Skip to main content

ECB's silent coups - Next victim: Cyprus

After ECB's silent coups against Ireland and Italy, Frankfurt will keep sending ultimatums to the eurozone governments. If they don't bailout the banks, or impose austerity, it threatens to sink the economy into chaos by cutting liquidity. The pretext is always the huge public debt. But when Cyprus' turn comes, there is a 'slight' problem: Cyprus did not have a significant debt.


The real problem of Cyprus was not the public debt, but the speculation of its private banks. In collaboration with Greek bankers and thanks to ECB's tolerance, they were burdened with Greek bonds - which was worse than trash. According to Pampos Papageorgiou, a Cypriot politician with the Progressive Party of Working People (AKEL), Deutsche Bank and other foreign banks were trying to get rid of them. They offered them with discount and Cypriot banks bought them. Papageorgiou concludes that, it is surprising that the supervising authorities, primarily the Cypriot supervising authority, and the ECB, did not react to that.

Demetris Christofias, former President of Cyprus, says that the governor of the Cypriot central bank instead of supervising the banks, was trying - by violating statutes as well as his own role - to impose the neoliberal policy on the Cypriot government.

Speculation will end with a clack and a whimper, with the infamous PSI, Greece's bankruptcy, the big haircut.

In 2012, the EU and Greece's creditors decide to reduce the Greek debt with the famous haircut. Anyone with Greek bonds would exchange them with new ones with a nominal value reduced by 53%. Greek and other European banks had bonds, but they were recapitalized. Therefore, taxpayers paid the price. The ECB also had bonds, but they were excluded from the haircut. 15,000 families had also invested in those bonds and thought they had chosen a safe investment. With the haircut, they lost most of their savings. Seventeen people committed suicide for this reason.

At the same time, the Greek government suddenly turned the deposits of public bodies and of social security funds into bonds that were automatically cut. The funds alone lost 16.2 billion euros this way. In order to save the banks, the EU forced Greece to get yet another loan and its public debt skyrocketed.

At the same time, Cypriot banks that were gathering Greek bonds through speculative transactions, felt like the rug was pulled from under their feet.

After the haircut, Cyprus depends on ECB's liquidity and the bank comes to impose its terms: a new memorandum. Pampos Papageorgiou states that, there is a moment in the Cypriot crisis where Asmussen, a member of the executive board of the ECB, got up and said that 'if there is no solution, if you do not accept, the funding of Cyprus Popular Bank stops as of tomorrow'. Therefore, a bank would have shut down and this would have a domino effect on the rest of the banking system. It was a blackmail that was possible due to ELA (Emergency Liquidity Assistance).

Stavros Tombazos, associate professor at the Department of Social and Political Sciences of the University of Cyprus, says that the way the EU institutions have treated Cyprus is undemocratic. The Parliament was forced to vote the laws that the memorandums prescribe, under the threat of a greater disaster. That's why we are talking about debt colonies, as in the case of Greece. It's a new form of dictatorship.

Christofias administration accepts the memorandum, but now, the EU asks for more.

As Tombazos says, they waited for the government to change in February 2013, and renegotiate the memorandum on extortionate terms with the new Right-Wing government.

The EU will experiment with a new weapon in Cyprus, the bail-in, the confiscation of citizens' deposits. This time, Brussels and Frankfurt are involved in a geopolitical game, as well. Berlin uses the EU mechanisms to hit the Russian capital in Cyprus. Christofias says that, when this harm was done, they used the crisis, in order to attack the Russian capital because the haircut cost billions to the Russians.

As Papageorgiou says, before the enforcement of the bail-in, a report by the German intelligence was published, saying that Cyprus was a place of money laundering. It was a kind of propaganda because Cyprus was neither better, nor worse than the other financial centers. Almost three years later, they announce with great fanfare, the exit of Cyprus from the memorandum. But again, the truth is 'slightly' different. This experiment has condemned Cyprus in a state of deflation, of zero development, of an abrupt transfer of wealth from the bottom up, of nonstop immigration and of a misery, in general, that is not only financial but social, as well.

Finally, Tombazos concludes that, all these years of crisis, the profits of businesses in Cyprus have not decreased at all. Salaries drop in Cyprus, but profits don't. In this way, there is a rise of the degree of exploitation of labor force.


Information taken from the new documentary This Is Not A Coup by Aris Chatzistefanou

Related:

Comments

Post a Comment

Popular posts from this blog

In another bizarre moment, CNN suffers from a real-journalism crisis and exposes the US war crimes in Yemen ... again!

It’s almost like watching The Twilight Zone!
globinfo freexchange
When the corporate media finally decided to dedicate some of their 'precious' time to focus on the war crimes in Yemen, we thought that it was just a smokescreen. The 'unexplained phenomenon' happened after the unimaginable war-crime in which a school bus was bombed by the Saudi coalition, fully supported by the US.
The global condemnation was so loud that the corporate media couldn't avoid it. They had to speak about it. However, we were right. It was just a small parenthesis away from the common agenda. The US-Saudi coalition war crimes in Yemen continue at the same rate, but the corporate media continue to act like if the war doesn't even exist.
Yet, surprisingly enough, we had an unexpected exception to this corporate media norm. CNN decided to return to the issue and condemn the US involvement in Yemen!
In the following video, Kyle Kulinski was also surprised by the fact that CNN covered again th…

WikiLeaks paper reveals Congressional think tank specific techniques for 'persuading' audiences

This document was obtained by WikiLeaks from the United States Congressional Research Service. The CRS is a Congressional "think tank" with a staff of around 700. Reports are commissioned by members of Congress on topics relevant to current political events. Despite CRS costs to the tax payer of over $100M a year, its electronic archives are, as a matter of policy, not made available to the public. Individual members of Congress will release specific CRS reports if they believe it to assist them politically, but CRS archives as a whole are firewalled from public access. This report was obtained by WikiLeaks staff from CRS computers accessible only from Congressional offices.
globinfo freexchange
A report from April 12, 2007, was "Prepared primarily for congressional staff members called upon to help prepare speeches for Members,” and “provides basic guidance on obtaining speech material, using it to prepare a speech draft, and presentation.”, as we read in the abstract. …

Jeremy Corbyn: 'We are in touch with Bernie Sanders and his campaign'

globinfo freexchange
Jeremy Corbyn and Yanis Varoufakis had an interesting conversation in August 20, at the Edinburgh Book Festival. Varoufakis challenged Corbyn to lead an international progressive movement that will end the brutal policies of the dominant neoliberalism.
Interesting parts of the dialogue:
JC: We saw the way in which the European Central Bank treated yourselves and also the austerity that was imposed on Ireland on Portugal and Spain.
YV: It's not just a state. They committed a crime against the Irish people. The head of the Central Bank of Europe put a gun on the Irish Prime Minister's head and demanded that overnight the losses of private investors, mostly from Germany, should be transferred on to the books of the Irish state and the Irish Prime Minister's account. Now, that's, you know, robbery, just daylight robbery. That's what they did.
JC: I actually challenged the whole Maastricht idea, which established the European Central Bank, because it wa…

Τελευταία ευκαιρία για Grexit ... πριν αναλάβει ο Κούλης

globinfo freexchange
Η τελευταία κερδοσκοπική επίθεση κατά του τραπεζικού συστήματος δείχνει ότι ακόμα και όταν υποκύπτεις σε ότι ζητάει η διεθνής χρηματοπιστωτική μαφία, δεν είναι αρκετό.
Το ότι θα δικαιωνόμασταν για άλλη μια φορά και μάλιστα τόσο γρήγορα, πραγματικά δεν το περιμέναμε.
Μετά την υποτιθέμενη έξοδο από τα μνημόνια και το περίφημο διάγγελμα Τσίπρα είχαμε γράψει πως οι μετριοπαθείς 'Αριστεροί' προσπαθούν να μας πείσουν ότι τώρα η χώρα θα έχει περισσότερη ελευθερία να χαράξει τις δικές της πολιτικές. Δηλαδή, η χρεοκοπημένη Ελλάδα (που βρίσκεται σε χειρότερη κατάσταση απ'ότι όταν μπήκε στο πρόγραμμα διάσωσης), θα κολυμπήσει ξεβράκωτη στα ίδια νερά με τους καρχαρίες των αγορών και θα επιβιώσει. Αυτό πάνω-κάτω μας λένε.
Πράγματι λοιπόν, μετά από περίπου ενάμισι μήνα, ένα από τα βασικά εργαλεία του μηχανισμού της διεθνούς χρηματοπιστωτικής μαφίας (το Bloomberg), αποφάσισε να εξαπολύσει επίθεση κατά του τραπεζικού συστήματος και ο πανικός δεν άργησε να εξαπλωθεί. Όπω…

How Bezos tricked Bernie and workers

globinfo freexchange
The truth is that Bernie Sanders fought, and still fights for the workers more than any elected US president combined for decades. And his crusade against Amazon and Jeff Bezos' enormous greed resulted in the unprecedented decision of the company to raise minimum wage to $15 an hour.
But it was too good to be true.
As Bloomberg reported:
           Amazon.com Inc. is eliminating monthly bonuses and stock awards for warehouse workers and other hourly employees after the company pledged this week to raise pay to at least $15 an hour. Warehouse workers for the e-commerce giant in the U.S. were eligible in the past for monthly bonuses that could total hundreds of dollars per month as well as stock awards, said two people familiar with Amazon’s pay policies. The company informed those employees Wednesday that it’s eliminating both of those compensation categories to help pay for the raises, the people said.


As a pure product of the neoliberal culture, Bezos found the op…

The Podesta emails - top US plutocracy group attempted to approach Hillary Clinton under newly elected chairman Jeff Bezos

WikiLeaks series on deals involving Hillary Clinton campaign Chairman John Podesta. Mr Podesta is a long-term associate of the Clintons and was President Bill Clinton's Chief of Staff from 1998 until 2001. Mr Podesta also owns the Podesta Group with his brother Tony, a major lobbying firm and is the Chair of the Center for American Progress (CAP), a Washington DC-based think tank.
globinfo freexchange
An email by a Business Council* representative to John Podesta was expressing the desire of the group to 'approach' Hillary Clinton.
The email was sent nearly two years before the 2016 presidential election at the time where Jeff Bezos was the newly elected president of the group. Also, according to the email, the group consisted of more than 120 "of the biggest CEO's in the US.", meaning, the elite of the American plutocracy.
According to the email, the group was interested for a speech by Hillary Clinton in their meeting, but also, for some informal contacts of he…

This is the real EU ...

failed evolution
When the European Parliament voted recently to sanction Hungary for neglecting norms on democracy, civil rights and corruption, we wrote:
This is the Union that exhibited some "humanitarian sensitivity" by packing thousands of refugees in Greek islands under inhuman conditions and paid Turkey to keep them in its soil. And now, these hypocrites want to punish Hungary for neglecting norms on democracy, civil rights and corruption!
We were right.
According to a recent article by the NY Times:
There is growing acrimony — and now an investigation — over why the camp [Moria on the Greek island of Lesbos] is so bad when so much money has been provided by the European Union to help improve the Greek asylum system since migration levels started to rise in 2014.
[...]
Aid groups have been warning of a need for expanded facilities for several years, however. For some, the failure to improve the camp and hasten the asylum process suggests neglect on the…

Rapid drop of the recruitment rates may accelerate hyper-automation and privatization of the US army

globinfo freexchange
Younger generations have been 'trained' by the dominant culture to act in more 'pragmatic' terms in the arena of a brutal economic cynicism. As the fight for a place in this system becomes harder and harder, more and more people are being left out of the game. More and more of the them struggle to survive.
Despite these perfect conditions for the US empire components to exploit the growing numbers of the 'brigades of the poor’, not everything went well for the empire.
After 9/11 disaster, the Internet, the WikiLeaks, the alternative sources of information, the whistleblowers and the powerful combination of all these, brought some unprecedented changes. They managed to destroy the deceptive facade of the US deep state narratives, propagated through the corporate media.
With all the big lies, war crimes, war propaganda exposed to great extent, millennials and new generations are not easy targets for "war on terror"-type narratives.
As a con…

In Brazil too we see what has become now neoliberalism's common practice: recruit the far-right to do the dirty job

globinfo freexchange
Boaventura de Sousa Santos, professor of sociology at Coimbra University in Portugal, and a distinguished legal scholar at the University of Wisconsin Madison, spoke with Greg Wilpert of the Real News, about the shocking rise of neofascism in Brazil through presidential candidate, Jair Bolsonaro.
Santos explained:
It’s very well documented that the United States is - through several organizations - really advising, financing Bolsonaro’s campaign. Bannon has said that he had talks with the Bolsonaro’s son and they have particularly advised him in terms of digital strategies. That’s what they are doing. But we know that the Koch brothers have also been helping fund him.
We are in a society in which the class inequalities go together with the racial prejudice. In this society, which in fact for a long time it was very conservative and run by the oligarchies, in the last 15 years, there was a revolution in terms of the social policies - particularly the identity policies.…

Financial crises: a tool for the banking cartels to become more powerful

globinfo freexchange
Ten years after the last financial meltdown, very few spotted and mentioned (even until today) an astonishing admission by the Financial Crisis Inquiry Commission (FCIC).
In the conclusions on chapter 20 of the report, the Commission implies that trillions (with a T) of taxpayer dollars were mobilized to stabilize the system.
Yet, perhaps the most astonishing conclusion that drawn very little attention, lies in the last sentence in which the Commission actually confirms that the financial sector is even more concentrated in the hands of very few powerful institutions:
A series of actions, inactions, and misjudgments left the country with stark and painful alternatives—either risk the total collapse of our financial system or spend trillions of taxpayer dollars to stabilize the system and prevent catastrophic damage to the economy. In the process, the government rescued a number of fi- nancial institutions deemed “too big to fail”—so large and interconnected with oth…