Cyprus drama thread

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(From the Dutch newspaper Trouw. Dutch words and names—-Trouw, Vonk—-make me giggle a bit, it’s like they’re not even trying.)

I’ve been wanting to write all week about this—-the total megafail that has been the whole Cyprus bailout situation—-because it really is history in the making. If you aren’t paying attention, you should. Hardly a month goes by without the Eurozone crossing yet another Rubicon, but this one is a bit more like crossing the Caspian Sea or something. I haven’t on account of just being too busy watching it with open-mouthed awe to be able to write about it. Day after day the absurdity level just doesn’t stop increasing. Heaven help me, I find myself nodding along regularly with right-wing Corner blogger Andrew Stuttaford.

For the record, it is not just about Cyprus being a tax paradise for Russian mobsters. If it was ever about that at all. The focus on that aspect of the crisis stems primarily from German politicians’ attempts to, um, defer the true reckoning for all of this down past the October German elections. Margaret Thatcher, Merkel is not.

With a few words, Germany’s fiscal Dr. Strangelove Wolfgang Schäuble completely undercut the basis of the Greek Cypriot economy. You may not approve of banking-based economies and tax havens. I don’t. But, you know, Cyprus was a member of the Eurozone whose banking-dependence was known and whose principal problem was the bond haircut that occurred during the Greek rescue, insisted on in part by Germany!

And German politicians have little reason to object to the negative characterization of their behaviour by Cypriot residents…when the good Frau Kanzlerin reportedly expresses frustration that the island doesn’t realize that “its business model has come to an end.” Who is she to say this? How is this anything other than an dictation to another European state? Already the nervous titterings from the other small European states—-often heavily invested in banking—-are starting up.

Anyway, the upshot is that keeping your money in a Southern European bank where it can be subject to, at the very least, capital controls—-as all accounts no matter how small will be in Cyprus for at time, defying the entire concept of monetary union—-is now not necessarily as safe or wise an idea as it might have been. To put it mildly.

Such are the fruits of austerity without relief.

That’s really only the surface of what can be written about this subject, and I probably won’t have time to get back to again (we’ll see), so have fun speculating in the comments…

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This page contains a single entry by Mandos published on March 23, 2013 3:32 PM.

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