany has fucked up.

      • If they bet about gas: Please, take it. No problem.
        If its about geopolitics: As long as the cyprus-turkish deal is not settled, Cyprus is much more a burden than a win.

        Cyprus got strength and support in Europe, regarding the conflict with Turkey. How solid will be the russian support, if they have to choose between strong and rich Turkey and Cyprus? Is the (perhalps, anytime) petrol and the tax heaven/money laundry really worth it for Russia?

        You may bet…

  6. My wish for Cyprus: They do it as Iceland did it:
    – No european balout
    – The broken banks are let gone bancrupt.
    – The government saves just and only the money of cyprus people (up to an amount of around 100.000€).
    – All foreign customers are lost and realize, that not only industry and countries, but also banks can go bancrupt.
    – There is no need to bailout laundred russian money or english and german money looking for cheap tax havens. There is no free lunch – also not for tax evaders.

    Iceland was also awfully broken. But by not accepting to bail out foreign accounts they found the best way out of the dilemma. Today Iceland looks good again. And even foreign inventment capital comes back – but hopefully more careful and reasoned than before.

    • Roger: Iceland was not in the eurozone. All euro members have transferred a part of their sovereignty to the political entity of the eurozone and cannot do as they like. Nor can they quit the eurozone without quitting the EU. The problem is with Germany, which wants to have its cake and eat it. The more competitive level of the euro (vis-a-vis the old DM) is there for a reason: the presence of Spain, Italy, Greece &c. These countries were included in the euro on the specific instruction of French and German politicians, who over-rode the expert advice of the Committee on the Euro which reported to the EC in 1998. Germany has no right — morally, legally or politically — to complain about the weaker economies of the eurozone. Yet Germany and many Germans do so: why is that? Answer: they want to have their cake and eat it.

      One piece of advice to Germans: we live in the real world, which is not composed solely of Germany. Think about it.

      • The deal (Maastricht Treatment) made with implementation of the euro was totally clear: No balout of other countries. Niente, nada.

        That deal has been broken several times, especially toward Greece.
        In the hope to help.
        That (illeitime) medicine costs a hell for the other european countries – it seem not to help Greece out of the crisis. So maybe its a bad medicine?

        Reaction: Ever increasing the failing medicine, until even northern countries cant pay and get broken? Or stopping it (no more bailout) and searching for another medicine (Modell Iceland)?
        Maybe Cyprus is the perfect modell to experiment the new medicine, if they already dont like the taste of the known one?

        By the way: I do not complain about weakness. I complain about breaking Maastricht treaty, about breaking this deal and about people trying to blackmail.

      • Guest (xenos)

        Roger: you are living in a cloud of delusion. France and Germany were the first countries to breach the Maastricht rules, and decided that they would ignore the law. The hypocrisy (and stupidity) in all of this is how northern European countries created the entire mess and have the cheek now to complain about it. Try to get your historical and legal facts right, before commenting, please.

      • > France and Germany were the first countries to breach the Maastricht rules
        That is true and it was really bad.
        So its really about the time stopping it.
        And about implementing sanctions that meet and hurt Germany and France as well, that it will not be repeated,
        But its not about: “OK, Once its broken, now lets endlessly continue breaking.”
        It is simply wrong that the mess would have been created by the north. It has been created by all sides. Fact.

        But nevertheless, its not about “blame game” but about ending the mess.
        About “no more bailouts”.
        About “new medicine”.
        Iceland looks quite fine today. Greece is not.

  7. Roger, who is blackmailing whom in your opinion?

    Is “bailout” today just a euphemism for deliberate and vindictive destruction of southern economies?

    After the 2nd world war the USA and all western European countries treated a broken Germany with enormous respect, sympathy and unprecedented aid and investment. This was wisdom. This was very much at the cost of the other European nations, including small impoverished states like Greece whose entire infrastructure had been deliberately destroyed by departing german troups, their gold removed to Berlin (and never returned), and whose economy such as it was, was broken by the enforced “loan” made to Germany during the occupation (also never returned). So in fact Greece made a double contribution.

    I apologise for bringing up the past, and yes, germans worked industriously – WITH all this aid – to rebuild their economy to where it is today. But I do so to make the point that when Germany is now, for the first time in a position of economic power (rather like the USA then) to show the world a similar generosity of spirit, wisdom and statesmanship it has dramatically failed. Indeed we have only been lectured as to the moral superiority of germans – as proved by “The German Miracle”. What if our post-war statesmen had let Germany go hang?

    Now Germany for the first time has been able – from its position of power as strong economy – help others. Not alone, but within the eurozone. What do we see? Respect? Sympathy? Truly constructive aid? No: rascist name-calling and insult, one-sided blame and denial of responsibility in the creation of bubbles, the imposition & continued insistence on a failed austerity policy, lack of investment today, etc. At the same time the first tranche hinged on Greece buying unneeded german (and french) arms; Siemens escaped paying its corruption fine by being awarded the extension of the Athens metro in an illegal public competition of one participant only; Hochtief is not pressed to pay the half billion € it owes the greek government in outstanding taxes…
    The total picture is not pretty. Nor statesman-like.

    Cyprus IS indeed a special case. A partitioned country under constant and real threat from Turkey – this is the most important fact, against which all EU policy decisions have to be measured. A devastated country which segued the limited developmental opportunities that came their way into becoming a successful offshore banking and business destination – certainly not illegal, certainly to be applauded and in fact replicated elsewhere in the eurozone – plus a tourism and retirement destination. And then 2 things happened: Cyprus discovered it was sitting on enormous gas deposits, and its banks went belly up from the greek PSI exposures.

    The terms offered to Cyprus in this context are remarkably mean-spirited and short-sighted. Should Cyprus agree to destroy itself?

    • everygoodboydeservesfavour

      Eleni, and excellent and erudite piece, cogently expressed! If the subject (European Unity) wasn’t so serious, these blogs would pass for good entertainment!

    • Germany has never been able to lead Europe. For most of the post-war period, Germany confined itself to economic progress and hard work. Now that, once again, they have sufficient power to influence European politics, the Germans are proving absolutely defintively that they have no ability in conducting negotations, in making political compromises, and in making weaker countries feel that they are respected.

      The fault lies in the German psyche, I am sorry to say. It is a Protestant culture (which I know well) and cannot provide leadership for Europe. When placed in a difficult position, Germans just become stubborn and stupid.

      Our new commentator here shows all of these Germanic defects. He tries to provide historical and legal justifications of various things, and all of them are wrong! Yet he does not admit error, does not rethink. Instead, he accuses Cyprus of blackmail! This same charge was levelled at Greece, when there was some talk of defaulting on the Greek national debt. Unfortunately for Greece, it had elected a moron and coward as prime minister, and he refused to fight against the Germans. Although the Cypriot government is not a lot better, it seems that the deputies are, which is why they have responded to the popular demand. Cyprus has far more democracy than Greece.

      As far as negotations are concerned, let me explain to our German friend. ALL international negotations throughout history consist of compromises, blackmail, threats, promises… this is how the world works. Germany has a peculiar Protestant view of the world, which is not shared by 90% or more. I know well this Protestant view, because it is my own background. You are just wrong, and unsuited to hold power (except over Germans). As, indeed, am I.

      • I totally agree with Roger.
        Time and again it’s the same sad story: A Southern European country making a mess of it. They should be blaming themselves for their irresponsible politics, their corruption and their incompetence. But no, it’s all Germany’s fault. And Greece and Cyprus are the poor, poor, pitiful victims.

        People in Greece and Cyprus should also realise that most northern europeans are getting very tired of putting billions of euro’s in bottomless pits.

        Here’s a nice peace from Citi Research, a division of Citigroup Global Markets Inc on the Cyprus-deal. (It was written before the Cyprus parliament rejected the deal. )

      • @Harmen
        Nobody on this post has criticised Germany for anything but bad manners, present lack of statesmanship, and inability to lead anyone but itself (as should be apparent to you from its near universal unpopularity these days). France is in a far more exposed and dangerous position re Greece but had the nous to express sympathy and support (receiving it in return)…. leaving DE to create its very own, entirely avoidable, popularity problem.

        Greece and Cyprus are not the same by the way. And the circumstances that brought these two countries to ask for a bail out are radically different.

      • Guest (xenos)

        @harmen: did you actually bother to read what we all wrote above? There is substantial evidence there explaining why northern Europe is responsible (at least in part) for the chaos of the eurozone, why it is necessary for the survival of the euro that those countries with budget surpluses assist those with deficits, and why German policy is nothing to do with economics and rather more to do with cultural history and religion.

        Every eurozone country in fiscal crisis has different reasons for its crisis; but there is one commonality, which is membership of the euro. The UK has a similar fiscal mess to that of southern Europe, but its independent currency has protected it from the German mess in managing the euro. To simply make the claim that “northern Europeans are getting tired of putting euros into bottomless pits” suggests that you understand nothing at all of the eurozone crisis. The primary culpability for the eurozone membership of Spain, Italy, Portugal, Greece, Cyprus, Ireland et al lies with northern Europe — namely, Germany, France, Netherlands, Belgium, Luxembourg… They manipulated to ensure that all the southern economies were included in the euro. In the world I know, people are responsible for their actions. Do you think that your countries are not? (I am not Greek, but British, by the way).

      • Xenos wrote: ”The primary culpability for the eurozone membership of Spain, Italy, Portugal, Greece, Cyprus, Ireland et al lies with northern Europe — namely, Germany, France, Netherlands, Belgium, Luxembourg… They manipulated to ensure that all the southern economies were included in the euro.”

        What I know about Greece is that they manipulated their figures to ensure they would be part of the eurozone.

        And to Eleni: You write about the near universal unpopularity of Germany these days. Maybe that seems to be the case in southern Europe. But you’d be surprised to see how popular Germany is these days in The Netherlands, where I come from. Which is really a surprise, because due tot the 2WW there always was al lot of hatred towards the Germans here. Time played a roll in softening the feelings of course, but its also the German stance in the Eurocrisis that makes them rather popular.
        And for France: they have never had any other interest than the French interest.

      • @Harman
        Every country has its own interest at heart and so it should.

        Of course Germany is popular in the Netherlands!! Most likely Finland too though Austria seems capable of diplomacy in hiding its core interest. Probably due to its long & great history.

        I am not surprised you are from the Netherlands.

      • “The UK has a similar fiscal mess to that of southern Europe, but its independent currency has protected it from the German mess in managing the euro.”
        By the way, who saw stronger devaluations, Great Britian or Cyprus?
        An interesting comparison from the british Newspaper Telegraph:

        “[…] But don’t suppose that being outside the euro has spared British savers the same injustice. In many respects, the damage has been worse, undermining the nation’s wealth much more comprehensively than the comparatively minor haircut Europe is attempting to impose on Cyprus. It’s just that the British haircut is being done in a different and more subtle way. […]

        Yet the main difference is that in Britain the damage to savings has been external, through currency devaluation, rather than as proposed for tiny little Cyprus, internal. This has had a devastating impact on the relative worth of British savings.

        Your British pounds are today worth nearly 25pc less in Cyprus than they were five years ago, even though Cyprus has arguably had a worse banking crisis. Elevated British inflation – in part, a direct consequence of devaluation – has done the rest. Even after the haircut, the Cypriot nest egg will look in much better shape than the British counterpart, all other things being equal.[…]”

      • > The primary culpability for the eurozone membership of Spain, Italy, Portugal, Greece, Cyprus, Ireland et al lies with northern Europe — namely, Germany, France, Netherlands, Belgium, Luxembourg… They manipulated to ensure that all the southern economies were included in the euro.
        So you prefer dividing the Eurozone? In a hard-currency “Northern Euro” including the bad boys of Germany, France, Netherlands, Belgium, Luxembourg… and a soft-currency “Southern Euro” including the poor victims Spain, Italy, Portugal, Greece, Cyprus…?
        As fas as I know, this Idea – splitting the euro in northern and southern part – gets more and more fans all about northern Europe.

        Maybe you will get what you wish.

      • And by the way, Xenos. The euro was mainly a French project, not a German. The French threatened tot block the German unification, if the German didn’t agree on creation the euro.

      • Guest (xenos)

        Obviously, you do not know enough. Every single member of the eurozone (including France and Germany) manipulated their data in order to satisfy the convergence criteria. France and germany were the first (after the creation of the euro) to breach the legal conditions of eurozone membership. So, you are repeating to me the lies and propaganda of northern European politicians and press: this is not the historical reality.

        The UK is in a worse position than it needs to be in, primarily because its current politicians are right wing idiots who have the same set of beliefs as your German government. They seem to think that austerity measures can bring an economy into good health, when all the accumulated knowledge of economic theory and history shows that austerity measures can only damage economies.

        I do not read the Daily Telegraph for my economic information, and I do not recommend any newspaper for proper economic analysis. The least bad are the Economist and the Financial Times, but even they make terrible mistakes of analysis and sometimes of fact.

        AS far as splitting the eurozone is concerned, obviously you have no understanding of what I wrote above. The eurozone is constructed in the way it is, by the northern European countries. They deliberately chose to reject the expert report in 1998 (which remains unpublished) in order to include all of the southern European countries in the euro. This political decision had several motivations, all of which remain in the minds of your current politicians:
        (1) to create a powerful world currency that would compete with the dollar and strengthen the EU as a global economic player
        (2) to create a currency that would be backed by the German economy, but valued at much less than the DM. This would enable competitive German exports outside the eurozone
        (3) To include weaker southern economies in the eurozone so that Germany, Holland, France etc could export more aggressively and create trade surpluses with the weaker euro economies.

        There never was, and there is not now, any interest in northern European in allowing southern European countries to have their own weaker currency. The result would be a massive collapse of german and other exports and therefore of the german economy. It is in the direct interests of Germany to continue with things as they have been for the last few years, to raise money on the capital markets to lend to Greece and other southern countries, and to provide limited support for the euro and the ECB. The moment that the cost of doing this exceeds the benefits, Germany will destroy (or quit) the eurozone.

    • > I apologise for bringing up the past,
      Dont care, everybody brings it up since years and tens of years. Especially if they ask for money. I got used to it, and I feel nerved with it.
      But I know that the comparison is not working anymore, so its fine.

      > The terms offered to Cyprus in this context are remarkably mean-spirited and short-sighted.
      The terms (taxes for money of less than 100.000€) were invented by cyprus government for less taxing big foreign money. Europe did not demand that.

      > Should Cyprus agree to destroy itself?
      Cyprus should simply show if its economic modell works. If it works – fine.
      If not – change it.
      The Iceland modell also clinged on financial overleveraging, a finance system ways to big for the small country.
      It did not work sustainible and they changed it. Iceland is today in a better shape than Greece.

      But I agree with ou: Best solution is, that Cyprus dont ask for money and Europe dont pay it. Its good that cyprus said no. I hope they have an alternative plan.

  8. In fact what I am saying is that Cyprus, like Germany, created its own “Cypriot Miracle”, with very little aid from other european countries, and under constant threat – even more so today. A destroyed Cyprus would only make that threat worse.

    Playing bully, offering a poisoned chalice, in the face of mortal realities is criminally stupid.

    • > In fact what I am saying is that Cyprus, like Germany, created its own “Cypriot Miracle”
      If it is like that, why did they ask for money?

      • Guest (xenos)

        Are you aware that at the beginning of the crisis, the German banks were probably the weakest and most likely to collapse in Europe? Now, with years of manipulation of the eurozone, the German banks are doing fine with the money that poured in from Spain, Italy, Greece etc. Germany has played the system to make the German economy stronger, and protect its banks.

        Cyprus, on the other hand. used its large banking sector to try to help Greece. This is why the Cypriot banks are in a mess: the Greek bonds that they bought.

        You see, your own nationalistic framework is wrong. This is about the eurozone and why things have gone wrong, and why countries in a position to help each other should do so. With the German mentality of “why should we help anyone?” the eurozone is dead. Your money came partly from the support of the other members of the eurozone — not merely from German hard work. This economic fact is still not admitted by Germans, and is quite clearly correct. You need to get a grip on reality.

    • Except that after 1945, Germany received massive funding from the Marshall Plan. This was because of the belief, after the disaster of WW I, that penalising Germany by making it pay for its crimes would only lead to collapse of the economy and more extremism amongst Germans.

      So, post-war Germany did not progress without major assistance from all of the west. Cyprus is a different case, and we have to recognise the real achievements of the Cypriots in doing so well, with so many problems and so little help from outsiders. There is no comparison with Germany: Cypriots have done far better.

      • Thank you Xenos, you are right – the Cypriots did it entirely on their own, in fact they are rather scary! And now, “no”. Quelle courageio!

      • We cannot always reply to the actual blog, this is in reference to ‘Cyprus used it’s banking system to try to help Greece’. This isn’t true, Cyprus has always been an economy dealng with washing money. Her off-shore accounts were set up within hours to handle commisions paid to Greek public sectors. After Cyprus entered the Euro these funds were limited and Russian accounts flourished. Cyprus should never have joined the Euro.

      • Guest (xenos)

        @Ann: my info is that about 4bn of the problem is with greek government bonds. The rest of the problem is very unclear, so I do not know exactly why another 12 bn is needed. However, do not forget that British and US banks collapsed. It is not fair to accuse Cyprus of laundering money without evidence; moreover, Pissarides gave an interview since the parliamentary vote in which he says that there is no evidence of illegal deposits in Cypriot banks and all the EU and international rules have been followed to the letter. You cannot disregard testimony from such a respected person, without real evidence.

      • Guest (xenos)

        Postscript: reading Klaus Kastner’s blog, one commenter there says it is about 10bn for recapitalisation of the Cypriot banks. This is a standard sort of figure across the EU (considering the overlarge Cypriot banking sector) and implies that Cyprus has been singled out by the Germans for unfair treatment. This has been my belief all along, so no surprise here. This is geopolitics, with the Germans trying to keep Russians out of the Cypriot economy and the future gas exploitation. Ideally, I suppose that Germany would like Cyprus to collapse so that German investors can then enter the marketplace and “save” Cyprus, while “assisting” in energy exploitation. Classic dirty politics for money.

      • In your blog yesterday you said that there was no evidence of money laundering in the Cypriot banking system. Not sure where you have been Guest but prior to Cyprus joining the Euro every business in Greece received invitations to set up off shore companies. At the same time Putin has asked for list of Russians with accounts in Cyprus, obviously he is more in the know.

      • another_greekboy

        Is there money laundering in Cyprus? Of course, there is. But then for the Europeans to be all morally outraged over this is a little bit a case of the kettle calling the pot black. It’s not as though other banking systems in Europe don’t launder money. Italian banks, British banks, German banks, all kinds of banks in all kinds of places (Luxembourg, the Caiman islands, Liechtenstein, the Channel Islands, etc) launder money. Hell, Swiss banks launder money for everyone!

        However nobody really wants to go digging in those places to see what would come up. It’s much easier to point the finger at Cypriot banks as the culprits because they have Russian deposits, some of which is undoubtedly from Russian organised crime (but then how much Mafia money is in Italian banks?). And since Cyprus is financially on the ropes, it’s easy to kick it when it’s down and scapegoat it for the whole mess.

        All this is a nice red herring though. Let’s not forget the Cypriot banking system passed a stress test lest than 18 month ago and also got a clean bill of health from the European anti-fraud agency. So if all the sudden Cyprus banks have systemic problems now, either the auditors were incompetent then or they were told to close their eyes.

        Instead of blindly concentrating on “money laundering” as the source of all of Cyprus’ problems, the EU should be investigating perfectly legal practices in Cyprus as well as elsewhere. Procedures such as “related-party lending” and other improper lending practices are so much more dangerous to the system as a whole inasmuch as they promote insider sweetheart deals and reciprocal “you scratch-my-back-I’ll-scratch yours” agreements. While these do not break the “letter” of the law, they certainly flaunt the “spirit” of the law and eat away at the heart of the system like a cancer.

        Banking crisis of 2008? How about the Savings and Loan crisis of the 1980s and 1990s? Enron, anyone?

    • > And Cyprus said NO!
      If cyprus dont needs european money, everything is fine.

      • Guest (xenos)

        I doubt it. This could be the beginning of the end of the eurozone.

      • No, not the end of the Eurozone, sorry.

        Maybe it is the beginning of the end of Cyprus in the eurozone.
        And of Cyprus in the european union, maybe getting e russian province instead.
        But cyprus (and greece) are to small and economically to weak to seriosly damage the eurozone.

        Perhaps it strenghens the eurozone instead, if the weakest countries leave. They are not thrown out, but if they really wanna go…

  9. Roger you are hilarious!

    Come on everybody, its time to celebrate! At least for tonight! Bottoms up….and blessings on all of us 🙂

    (I re-posted this cos it ended up in the wrong place!)

    • Dear Eleni Gigantes and Guest (xenos),
      May you answer what it is a mystery for me? Greek “friends” had been writing like you for years in this blog about Germany. In the meantime Portuguese spoke little, Irish too, and they are recovering much better than Greek speaking countries.
      What is the pleasure about digging a hole on your own country, only to show how “proud” you are? For me it looks like madness.

      • …and the Englishman asked Zorbas what it takes to be free. And Zorbas replied: “A touch of madness!”

      • Guest (xenos)

        I have no idea what you are talking about. I am neither Greek nor a digger of holes: I write scientific reports on political economy, and advise governments and international agencies on policy issues. I also have some collaboration with German and Austrian government sectors, but do not feel obliged to support their positions in my personal statements.

      • Because Estevao too many Greeks cannot take responsibility. However, many Greeks actually living here in Athens will agree this is our fault. The media of course prefers to print and to air on TV what is popular to sell advertising. If we say Transparancy International gave us 96 th place last year due to the serious corruption here, it will simply be dismissed. Too many vested interests, we take one step forward and two back. My Husband is a Greek ,Greek , and his explanation is that this attitude is part of our culture. For generations Greeks lived in family communes, even brothers and their families, grandchildren etc. The head of the family was Grandfather, and what he said went and all decisions were ,made by him. He held the control completely as he owned the land and all assets, they were not passed to his sons only when he died, and only to daughters as dowries. At the same time he took all the responsibilities for the family and this is why even if you are in your 40’s or 50’s you will be referred to by elderly Greek family members as pedi mou (my child). He pointed this out to me the other night when a reporter was interviewing Athenians on the street. That same evening two Grandfathers when interviewed as to how they were managing financially during the crisis both said it’s problematic as I cannot give to my children and grandchildren. No other European would make this comment, in fact can’t think of any nationality as in most cultures children take care of elderly parents. My Husband’s Grandfather actually did pass the land to his sons, he was 96 and they were all in their 60’s. I actually know one Greek Grandfather that has two sons that he empoloys that are both married with families and he pays their bills and gives them pocket money, and I’m sure this is still continuing in many Greek villages.

      • Guest (xenos)

        Yes, ok Ann. But you know that I am very critical of this Greek culture of corruption and nepotism. Estavao asked the question of me and Eleni — one of us 100% British and the other British-Greek.

        My position is that Greece was first in the firing line because of its unsuitability to be in the eurozone (which I have explained was engineered by France and Germany) and its appalling economic management over the 2000s. Howwever, Greece did not cause the eurozone crisis (which was caused primarily by the USA/UK banking deregulation and the poor structure of the eurozone by Germany and France). More than half the eurozone is in crisis, which is clear evidence that it has nothing to do with Greece.

        Your position is just irrational. Greece has a problematic economy: so what? This is not the issue here.

      • Estevao Veiga

        Thank you Ann Baker,
        You write beautifully, and I think you are right 🙂

  10. @Guest (xenos)
    You write scientific reports on political economy based on “German conspiracies”?
    “Conspiracies” being part of Greek, not German, culture, how scientific this could be?

    • My dear lady, where did I use the word “conspiracy”? This is in your imagination, not in mine.

      In my comments here, I have provided information that is as accurate as possible. Most of it is in the public domain; one piece of info about the arrangements of the eurozone in 1998 comes directly from the chair of the expert commission for the euro.

      I do not invent conspiracy theories. I report facts. If you do not like those facts, because they look like evidence of conspiracy, then you need to question how much you know of reality.

  11. @Guest (xenos)
    It is you who wrote that:

    “This is geopolitics, with the Germans trying to keep Russians out of the Cypriot economy and the future gas exploitation. Ideally, I suppose that Germany would like Cyprus to collapse so that German investors can then enter the marketplace and “save” Cyprus”

    This is the mind frame of Conspiracy lovers. If you were really interested of what the Germans want, you will be reading their newspapers. You will get much more reliable information.

    • Admittedly, that is interpretation rather than fact. Nor is it something I would put in a report to Germany, since they would already know what they intend!

      If you think that German newspapers inform anyone of German politicians intentions, you have a strange idea of how politics works. You have to find out from people deep within the system (I am not).

      My interpretation is based on the idea that Germans are not SO stupid that they would destabilise the banking system of Europe, threaten the collapse of the Cypriot government, and cause various crises across the world for a mere 5billion euros. But maybe you are right: perhaps Germans are just very stupid people.

      • estevao veiga

        @Guest (xenos)

        I think I got my answer for my first question. When you have this kind of mindframe:

        If you think that German newspapers inform anyone of German politicians intentions, you have a strange idea of how politics works.

        People “who mean what they say and say what they mean” are impossible to be understood. That looks to be the explanation for the reason why Greeks and Cyprus insist in shooting themselves in their foot.

      • Guest (xenos)


        You are just very naive then. Anyone who believes that what German newspapers publish is the stated intention of the German government has a very poor grip on reality. Generally, what gets into newspapers are ideological points of view which are trying to manipulate both the public and the politicians. If you cannot grasp that, then you should not be arguing with people about politics.

      • Estevao Veiga

        @Guest (xenos)

        Well, not so naive as to expect that somebody who first write:

        My dear lady, where did I use the word “conspiracy”? This is in your imagination, not in mine.

        And shortly after:

        You are just very naive then. Anyone who believes that what German newspapers publish is the stated intention of the German government has a very poor grip on reality

        Will not expect that everybody else behave the same way

      • @Estavao Viega
        Like Xenos, the meaning of your “question” escapes me.

        But after studying your words carefully, I see you have made a startling discovery : through foregoing comment, the Portuguese and Spanish economies are recovering! (We are thrilled to hear this wonderful news!) And by implication – following the same policy – the Greek economy will surge!

        I thank you for divulging this secret. If only…!

        And I have a question for you too.
        Taking a leaf out of the too-absent Dean’s book:…would you….by any chance… be a Turkish troll?

      • “Turkish troll”
        Rassistic insults – is that your proposed level of discussion?
        Or …would you….by any chance… be a Golden Dawn fan boy? 🙂 )

      • Estevão Veiga

        Dear Eleni,
        As you may know, the level of devastation of the Greek economy is unparaleled with any of the others that you mentionned. And as you may have noticed, I am part of the ones that think that the biggest responsability for that incumb to the Greek culture and attitude. And since I tend, like nearly everybody, to project on others my expectations, when I see people behaving in a way that is against their own interest, I have difficulty in understanding. That is the reason of my question.

      • Guest (xenos)


        Sorry, but we are not interested in your opinions about our opinions. Since you give a Portuguese name, presumably you are not Greek; clearly you are not an economist. So why do you think that your opinions should be placed all over this blog? Who are you to criticise others with more knowledge of the situation than you have? I answered your questions honestly, and received disrespectful replies from you.

        Whether you are Turkish or Brazilian, you are most certainly a troll.

      • Estevao Veiga

        @Guest (xenos)
        I do have a bachelor in Economy and two Greek children, aged 22 and 20.

      • Guest (xenos)

        @estevao: if you actually think that the devastation of the Greek economy is more to do with Greek people than it is to do with the horrendous and malicious austerity programme imposed by the Troika over the last 4 years, then obviously you did not learn much about economics in your studies. Economists left, right and centre across the world have denounced the policies that Greek politicians accepted, which were guaranteed from the outset to destroy Greece. There was never any chance that anything different from the actual outcomes would occur.

      • Estevao Veiga

        @Guest (xenos)
        You understood well, I actually think that the devastation of the Greek economy is more to do with Greek people than it is to do with the austerity program imposed by the Troika over the last 4 years. The same program was followed in other countries, Ireland, Portugal and, without the Troika, Italy and Spain. None of them had the devastation seen in the Greek economy, so the problem was not the plan, it was the implementation and social consensus needed for it. And since the second part (implementation, social consensus) was the responsibility of Greece, not of the Troika, the responsibility falls on the ones who are suffering the consequences.

      • Guest (xenos)

        Allow me to contrast your competent understanding of economics with what I learned in Economics 101 over 40 years ago (taught by Prof. Galbraith).

        When you have an economy with an overblown domestic services sector the blossoming of which depends entirely on funds flow from abroad, that economy will collapse as soon as the foreign funds flow stops. If you keep it alive by putting in more funds from abroad, the balloon will only get larger and explode even more ferociously at some later point.

        The foreign funds flow to Greece never stopped; it was only reduced and yet there were devastating effects. Ross Perot once referred to this phenomenon (with a view towards the US) by saying ‘our children will be selling each other hamburgers and pay for it with money borrowed abroad’. No more money from abroad, no more selling of hamburgers

        Arguably, this total mis-structure of the Greek economy might not have happened without the Euro. After all, Greece had a lot more industry before the Euro than it has now. But if Greece, without the Euro, had received the same tsunami of foreign funding as with the Euro, the same thing would have happened. The experience in Hungary shows that even a local-currency country was loaded with cheap funding from abroad.

        True, the austerity measures as implemented were disastrous and only exaggerated what would otherwise still have been a huge delince in aggregate demand (half of austerity came from cutting investments).

        It doesn’t really depend on debt per se; instead, it always depends on what debt is used for. Up until the crisis, Greece literally wasted debt. It hasn’t put debt to much better used since the crisis.

        The problem was not so much austerity measures. The problem was that there were no parallel growth measures in the real economy (private sector) to compensate for the loss of aggregate demand through the public sector.

        I think we exchanged once before (and I believe we agreed) that the Greek economy simply MUST increase its share of and contribution to the value-creation-chain. That may be new domestic production, that may be new domestic assembly of Chinese products for further distribution to other markets; that may be making agricultural products shelf-ready instead having Italy do the shelf-readying, that may be many, many other things. But it cannot be the keeping alive of an overblown service sector (unless that service sector could begin exporting).

      • Guest (xenos)


        We have discussed the structural characteristics of the Greek economy before, and we are broadly agreed on the ideas that have just posted. However, that is VERY different from what some other people here are claiming.

        First of all, this is about Cyprus. The Cypriot economy is not the Greek economy. I do not know it particularly well, but as I understand things it relies on tourism and offshore banking — like many other successful small island economies. Moreover, as one commentator here points out, its banks were given a clean bill of health recently, and there has been no discussion about the money-laundering issue in all of the offshore banking zones. There has been no formal investigation, and no conclusion. For Ann to make her gossippy claims that “everyone knows it is laundering money” is just ridiculous. We know that Switzerland and Luxembourg, and the UK, and the Cayman Islands, etc etc also do (or at least we think we do).

        Secondly, there is a big difference between identifying the structural characteristics of the Greek economy (in a post about Cyprus, mind you!) and claiming that the problem is with Greek people. This is one level below racist, unless there is some analysis to back it up.

        Thirdly, I was attacked here for asserting that the situation in Cyprus is about geopolitics and rather little to do with banking per se. I was accused of making conspiracy theories and of being unprofessional, by this troll with the Portuguese name. The whole crux of the troll’s claim is that s/he knows what is wrong with Greece, and in a post about Cyprus (!!?) any suggestion that the Germans are doing anything other than helping southern Europe is unacceptable. Not only is this naive politics, it is insulting to the intelligence of anyone educated in economic and political history. That is not now countries behave now and it most certainly is not how Germany behaved over the last three centuries!

      • Guest (xenos)

        Yes, I got side-tracked with Greece here; sorry.

        On Cyprus, I have no knowledge about its economy and/or financial sector but I am amazed how little knowledge most everyone else seems to have. Here the Eurogroup had over 6 months to analyze the deposit structure of Cypriot banks and a short blogpost by Paul Krugman shows how little they knew about it.

        I don’t recall hearing from anyone else what Krugman said in this blogpost, namely that Cyprus is the largest single foreign direct investor in Russia. Well, that makes one hell of a difference to everything! Who are those Cypriot investors? If they are Russians who invest money in Russia from Cyprus which they brought to Cyprus in the first place, none of that Russian money would be in Cyprus.

        Perhaps not all those huge deposits are really freely available deposits. What if they serve as collateral which Cypriot anonymous companies (owned by, say, Russians) gave to Cypriot banks for making loans to Russian companies owned by these very same Russsians (‘self-loans’). Of course, the banks would then resist a deposit cut because they would be cutting right into their own collateral.

        The Eurogroup seems to feel that to understand a bank, one only needs to understand its assets. Well, sometimes it is equally important to understand the banks’ liability structure. If most of the liabilities are deposits and if those deposits are pledged for something else, then the bank really can’t touch them so easily.

        And so forth…

      • Guest (xenos)

        @Klaus: very interesting indeed. I did not know anything of Cypriot investment in Russia, and this information strengthens my view that this issue is all about geopolitics. It is not about deposits (legal or otherwise) in bank accounts in Cyprus: it is far far bigger and more complex.

        There is one highly respected Nobel laureate (Pissarides of LSE) who is very informed on the Cypriot economy and is in a senior advisory position for the Cypriot government. His opinions on the situation are salutary, but they are not widely posted. As I understand, he believes that there is no significant problem with laundered money in the Cypriot banks; and that the Troika has made terrible errors of judgement and has been bullying Cyprus for its own ends. I do not know what his explanation of the actual cause of the Cypriot banking crisis is, as I have not read anything about it.

        On a different matter: I have been unable three times to post comments on your blog. I think the problem is that I have set up such strong protection on my browser (after some very bad experiences with Trojans and suchlike) and there are just some sites that I cannot post onto. I have tried removing the variable protection levels, but still my posts disappeared into the ether. (I say this just to explain why there is nothing from me, on your excellent blog.)

      • Guest (xenos)

        Prof. Krugman does it again! In a short NYT commentary (see link below) he presents a few facts about the Cypriot economy/banking whose understanding is ESSENTIAL when it comes to decision-making and evaluating the consequences of such decisions. I understand that Krugman knew nothing about Cyprus until recently. He did some reseach in the last few days and some ‘calling around’. What has the Eurogroup been doing over the last 6 months and more?

        Compared with Cyprus, the Greek economy and financial sector appear easy to understand (even though I often have trouble understanding it). I maintain that it is of utmost importance to understand an economy’s cash flows. I guess only 4 things would serve as a starting point: the aggregated assets/liabilities of the financial sector, the external debt position, the foreign investment position, and the Balance of Payments. The Bank of Greece provides excellent information about that. Doesn’t the Bank of Cyprus do the same thing?

        The million-Euro-question is why Cyprus goes so much overboard to protect ‘professional market participants’ (PMP) and bank shareholdes. They now even want to rob the pension fund for that. To save Cyprus’s role as a financial center? Well, that role is gone since last weekend.

        There are 2 kinds of customer groups affected by bank trouble: the PMP and the regular savers. The PMP are expected to know what they are doing; the regular savers are not (at least not up to the deposit insurance limit). Cyprus goes overboard to protect the PMP and there is nothing which meets the eye which can explain that.

        Incidentally, PMP is not my term; instead, it is Basel-2 language. Iceland demonstrated so beautifully that, when in trouble, the state has to protect the savers and, if necessary, let the PMP bleed (that’s what I had argued for Greece from the beginning). And in Iceland the PMP bled good!

        There must be a cogent reason why Cyprus is not following the Iceland-model. Except, no one is telling us!

  12. everygoodboydeservesfavour

    Seems to me that whilst the GFC was the catalyst that exposed a lot of various National Government malfeasance, it would have occurred anyway at some future time, and probably at a far greater scale. If nothing else, this Eurozone crisis has underscored the real necessity for most European governments to reign in overspending and waste. In the case of Greece add the eradication of profligate policies and corruption together with massive structural reform. Being tied to the single currency, none of this will happen any time soon. Cue further misery.

    • The deregulation of everything (including banking) was the neoliberal solution to a declining capacity of Europe and North America to compete in manufacturing in the global economy. Their idea was to create credit based in the west which would finance massive increases in consumption, and conceal the inability of all western countries to compete with Asia. The Americans started it with Reagan and his trillion dollar deficit, who refused even to consider balancing his budgets. At the same time, these governments cut the pay of the working class and increased the income of the super-rich.

      Now that the Ponzi scheme has fallen apart, they intend to make the poor and middle class pay for their corruption and incompetence. The rich have got only richer in the last four years: Mercedes sales are booming, London and NY auction houses report record prices and profits, and everyone with assets of over $100 million is quite happy.

      • another_greekboy

        As long as the pie was growing in the post WWII years, the ruling elites were willing to let the working and middle classes have a (small) slice, now that the pie is no longer growing and they are not willing to accept a corresponding freeze or decrease of their own incomes (in fact they want even more), the only solution left to them is to grab an ever-increasing share of the pie. That translates into tax cuts for themselves and savage cut to wages and social services to the poor and the working class leading to an ever growing income inequality.

        I can confirm that the luxury good market is doing better than well in the US as well as in Europe even as most people are being thrown out of their houses and don’t have enough to eat.

  13. Calling people trolls simply because they don’t agree with you simply shows how arrogant you are. Insulting people in a blog demeans yourself and any intelligent comments that you may make are lost. Nick opened this site so that people could post their coimments and with very little editing. I hardly think that as an intelligent journalist, it was his intention to have comments from one point of view,but to encourage general discussions. Three of you on this blog, including Dean here who has popped back for a visit, are insulting. I have had this in the past, it’s not amusing, it’s rather stupid and uncouth and if you three are as highly educated as you have advertised on this site, it’s a pity you didn’t learn some manners at the same time.

    • @Ann
      I think I am capable of deciding whether someone is simply disagreeing with me in substance or is a troll. Perhaps you are not able to understand. I did not call you a troll, even though I strongly disagree with about 40-50% of what you post.

      • Guest (xenos)

        Postscript @Ann: I see that the troll is playing games here, and flattering you to get your support. This is not the same as agreeing with you in substance: it is a psychological game, carried out God knows why. But I have seen it many times in real life and on the web. You need to be more sensitive to what is going on, instead of insulting me and others here. This is nothing to do with politeness.

  14. Dear Ann,
    Thank you for your kindness and I agree a 100% with your complains. Unfortunately, my experience in this blog tells me that people will not change their behavior even when others bring to their atention their lack of manners, Dean being the worst of the worst.
    As for the complain about not talking about Cyprus, I will address it. It is not true, it is exactly because the same patern of self destruction has appeared that I made my first question.
    Let recall what happened with the anoucement of the tax on the bank deposit. The tax itself is one of the manners to cover the hole created in the Cyprus finance and banking system. As soon as it was announced, you could not come back, anybody who has money deposited in Cyprus would be scared and will try to withdraw the money in order to escape it. For that reason, a bank holiday was imposed and Parliament was called to approve the measure.
    If you are a rational member of parliament you will had concluded that confidence in bank deposit had been hit, and you had two choices, approve it, with the consequence that bank depositors will be among the ones paying for the inadimplency of their own banks, which is quite fair, and it will be too late for them to try to escape and so less risk of a bank stampede, or refuse the measure with the following consequence:

    1) Loss of the revenue of the tax and of the agreement with the European Community
    2) Bank run since depositors will try to withdraw the money before the tax is eventually reinstated
    3) Since the inadimplency is still there, and there is no agreement anymore with the EU, discovering yourself broke and living the same experience of chaos that Greece had.

    The only thing that you will not have is a free lunch, and you should know it, because Greece has tried it and the North Europeans did not play by the music.
    Conclusion, if you value yourself, you will try the way with the less pain. As we well know, this is not what happened, Cyprus Parliament voted for self destruction.

    • Another_Greekboy

      I tried to make sense of this muddle and I have only one question:

      What’s an “inadimplency”?

      • Guest (xenos)

        I think its an inadequacy (of typing skills).

      • Another_Greekboy

        I am completely furfagmentaled (maybe s/he can log that in his/her dictionary)

      • Guest (xenos)

        Ahhh… it’s a Portuguese-origin Anglicisation, supposed to mean something like “breach of contract” or default. The Portuguese word is legalistic, which is why I did not recognise it.

        Google saves! All praise to Google, the Almighty One!

      • Another_Greekboy

        Oh great. But I have to say the ramblings made more sense when I didn’t know the meaning of an “inadimplency.”

  15. Here is a Kathimerini reposting of the Bloomberg interview with Pissarides:

  16. @Klaus. I cannot read the NYT either!

    I think the answer to your questions, what has the Eurogroup been doing, and why the savers were not protected… are the following.

    This from the very outset was seen as a trivial issue in banking (the sums involved are fairly small by EU standards) but a major political issue. In particular, Germany asserted a moral position about alleged money-laundering in Cyprus. This issue appeared in the German press, very aggressively, and led the politicians to worry only about their own political positions — especially in the German election year. So, like the whole management of the eurozone from Day 1, this was never about economics of finance, but about crude politics.

    Secondly, why were savers not protected? We know the answer clearly here. The Eurogroup did originally intend to protect savers: their intention was to force Cyprus to steal 30-40% of large investors’ money — which would affect only Russians and other non-Europeans. They considered that such large investors (especially with their “criminal” money) were a different class of investor, more like PMP. This plan went wrong when the Cypriot government refused to cave in, and altered the arrangement such that the large investor’s losses were limited to 9.9%. This could only be done (given the conditions set by the Europeans) by stealing the remainder from Cypriot investors.

    Clearly, the whole purpose of this exercise was not to recapitalise Cypriot banks but actually to close them down as offshore banking. Presumably, this is linked to the geopolitical importance of Cyprus, and a determination that Russia will not be able to use Cyprus as some of special access to EU decision-making. It is all about political power, from beginning to end.

    • Xenos,
      Not that it really matters anymore, but I think the jury is still out on whose idea the minus 100,000 levy was. Yesterday the dutch FinMin de Djiesselboom (sp?) claimed it was his. Since it is of no real consequence now – except to Cypriot voyers (forensically) – this may just be political expedience.

      • Guest (xenos)

        I read only that he accepted responsibility for it, but not that it was his idea. I think he means that he should never have been so stupid as to allow the Cypriots’ idea to be the conclusion of the meeting.

    • Much more peculiar, even alarming, is: WHERE is Mario Draghi? He has been out of sight for 2 weeks, yet the ECB / Draghi should be in the forefront of managing this crisis.

      • Guest (xenos)

        I guess that because this is only about politics and nothing to do with banking in the eurozone, Draghi refuses to touch it. He is quite right too. It stinks to high heaven.

    • Guest (xenos)

      The NYT work-around works like this: take the article’s headline, copy it into Google and when it shows up there, you can open it.

      All your points are well-taken but my question remains: why does Cyprus on its own go overboard to protect the PMP?

      • Guest (xenos)

        Thanks for the workaround!

        My guess (in asnwer to your question) is that only Cyprus has a politico-economic interest in protecting the PMP (maybe Luxemburg too, but it doesn’t have political power). If the investment in their banks is primarily big money, that would make them structurally different from German banks (I presume). It’s not only about banking, it’s also about the ease of setting up businesses and doing business in Cyprus (which Ann dismisses as money-laundering, following the standard German line).

        However, I really don’t know enough about either Cyprus or banking to feel competent to do more than throw some ideas!

  17. @Guest (xenos),
    You are right, I made a literal “translation” inadimplency doesn’t exist in English. The right word is default.
    I read also your article, apparently he knows that his argumentation is weak, because calling “confiscation” a 6,75% tax, is pushing the envelope a lot. And anyhow, he is missing the main point, the fact is Cyprus will have to find the money, so you can argue how much you want, since there is no free lunch, Cyprus population will be taxed one way or another, and it will always hurt.
    And as for your “global consensus” well, apparently the ones who will be coming with the money are not part of it 🙂 And since the other ones will definitely only show “mouth solidarity” and no money, I will be worrying more about the opinion of the “out of the world global consensus” than the ones “who feels your pain”.
    But obviously, this opinion comes from an “idiot Turkish-Portuguese troll” who was taught from birth that you don’t bite the hand who feeds you 🙂

    • The “free lunch” repetition that you engage in indicates that you have swallowed the right wing propaganda of the neoclassical school. There are free lunches, they abound in history and even now; the only issue is who pays for them, and is that a problem. Similarly, public goods can be considered a free lunch, where as a community we agree on how to pay for them in a structural way. This is why rabid neoliberals oppose public goods: they believe that everything must be private and based on individual rights and obligations. This is also (more or less) the Protestant view of life, by the way.

      The free-rider benefiting from someone else’s work/investment is actually a free lunch, and is a fundamental component of our civilisation. I take it as axiomatic, for example, that my published (or unpublished) work will be used by people who have not paid for it. They may even be able to make some money out of any insights in the work, to be used in their own work. Even with copyright protection, the information contained in published work is usually available to others. The only exception are patents, which are very specific, heavily litigated and very complex in legal terms.

      I have explained above that the reason the money is not forthcoming is because the northern Europeans decided to treat Cyprus differently, in order to destory its offshore banking. This is for geopolitical reasons and has nothing to do with economics, per se. As things progress, you will see that I am right. Cyprus was destroyed as a banking economy whatever the government decided, because the powerful countries of the EU decided to destroy it. It will take a brilliant strategy, money and a lot of luck to undo the damage that the Germans have deliberately and malevolently inflicted on Cyprus. It is analogous to warfare.

      • Estevao Veiga

        @Guest (xenos)
        Perhaps the more brilliant strategy, money and a lot of luck to undo the damage that the Cypriots have deliberately and malevolently inflicted on themselves could be to start to take your benefactors seriously, negotiate in good faith and stop playing the “poor” victim?
        You will be surprised by the amount of good will that will appear at this moment, just ask the “idiotic Portuguese” about their own experience.

      • @ Estavao Viega
        What a good idea EV. We shall indeed ask the portuguese about the outstanding generosity of their benefactors. You wilfully ignore that the portuguese have their own blogs explaining it to the world.

        I also notice that you have no interest in following your own theory ie making your economy magicallly surge by zipping your mouth. Let me see…is that the Florida economy?

        You persist in accusing an Englishman for what you perceive as Greek faults, and you clearly have a paid job to smear greeks, based on zero experience. Why aren’t you spreading it in other country’s blogs where it might {might!!] have more impact?

        It is clear to everyone that you are a paid troll , whose only job it is to break up discussions and spread gibberesh & absurd disinfo, supported by the other trolls in this comment thread. Ann Baker, you went over the top in your description of greek family structures. However, substitute ‘Turk’ for greek, or ‘Italian mafia’ and it works. On top of that I cannot find anyone in the Athens English community that knows you…or your factory. Nice try.

        Xenos, I appreciste your persistence. The non-trolls in this thread appreciate what you write.

      • Guest (xenos)

        Estevao: try reading some history of the world, of Europe and particularly of the Germans. You might start to understand how foolish your comments are; no country in history (especially powerful ones) ever does favours for another. This is pure power manipulation by the Germans, relying on gullible people to believe the tripe that ruling classes everywhere dish out to common people.

  18. Well, if I compare the experience of the last few years of the Countries in crisis who adopted your mind frame, and the one’s who didn’t (Iceland, Ireland, Portugal), it looks like the latter was a much more fortunate one.
    But I can understand that when you are raised hearing the comands “be smart” “don’t trust anybody”, you will have extreme difficulty to make the necessary leap of faith that is required to deal productively with the Germans.

    • I was raised in a devout Protestant family, have a German stepmother, and possess far more in common with Germans than I do with most British and Greeks. In my professional life, I deal mostly with Austrians and Germans and technically am a resident of Vienna.

      So your comments, written from the perspective of a Portuguese/Brazilian married to a Greek are just ridiculous. You know nothing about German culture and how to deal with Germans. I do.

    • Another alias, you are pathetic. Every blog you go on you spoil because you are rude and ignorant. Who cares what you think, Dean you are wrong time and time again.

      • Estevão Veiga

        I can’ agree more, congratulation for your courage Ann Baker!

      • Guest (xenos)

        And your comment here, and also previously to me, is not rude and ignorant, Ann? Take the beam out of your own eye, and then you will see clearly to take the speck out of another’s.

  19. @Eleni Gigantes
    When did Nick declared that his blog only accept people who disparage the Germans? And why it is fair to attribute them the worst kind of intention, but when mention is made that you must help yourself too, this is considered “an insult” to the Greeks? What kind of mentality is this?
    And telling somebody who has two Greek children that “this is none of your business” is funny 🙂 So the future of my children is “none of my business”? Well, this is a very “unGreek” way of looking at it 🙂

    • another_greekboy

      Reading over your comments as well as Ann Baker’s, one has to conclude that essentialism continues to have a bright future. Given that you seem to believe in the underlying, deep nature of categories of humans characterized by a set of unchanging cultural traits or stereotypes, shouldn’t you be at the beach, kicking a soccer ball while sipping a caipirinha while looking at women shaking their buttocks to samba during the Carnival?

      • Guest (xenos)

        I am convinced that Estevao is female (despite the name of a male footballer). Just my instinct…

      • @ Xenos
        And my intuition is that Ann Baker is male, in his 40s and trolling for Turkey. Turkish news sites have been openly advertising for English speakers these last few years.

      • Guest (xenos)

        Interesting, Eleni… If you are right (and I must confess that after 15 years living here I have never heard of her except in the letters pages), then Kathimerini should worry about her extensive activities there.

        Every serious discussion site that I visit, I am aware of large numbers of organised trolls. Some of them (e.g. anti-Muslim activists) are Jewish academics in the USA. I doubt that these get paid, but they have Israeli intelligence websites to provide ready-made propaganda to disseminate across the world. Others are clearly neoliberal propagandists in the UK, probably linked with the right wing eonomic “think-tanks” or propaganda machinery.

  20. I apologise to the readers of this blog and to Dean Plassaras. The first link I posted at 3:31pm was meant to be:

    As some of you know Dean hosts a page on the Greek EEZ. As a follower I receive each post in my email inbox. Unfortunately this morning I absent-mindedly copy-pasted the URL, thinking it was the link. My apologies to all concerned, especially Dean.

  21. OK, the show comes to its end, the situation is quite close to the beginning.
    – All accounts with less than 100.000€ are not taxed (Could have been made earlier if it would not have been demanded by cyprus government)
    – Bad banks account with more than 100.000 € are taxed higher
    – The Credibility of cyprus politics has been openly crushed
    – Russia had to show their real level of solidarity – not any single Euro or Ruble
    – Cyprus had to show the credit worth of their gas fields in the actual levelof nonexploration – not any single Euro or Ruble.
    – Cyprus politics showed how strong they are willing to save the pensions founds – not at all, better saving the money of rich foreigners bank accounts that of poor cyprian pensioneers. (Dirty question: Rich foreigners are bribing better?)
    – At the end the boasted cyprus proud (“Better the death”) has switched to beggaring for european money again.

    That all could have been smoother, easier, but with less dramatical theater – and less collateral damage.
    Was it really necessary? It would had been better if Cyprus had not to lose its face that much. But anyhow, they cried for loosing it.

    At least I realized why dramatic theater has been invented in that region.

    • This is typical Germanic thinking. Only Germans would insist that others should do as they are told, that they should respect the powerful countries of Europe, and how dare they try to respond to the will of their people!

      Personally, I would have preferred that Cyprus defaulted and this resulted in the collapse of the eurozone. I think I can speak for most of Europe when I say that we are all sick and tired of German arrogance and posturing, and we would be better off without you in the EU. Centuries of war-mongering have not been forgotten, although the current version is a mutation of past conduct, it is true. Addtionally, the use of trolls all over the internet to promote German propaganda is new, although Goebbels invented the principle.

      • Estevão Veiga

        Apparently the will of the Cypriots is that it is better to take the money of the North Europeans, with all the strings attached, than follow the path suggested by the ones who will not extend a cent to them.
        And I personally only lament that it took them one week too long to come to their senses.

      • Guest (xenos)

        I am so happy that you think you know the will of the Cypriots.

        Perhaps instead you can tell us about the will of the Portuguese — since you speak the language and know either the country or its former colony. This would be far more interesting to us than your ignorant opinions about Cyprus.

  22. It seems that Cyprus had two choices either to ratify the agreement that they had already reached with the EU/IMF before the elections, or to be bullied by Russia. Why are readers continually blaming Germany when we all know that the IMF will not support any loans unless they are repayable. Cyprus even attempted to paint the EU as responsible for the idea of deductions from low deposits under 100,000, which of course are guaranteed. Why not blame Russia considering it was her temper tantrums that stopped them initially deducting tax from only the high depoisits. These deposits carried 5% bank interest, and some with special arrangements over 6%. This means that even with a tax now the majority will not lose from their deposit simply the interest. While you are all of the opinion that this has damaged Germany even more, most Europeans will welcome the decision as they are tired of paying taxes to bail out countries which even after warnings took no responsible meqasures. Don’t think that all Greeks support these childish antics, we were working our way towards stability when this charade took place. The ones that have shown their true colours are the Cypriots that frankly didn’t use their common sense, their politicians that preferred to take taxes from their Greek Cypriot citizens rather than Russian oligarchs and the Russians that have proved once again that they can never be relied upon.

    • No, you are quite wrong. Cyprus demanded the choice of the people and of not being bullied either by Russia or by Germany. If you cannot understand that, and you cannot accept the principle of democratic accountability, then I am beginning to wonder if you really are British. Your post is anti-Cypriot, which would make sense if you actually are a Turkish troll as has been suggested. Moreover, no educated British person would be stupid enough to be openly anti-Cypriot, even if they did feel that Cyprus behaved badly. My country has a history with Cyprus, and we treat Cypriot people with courtesy.

      • > My country has a history with Cyprus, and we treat Cypriot people with courtesy.
        With the same courtesy as Great Britain treats all its former colonies? You are shure to be of british origin? 😉

      • Guest (xenos)

        Since you are a German troll, I wouldn’t expect you to understand anything.

      • It wasn’t anti Cypriot it was anti Cypriot politicians, and quite rightly so. Cyprus didn’t demand the choice of the people, they never presented the people with the true facts ie: what it would mean to leave the Euro etc., An Educated Brit will determine who is right and wrong. At the same time they will respect other people’s views whereas your comments show that you are unable to accept any opposing ideas. Instead of replying with facts you prefer to throw foolish personal comments at bloggers. We have read in the past your personal attributes which pall, especially when we read of your support for the Cypriot Governments botch up and your continuous ravings everytime there is a glitch in the EU programs of the death of the Euro and the disbanding of the EU. A few weeks probelms on the stock exchange a fall in the Euro against the dollar, but even to consider that a small state like Cyprus could destroy one of the world’s major currencies and Europe as a whole, is not an intelligent assumption.

      • Guest (xenos)

        @Ann (if indeed that is your name), your offensive remarks to me are unacceptable. You appear all over the internet making nasty remarks about everyone and everything, and you end up as one of the most obnoxious things on the internet. You also have the cheek to accuse me and others of not being polite to you! This is really quite something.

        If you wish to have a civilised discussion about Greece’s problems, or indeed Cyprus’s, then we can have an exchange of opinions. However, I do not find it acceptable that you present everyone with an hysterical anti-everything and anti-everyone monologue, and demand that nobody reply. Your opinions are not so valuable that the world cannot live without them; nothing you have written (that was correct) is news to me, after having conducted research on the Greek economy since 1988. Much of what you have written is pure hyperbole, and quite unhelpful.

        If you are not a professional Turkish troll, then may I politely suggest that you could benefit from some medical advice? Your anger and hatred (if they are genuine) indicate some serious health problems, which probably can be treated with medication. I wish you well.

      • Estevão Veiga

        Cyprus is not being bullied. Cyprus is broke. Germany and others had agreed to help them if, and only if, they help themselves. Germany, and the others have absolutely no obligation to do it, and nobody else has appeared with a better offer than the one offered by the European Community plus IMF.
        So essentially Guest (xenos), Eleni Gigantes and Co are complaining of the ones who are helping, with is a very unhealthy life attitude. They are behaving like the drug addict who complain because his family will only help if he enters in rehabilitation. Well, if they think Cyprus may get a better offer, they better show who will make it, but in the meantime the Cypriot deputies, who are the elected representatives of the Cypriots, are concluding that the better option they have is to take the offer of the EU plus IMF.

      • Estevão Veiga

        And I forgot to mention that one of the principal causes for being broken is because they invested the money of their depositors in Greek government bonds 🙂

      • Guest (xenos)

        Estevao, you don’t know anything at all about Cyprus. Why would you post here unless you are a professional troll?

        Tell us about Portugal, the great success story. You can read all the Portuguese blogs and explain how well the Troika is handling the economy there.


  23. @ Xenos
    Fascinating isn’t it, the trolls are coming out of the woodwork at lightening speed! “Roger” obviously isn’t aware that the world’s most popular club for the last 10 years has been the Commonwealth.
    Keep up the good work Xenos!

    • It may just be that they all start their trolling at the same time on a Saturday morning. Obviously, every single one of them is really pleased that Cyprus is not coming well out of the situation — which indicates to me that there is some serious problem with each person.

      I am not sure that Ann Baker is actually a troll; she could just be a loopy old woman who posts all over the internet about Greece. I did a quick Google and found one post in a UK newspaper online — which was really quite outrageous. She accused another commenter of lying, with his quite accurate post about pensions and the problems in Greece with reduced pensions. It was very nasty and aggressive, and all of her “facts” were just gossipy things about the age at which people take pensions, and how lazy all Greeks are, etc. My reaction is that you do not put this on a UK newspaper site, if you live in Greece and care about the country.

      • Ann Baker/annieathens is also featured on FYROM websites bad-mouthing Greece.

        So far nobody knows her in the English community here and I’ve put the question out through their community groups. The question is still open of course.

        Further, she claims to run a factory involved with computers and to be 71. My IT contacts here say that in Greece the maximum age in IT is late 50s, (this makes sense when Bill Gates is 57) and that 71 year olds involved in IT are normally only English and American computer wonks. They don’t know a factory run by a 71 year old English woman.

        Further, that EU technology transfer and SME funds did wonders for this sector from the 90s onward so she should have little reason to complain outside of normal bureaucratic complaints.

        Since it should be no problem for Ann Baker to simply name her company, I ask her to do so.

      • Guest (xenos)

        On Varoufakis’ blog, she put two consecutive posts (I found them today with my Google search). The first was to ask for an address to post some correspondence to him, between her husband and an eforia. As I recall, she said the factory was owned by her husband (makes sense). The following long rambling post was to tell Varoufakis that economic ideas don’t work in Greece because all that matters is corruption,and basically that he is an idiot (couched in indirect terms).

        I know IT people here, and can ask around. I agree that 71 is implausibly old for a computer specialist, but she could just be an owner who knows fuck all about computers. Greece has plenty of semi-educated business owners: the smarter among them employ people who do know! But even if these claims are true, her really negative and aggressive approach to everyone and everything is just obsessively destructive. You cannot make any contribution to progress with this approach, which is why I am concerned that you may be right about the Turkish connection.

      • Troll support indeed!
        Face it guys, you are OUTED.
        “Ann Baker””annie/athens”, your failure to name your purported greek company on a greek blog – free advertising BTW – 100% discredits you.

        It is horrendous and tragic that Cyprus’s crisis has brought out Turkish, German, EU and no doubt Israeli trolls working overtime. (Christofias recognised Palestine before stepping down). At least these appear to be the main trolls.

        Two phrases from English 20th c history keep coming to mind, up-dated: “plucky little Cyprus” and “a faraway place of which we know nothing”. The first refers to overrun Belgium, the second is Chamberlain on Czshekoslovakia.

  24. Another_Greekboy

    It’s always educational to see where people get their information from. Yesterday our friend annie aka Ann Baker posted a rambling comment on eKathimerini about Chinese perception of the Middle East (where Greeks belong according to her). Where did she get it? Copied and pasted from the Gatestone Institute ( That should tell you something about her leanings.

    • Actually read it on an Israeli site, but it isn’t important where it came from. The point made is that too many Greeks prefer to stay in the Middle Eastern/Turkish mentality of paying more attention to the past than to the future. At the same time the point of feeling that you are continuously victimised is also non productive and doesn’t build confidence in our ounger generation. Rubbish that I consider Greeks belong in the Middle East, sadly too many act as if they belong there. This was my whole point, which obviously was above you, that we have to concentrate on the future, whereas half these blogs are still dwelling in the past.

      • Another_Greekboy

        Again with the essentialist mode of thinking. I have to say you are persistent.

        And I have to say I love the fact that no rhetorical or logical fallacy seems to scare you: generalizations, guilt by association, ad hominem attacks…wow!

        I have to say my favorite is when you assert that you don’t believe something in the first part of a sentence (“Rubbish that I consider Greeks belong in the Middle East”), only to assert exactly that belief in the latter part: “sadly too many act as if they belong there.”

        Annie, you’re earning your money. One of the better trolls out there.

      • Guest (xenos)

        Well spotted, Greekboy! The rant was really spectacularly irrational and self-contradicting!!

  25. Sorry Nick, can’t have serious debates on your site, as you can see anyone that disagrees with them are insulted and comments have nothing to do with the article.

    • Ann: you have never had a debate (serious or otherwise) in your life! At least, not on the visible internet. You simply spout off anti-Greek or anti-Cypriot rants, with no intention of listening to a reply. You are also highly offensive to people, and then claim that they are offensive to you. Your disrespect to others is just extreme.

      I repeat my suggestion about medical advice, unless you actually are a professional troll. It looks to me now as if you are (which I had not assumed, previously).

    • Estevão Veiga

      Dear Ann,
      Don’t get too upset by a bunch of people (or is it a single one, Dean adopting many names?) who are insecure and try to build excuses for the failures by playing the victims. I want you to know that there are people who appreciate and agree with what you write.

      • Guest (xenos)

        The troll support club!

        No, I am not Dean. If you had better English you would see that I write in a very different style.

        Please tell us about Portugal, and how wonderfully their economy is going. I shall be visiting various cities in Spain, Portugal and Italy soon, so I can check your comments with reality.

      • Two or three of them, they are always worse when together.
        However, it’s simply not worth it as there is no intelligent feed it’s simply a slanging match. Have better things to do. On other sites people do complain but obviously on this site people don’t consider it’s worth the trouble.

      • Guest (xenos)

        I don’t think your whingeing about Greeks across multiple blogs counts as intelligent “feed” (whatever that is), Annie. Nor do I think that you can be 71 years old with such a poor command of English. I am 56 and the last generation that was taught English grammar in the UK — at least, outside of the elite schools such as Eton. Your English should be similar to mine, yet it is not. Why would that be?

        Good luck with your work trolling other blogs. It certainly keeps you busy!

  26. It looks as if they finally reached a quite good deal:
    – The money of small people, up to 100 k per person, ist saved. Just as guaranteed by Cyprus Government. Now backed by European Credits as Cyprus government couldnt stand for its guaranteed words.
    – High time that broken banks as Laiki can get broken even in Euroland, not only in Iceland. What is evident for every other industry (business can go bancrupt and will not always bailed out by taxpayers money) should get common for banks too.
    – It is also fair that the non-broken banks have not to pay – perhaps that openes a future for new trust in finance industry in cyprus.
    – Better having a help by IMF and Troika-credits that state bancrupt of Cyprus. As other allies as Russia or Greece didn’t offer any substantial help when Cyprus was really in need. In bitter times you see the worth of allies – whom to offer credit and whom to offer words.
    – Interestingly this final deal already had been offered by IMF/Troika earlier, but the Cyprus Government didn’t accept it – and the Troika was too soft to push it through earlier. Was the Troika not strict enough before?

    The road gets bumpy for cyprus, but the total crash has been prevented.

    • Quite a good deal? You are just a German troll.

      The deal is exactly what Germany wanted to happen all along, and the Cypriots resisted (which is why the first arrangement was such a mess). Now, they have destroyed Cyprus as an offshore banking economy (becase two banks bought Greek government bonds and lost their money with the haircut), they have destroyed the savings of any Cypriot with more than 100,000 euros in either of the two large banks — and with this they have probably destroyed the reserves of some medium sized businesses; they have destroyed all confidence in any bank in southern Europe; the austerity measures that are being imposed will destroy the economy to look like Greece; and they have imposed capital controls and account restrictions.

      So, keep your Kraut propaganda away, please.

    • Thanks Xenos, you speak for me too.

      • Estevao Veiga

        Effectively, apparently the first consequences of not having a deal made everybody more reasonable.
        Rest the mystery for me of whom Guest and Elenis are talking about since the European Community is lending money to Cyprus, not withdrawing funds from Cyprus.

      • Guest (xenos)

        Estevao: if you are so stupid as to think this was a good deal, then ask yourself why Merkel (and her cronies) is very happy with it and all of Cyprus is upset, if not angry.

        Of course, you are not so stupid, since you are another paid troll.

  27. Estevão Veiga

    Since borrowing money is a voluntary contract, the fact that Cyprus is doing it shows that they had concluded that, in the dire financial situation that they discovered themselves, what is being offered by the IMF plus EU is literally the best deal they have on Earth.
    For this reason, it is difficult for me to understand why you are complaining about the best offer to Cyprus, and not about the non existent offers of everybody else.

  28. Estevão Veiga

    You must also remember that a good deal is good for both sides of the deal. The fact that nobody else appeared with a better deal shows that Cyprus was not offering anything of interest for the other counter parties.

  29. Well, if you have a better alternative to save the banks, try to convince the elected representatives of the Cypriots of your case.
    In the meantime, they looked at all the options on their table, and their conclusion that the best one that they had was to enter in a voluntary agreement with the IMF and EU. And, personally, I think they made the right choice.

    • It has nothng to do with the Cypriots. They know perfectly well that this is a mess: this is the decision of the German government to decide the future of other countries, by abusing their power in the eurozone. Germany has a long history of abusing its power in Europe — with a short break since 1945.

  30. The only power that the German may have is the power of the purse. This is a power that they discovered having by accident. If other Countries don’t want to give them this power, there is a solution, don’t vote for politician who overpromise and under deliver.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s