Monday, March 18, 2013

Cypriot Bail-Out: Seriously Mrs. Merkel?

The drama that unfolds in the Euro-zone seems to be never ending. This weekend another member of the block has applied for a bail out. One of the Mediterranean nations-Cyprus, applied for a 10 billion € bail out, but that is not where the shock ends!

Cyprus had a very strong currency and a thriving economy before it joined the Euro-zone, but just like Ireland is now forced to a humiliating bail-out. Only this time the European leaders have agreed that it must be the bank account holders that will take the burden of the loans' repayments.

The inhabitants of the island nation will see their savings in the Cypriot banks be a subject to taxation, in order to pay for the bail out. Such move of course has been suggested by Mrs. Merkel and her party in Germany, in order to reassure the German voters that they won't be the ones who will pay the bill again.

Mrs Merkel made it clear that every depositor in Cyprus is responsible for the situation the country is in now, so they should be the ones who must help the country now with their savings. That reminds of the constant smear campaign against another two nations that were bailed out, Greece and Ireland.

The Greeks were lazy and tax evading, while the Irish overspending so it is justified for them to go through the harsh austerity that has been imposed on them. All with the cooperation and tolerance of these two countries' leadership! Nations that receive a bail out from their "partners," must be forced to be responsible and abide to the rules they have signed; that is the excuse the European leaders are giving us, for the harsh measures that some Europeans have to live with now days.

What I long to hear coming out of any European leader's mouth is a word that will place some blame on the European banks and bankers. And of course the real perpetrators of this crime, the European governments themselves. Both of them are to blame for the irresponsible practices and policies that led Europe in this mess, yet they have the nerve to blame the ordinary people and ask of them to pay for their mess.

Forcing people to pay out of their bank deposits, their life long savings, is a practice that fits better to a tyranny not a democracy. And the same scaremongering tactics that were applied on Greece and Ireland, are applied on Cyprus now too.

"If you vote no and reject our deal, we won't give you the money that you so much need!" Well I will remind the German and other rich investor countries' voters that the bail outs that they are giving to "poor" and "irresponsible" countries are not tax free. They come with a huge interest attached, so they are not a "gift" rather an investment that will have to be repaid with a huge profit for Germany and the other "donors."

Not to mention that Germany is gaining hugely by a weaker Euro. It is clear to me that all this is nothing but a war of interests among the European elites. And the Cypriot President Mr. Anastasiades just confirmed that, by claiming that he was "bullied" by Brussels and given no choice but to accept such terms for the bail out.

What Mr Anastasiades forgot to mention, is who "bullied" him in Brussels. Was it some EU officials or the other European leaders and diplomats, just like Mrs Merkel and Mr Schauble, Germany's finance minister? Because by saying "Brussels," our leaders are placing the blame to some invisible corrupt EU officials, when the reality is that the blame falls right into our government's lap.

A great way of shifting the blame to EU, raising the anti-EU sentiments among the European population, while the decisions are obviously taken by our governments on a inter-governmental and non transparent level. Decisions are taken behind closed doors remember, in all those EU summits.

The reality is that the European elites want to end Cyprus' status as a tax haven and kick out the Russians and other non Europeans who use the island for money laundering. Russian investors have for long now investing in the island and moving their wealth over there. Europe wants to clear its banks from the Russian influence and potential "dirty money."

In this case why don't they call a spade a spade, rather prefer to blame the ordinary citizens of the country and force everyone to bear the same consequences? Not everyone is responsible for the shortfalls of the Cypriot and European banks. Why no bank was ever held responsible for money laundering, if that is the case?

And the question is, will Europe help Cyprus deal with the aftermath of such action? Not by pouring bucket loads of money and keeping the Cypriot economy on life support as they did for Greece. But as soon as they kick the Russians out, their money and their investments, will Europeans rush in to fill the gap?

By forcing Cyprus to enter that dangerous power game, it is exposing it in complications with Russia and its rich elites that have been investing in their economy. Russia already reacted negatively on the news, with its Prime Minister Mr Medvedev stating : "“This simply looks like the confiscation of other people’s money. I do not know who the author of this idea is, but this is what it looks like. We are unfortunately acquainted with such practices from Soviet times.”

And he is right! If Europe wants the Russians out of its banks, then what compensation will they give to Cyprus in order the country to follow Europe's orders? Will Europe invest in Cyprus creating jobs and boosting its economy? And what are they going to do for other tax havens in the Union, like Luxembourg for example.

Why are they being treated differently, perhaps just because they are one of the founding members of the EU? The Germans and French are quick to bash Ireland for its lower corporate tax rates and now are keen to end Cyprus' tax haven status, but they do not have the same attitude towards Luxembourg. Is it because it is them who tax evade in their neighboring country and not Russians, just like the Cypriot case?

I find it outrageous what is happening right now in Europe, when the people are being forced to pay for our elites' games of  power. It is not clear yet if all the account holders in Cyprus will be affected, or just those with a certain amount or over, type of account or financial activities. But I suspect that will be the ordinary hard working citizens that will bear the burden, while the rich tax evaders will escape unscathed again. Just what has happened in Greece.

Europe's policies and plans are not working! They have already created a divide and hatred between the Northern sates and the Southern. How long before they tear Europe apart?




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