There is a glimmer of hope – and that is the Cypriots’ desire to reassert independence - UKIP Leader Nigel Farage MEP.
• The brinkmanship that has been on display over the Cypriot financial crisis makes obvious to all but the wilfully blind the level of political determination in Brussels to save the euro at all costs. No amount of empirical economic evidence – or misery for ordinary people – matters when the dreams of the continent’s elite are threatened.
After the French and Dutch rejected the European Constitution in 2005, the then European Commissioner for Communications, Margot Wallström, put it perfectly. She and the other EU cheerleaders had invested “a lot of energy and political capital” in the project, she declared, and they were not going to give up on it. No matter what the people said, no matter what the economic realities were.
Five years later, this delusion in the face of brute reality has reached its apogee in Cyprus.
How can it be that the German parliament gets to vote on the wholesale theft of money from richer Cypriot depositors, while the Cypriot parliament has no such voice? Instead the theft is labelled “restructuring” – and as such there will be no Cypriot democratic oversight of the economic rape of their country. Be under no illusion: this is being done not to solve the Cypriot economy, but to save the euro. The crashing irony is that, in their February elections, the Cypriots threw out the Communists. One could ask why they bothered.
But at what cost is the euro being saved? What we can see here is an almost deliberate attempt to set the people of Cyprus against each other. By restricting the damage to those who have deposited 100,000 euros in the bank (rather than across the board, as was the previous suggestion) they will be undermining social cohesion, pitting those with against those without. It destroys any pretence that the EU has at its heart a belief in democracy, or in those warm words so often repeated about it being the guardian of essential “European” qualities. In truth it was only a fair-weather friend and its behaviour in this storm, as in others, is to drop these benevolent ideas like hot stones.
Worse still, Jeroen Dijsselbloem, the Dutchman who heads the Eurogroup of eurozone finance ministers, has made it clear that this is now the template for all eurozone countries. Think about that for a moment. These politicians really believe that all the money in the eurozone is actually theirs – as if people have it on sufferance, and not by rights. Since Dijsselbloem spoke, bank shares in Spain, France and Italy have collapsed: citizens of these countries not unreasonably fear the worst.
All this is done for the European elite’s devious ends. One of which is the so-called “Target 2”. This is the eurozone bank clearing system, by which private transfers of money from one member to another are cleared through the national central banks. If, for instance, 100 euros is moved from a Greek bank deposit to a German bank deposit, the Greek central bank ends up owing another 100 euros to the Bundesbank (through the European Central Bank).
At present, the Bundesbank is owed 600 billion euros thanks to Target 2, mainly as a result of capital flight from Mediterranean countries. But, unlike with normal debts, the debtor countries have no contract or understanding about how this should be repaid.
Cyprus has just been granted a 10 billion euro bail-out loan from the other eurozone countries. But the irony is that Cyprus is already in receipt of a bail-out worth 7.5 billion euros – this is the Target 2 debt of the central bank of Cyprus. And they are desperately trying to prevent this growing as a result of further capital flight.
Perhaps this is the most ominous result of the Cyprus debacle. While the details of the controls to prevent money leaving Cyprus are not yet known, they will quickly lead to euros in a bank account there being worth less than euros in bank accounts elsewhere.
I have been saying this since the start of the latest chapter of the crisis: that the level of risk and the prospects of contagion are such that those who have deposits in other southern European countries should get them out as soon as possible. Don’t just take my word for it. The economist and journalist Anatole Kaletsky yesterday made his support for my comments utterly clear on Twitter: “Anyone with more than 100,000 euros in a French, Spanish or Italian bank is crazy if individual, or criminally negligent if a company director.”
There is, however, a silver lining to all of this – a small one, but possibly the most important aspect in the whole sorry debacle. Cyprus is different from Greece, different from Ireland and different from Spain and Italy. In Cyprus we have a population that would prefer to leave the eurozone than comply with the privations of Germany and Brussels. We have a parliament that has already voted down one scheme, and is thus barred from debating this one. We have a Cypriot archbishop who supports his people rather than the EU. They are not happy and they are pointing to a new reality.
That David Cameron is welcoming these plans shows how far the British political class is from any ideals of democracy, accountability and liberty. Instead, the future to him is a technocratic, post-democratic world, run in the most part by unelected, fanatical and deluded power-mongers in Brussels and Frankfurt.