Cypern tegner fremtidens EU

EU, Historie, Politik, Økonomi og finans — Drokles on March 30, 2013 at 11:25 pm

“It is hard to imagine a more stupid or more dangerous way of making decisions than by putting those decisions in the hands of people who pay no price for being wrong.”

Thomas Sowell

Fra Daily Mail

Two British historians, Christopher Booker and Richard North, identified this system in their history of the EU, The Great Deception: ‘It is central to the nature of the “project” that the parliaments, officials and judiciaries of each of the member states should all be left in place. But behind them [the project] erected a new supranational power structure which worked through these national institutions, controlling them and enlisting their active collaboration in a way that remained largely out of view.’

If you go through the statements of Monnet and other founders of the project as long ago as the 1920s, ‘the one thing above all the “project” could never be, because by definition it had never been intended to be, was in the remotest sense democratic. The whole purpose of a supranational body is to stand above the wishes of individual nations and peoples.’

It would be supranational government by technocrats, ‘unsullied by any need to resort to all the messy, unpredictable business of elections.’

‘The only useful role left to the politicians in this process was to lend it a veneer of democratic legitimacy.’

Defiance

Which is why the nomenklatura were in such a fury when the Cypriot parliament refused to cast a single vote in favour of the deal: the members of parliament were not being ‘European.’ Indeed, in a top level conference call among eurozone officials on Wednesday – notes from which were leaked to Reuters – the Cypriot parliament’s democratic defiance was denigrated as ‘emotional.’

In fact, the parliament’s defiance was magnificent. But I did not cheer. I know that in the EU, a Yes vote is forever, but a No vote is only ever temporary. The Troika apparatchiks immediately delivered the message that the parliament must keep voting until they get the right answer.

This technique is familiar to anyone who remembers the politics of the USSR: vote all you want, but there is just one possible result.

I am not the only one to see that Soviet similarity. I go back to that former senior commission economist I mentioned at the top. He is Bernard Connolly. I have quoted before from the new edition of his book, The Rotten Heart of Europe.

Mr Connolly was infamously forced out of his job in 1995 when he wrote the book questioning the prospects of monetary union. From his vantage point as one of the nomenklatura, Mr Connolly saw the truth of the ambitions of this elite. They wanted ‘to complete the elimination of sovereignty, law and political legitimacy in Europe, freeing elites – a European nomenklatura – from any residual constraints either of democratic control or law.’

To do this, they have persuaded the ‘useful idiots’ across the member states to suppress the results of referenda and to topple democratically-elected governments ‘in manoeuvres reminiscent of Stalin’s tactics in Eastern Europe after the war.’

What Mr Connolly means, first, are the results of referenda not just in Ireland, but in the Netherlands and France. In 2001, the then-president of the European Commission, Romano Prodi, and other members of the elite made a decision behind closed doors to draw up an EU constitution. They promised that it would not come into effect unless it had the unanimous consent of all member states.

Fifty ways to win

Within a single week in 2005, both the French and the Dutch voters rejected the constitution. Here is how Nigel Farage, MEP and leader of the UK Independence Party, recalled the moment in a recent interview in the Financial Times: He was drinking champagne in the Brussels press bar to celebrate the Dutch rejecting the EU constitution in a referendum when a German MEP came by and said, ‘You may have your little celebration tonight but we have 50 different ways to win.’

Fra Pajamas Media

Cyprus has agreed to a ten billion euro ($13bn) deal with eurozone and IMF leaders to bail out its banks, and to prevent the Mediterranean island nation from exiting the European single currency. However, Cypriots can be forgiven for not taking to the streets to wave flags and honk their car horns. They’re finding out just what the “protection” afforded by the euro looks like, and it’s more akin to the kind offered by ski mask-wearing heavies in certain parts of New Jersey than the financial security Monsieur Trichet promised.

Under the terms of the deal, the country’s second-largest bank will be shut down, and its largest bank will be restructured. Depositors with more than €100,000 ($130,000) in either bank will face losses in the vicinity of 40 percent. In a bid to prevent a run on the island’s other banks and to stop money from fleeing the country, capital controls have been imposed — guaranteeing that there will still be capital flight once the restrictions are lifted.

The effect on the Cypriot economy will be catastrophic. Businesses serving the banking sector will begin to fail immediately, and others will follow. Property values will plummet and unemployment will soar as the country is plunged into recession.

(…)

In past bailouts, the inevitable “haircut” was imposed mostly on bank bondholders, but because most of the assets of Cypriot banks are in the form of deposits, it was decided that depositors would have to take a substantial hit. An initial bailout proposal caused uproar last week when it emerged that insured depositors would face losses; under EU law, bank deposits up to €100,000 are guaranteed, but because that guarantee only applies in the event of a bank failure and the banks had not at that point failed, the savings were considered fair game.

Professor i økonomi Christopher Pissarides skriver for CNN

Prudent bankers attracted depositors by following low-risk strategies. But now their depositors are asked to pay for the high-risk strategies of other bankers. High-risk bankers risked their depositors’ money. But their depositors will not lose more than the depositors of other banks. This is the logic of the Cyprus “bailout” by the International Monetary Fund, the German-led Euro group and the European Central Bank. Delinquent bankers’ losses are protected by prudent bankers’ gains.

What is the justification? It’s better than letting the two risk takers go bankrupt, the argument goes. That probably is the case. But then Greek banks and those of other nations in trouble were also bankrupt, and yet the same troika lend to them on better terms in order to avoid bankruptcy.

Greece got 140 billion euros; the haircut on Cypriot depositors will yield 5.8 billion. But Cyprus could not have the 5.8 billion out of European funds set up to rescue banks in trouble. Deposits under 100,000 euros are insured in Europe. Yet, the terms of the euro group are so harsh, that the government of Cyprus could not raise the money without some haircut on the insured deposits.

It is important to note that on Tuesday the Cypriot parliament rejected a €10 billion eurozone bailout package due to investor alarm over the proposed tax on existing bank deposits. However we don’t know what will come next. Maybe the tax on the insured deposits will yield 2 billion euros. Agreed said the euro group: we’d prefer not to tax deposits under 100,000 euros but if you cannot afford to raise the 5.8 billion in any other way, then you have no choice but to tax the small depositors.

What does this tell us about the European project though? Is the eurozone a partnership of equals who care about each other’s subjects? Or is it a vehicle for scoring political points by the strong and powerful?

Russia’s involvement with Cyprus as an offshore centre keeps coming up in these discussions. Attracted by a corporate tax rate of 10% — half that of Russia’s — Russians have been investing money into Cyprus from the early 1990s. The money is then repatriated through investments in Russian ventures — a legal way of reducing tax.

Cyprus accepted an order last month by the Eurogroup to allow an investigation into possible breaches of money-laundering rules, which is under way. But the euro group could not wait for the results before imposing the haircut; not a single case of money laundering has been discovered so far.

I have been involved both with central bank policy and with private banking in Cyprus for years (and at different times) and I have never come across anything non-compliant with European rules.

Og det har konsekvenser, som Spiegel, beskriver

The rigid austerity measures brought on by the euro crisis are having catastrophic effects on the health of people in stricken countries, health experts reported on Wednesday.

Not only have the fiscal austerity policies failed to improve the economic situation in these countries, but they have also put a serious strain on their health care systems, according to an analysis of European health by medical journal The Lancet. Major cuts to public spending and health services have brought on drastic deterioration in the overall health of residents, the journal reported, citing the outbreak of epidemics and a spike in suicides.

In addition to crippling public health care budgets, the deep austerity measures implemented since the economic crisis began in 2008 have increased unemployment and lowered incomes, causing depression and prompting sick people to wait longer before seeking help or medication, the study found.

The countries most affected by this have been Portugal, Spain and Greece, the latter of which saw outbreaks of both malaria and HIV after programs for mosquito spraying and needle exchanges for intravenous drug users were axed. There were also outbreaks of West Nile virus and dengue fever.

Og videre

“There is a clear problem of denial of the health effects of the crisis, even though they are very apparent,” lead researcher McKee told Reuters, comparing their response to the “obfuscation” of the tobacco industry. “The European Commission has a treaty obligation to look at the health effect of all of its policies but has not produced any impact assessment on the health effects of the austerity measures imposed by the troika.”

Og det er den slags, der får Nigel Farage til tasterne i Telegraph

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.

(…)

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.

Jeg vil ud af EU!

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