Plutocrats’ plan to rob savings accounts to fund “bailout” creates panic, ires Cypriots, Russians
By Pete Papaherakles
We will not become
guinea pigs for the imposition
of neo-colonialist
measures. We vote
‘No’ to enslavement.
guinea pigs for the imposition
of neo-colonialist
measures. We vote
‘No’ to enslavement.
On March 19, Cyprus defied an ultimatum
by European Union (EU) bankers to tax
all bank deposits as a pre-condition to receiving
a “bailout” for its economy.
“We will not become guinea pigs for the imposition
of neo-colonialist measures,” announced Parliament
President Yiannakis Omirou. “We vote ‘No’
to enslavement.”
Cyprus is the easternmost European country,
only 50 miles away from the Syrian coast and the
Russian naval base at Tartus. It is a member of the
European Union and one of 17 countries in the Eurozone.
With about a million people, its $25 billion
economy accounts for only 0.2 percent of the EU’s
total gross domestic product.
In the past few years, Cyprus has been plagued
by plummeting real estate prices, a sharp decline in
tourism and a government deeply in debt to EU
bankers. As the fifth country ensnared into the
EU/IMF “bailout” debt prison like the four “PIGS”
countries—Portugal, Ireland, Greece and Spain—
Cyprus could be called a “piglet.” But it is also in a
key geographic location as the war for control of
that area’s resources is escalating. Cyprus is located
next to a huge amount of natural gas, which the
U.S., Israel, Russia and Turkey all want to exploit.
After lengthy talks in Brussels with the EU and
IMF, it was recently agreed that Cyprus would receive
a $13 billion bailout. But for the first time, at
the insistence of the German government, Cyprus
was asked to collect $7.5 billion directly from the
people through a special levy on their savings. The
newly elected president, Nicos Anastasiades,
agreed, although he achieved office on promises not
to accept such terms fromEurope.Hewas confident
that he could get the Cypriot parliament to pass it.
As the banks were closed for the weekend,
Anastasiades told his countrymen in a televised
statement that all accounts under 100,000 euros
would be “trimmed” by 6.7 percent and all those
over that amount would pay 9.9 percent. It was either
this deal or state bankruptcy, he said.
Cypriots were shocked and angry, especially
when they realized that over the weekend their accounts
were frozen and transactions were impossible.
Panicked, theymade a run on ATMmachines
to withdraw as much as possible while they still
could. Banks were closed on March 18 due to a national
holiday, and officials said they would remain
closed until March 21 to prevent panicked reactions
by customers. An emergency vote by parliament
was scheduled forMonday, although it would
be postponed until Tuesday.
Russians were even angrier. Cyprus is a tax
haven of sorts and many wealthy Russians, including
oligarchs, have large deposits in banks on the island.
Of the 70 billion euros in Cypriot banks, 20
billion belong to Russians, who would see 10 percent
of their savings disappear. Gazprom, the Russian
mega-energy company, offered to give Cyprus
the cash they needed in exchange for drilling rights
to part of the gas fields Cyprus controls, but Anastasiades
refused.
Russian president Vladimir Putin was livid. He
called the Cypriot president and told him that he
should replace the Cypriot flag at the presidential
palace with the German flag. Putin said that if this
10 percent tax was levied on Russians then he
would see to it that all Russian accounts were
closed and all Russian investments in Cyprus terminated.
In the end, the bailout terms were not approved
by Parliament, and it is clear Russia’s pressure was
a major influence. A power struggle between Russia
and the EU is sure to ensue.
——
Peter Papaherakles is AFP’s outreach director.
by European Union (EU) bankers to tax
all bank deposits as a pre-condition to receiving
a “bailout” for its economy.
“We will not become guinea pigs for the imposition
of neo-colonialist measures,” announced Parliament
President Yiannakis Omirou. “We vote ‘No’
to enslavement.”
Cyprus is the easternmost European country,
only 50 miles away from the Syrian coast and the
Russian naval base at Tartus. It is a member of the
European Union and one of 17 countries in the Eurozone.
With about a million people, its $25 billion
economy accounts for only 0.2 percent of the EU’s
total gross domestic product.
In the past few years, Cyprus has been plagued
by plummeting real estate prices, a sharp decline in
tourism and a government deeply in debt to EU
bankers. As the fifth country ensnared into the
EU/IMF “bailout” debt prison like the four “PIGS”
countries—Portugal, Ireland, Greece and Spain—
Cyprus could be called a “piglet.” But it is also in a
key geographic location as the war for control of
that area’s resources is escalating. Cyprus is located
next to a huge amount of natural gas, which the
U.S., Israel, Russia and Turkey all want to exploit.
After lengthy talks in Brussels with the EU and
IMF, it was recently agreed that Cyprus would receive
a $13 billion bailout. But for the first time, at
the insistence of the German government, Cyprus
was asked to collect $7.5 billion directly from the
people through a special levy on their savings. The
newly elected president, Nicos Anastasiades,
agreed, although he achieved office on promises not
to accept such terms fromEurope.Hewas confident
that he could get the Cypriot parliament to pass it.
As the banks were closed for the weekend,
Anastasiades told his countrymen in a televised
statement that all accounts under 100,000 euros
would be “trimmed” by 6.7 percent and all those
over that amount would pay 9.9 percent. It was either
this deal or state bankruptcy, he said.
Cypriots were shocked and angry, especially
when they realized that over the weekend their accounts
were frozen and transactions were impossible.
Panicked, theymade a run on ATMmachines
to withdraw as much as possible while they still
could. Banks were closed on March 18 due to a national
holiday, and officials said they would remain
closed until March 21 to prevent panicked reactions
by customers. An emergency vote by parliament
was scheduled forMonday, although it would
be postponed until Tuesday.
Russians were even angrier. Cyprus is a tax
haven of sorts and many wealthy Russians, including
oligarchs, have large deposits in banks on the island.
Of the 70 billion euros in Cypriot banks, 20
billion belong to Russians, who would see 10 percent
of their savings disappear. Gazprom, the Russian
mega-energy company, offered to give Cyprus
the cash they needed in exchange for drilling rights
to part of the gas fields Cyprus controls, but Anastasiades
refused.
Russian president Vladimir Putin was livid. He
called the Cypriot president and told him that he
should replace the Cypriot flag at the presidential
palace with the German flag. Putin said that if this
10 percent tax was levied on Russians then he
would see to it that all Russian accounts were
closed and all Russian investments in Cyprus terminated.
In the end, the bailout terms were not approved
by Parliament, and it is clear Russia’s pressure was
a major influence. A power struggle between Russia
and the EU is sure to ensue.
——
Peter Papaherakles is AFP’s outreach director.
Δεν υπάρχουν σχόλια:
Δημοσίευση σχολίου