The huddled masses yearning to breathe free in the EU drown by the boatload in the Mediterranean. They languish in detention centers in Greece and elsewhere. They’re maligned, hounded, sometimes killed. But it’s getting cheaper and easier for the rich.
Entries in Europe - Cyprus (22)
Quiet … EMPTY … If you want to make a deal opening a shop of some sort, you can pick and choose amongst prime locations. The time is now, if that is your inclination, and if you have the financial staying power, or a concept for selling things people can’t do without, something cheap! Every second shop, ah OK, maybe every third or fourth, is closing down.
Austria would fight to maintain bank secrecy, declared uppity Finance Minster Maria Fekter. She is worried. After squashing Cyprus, gutting its offshore financial and money laundering center, and destroying its main resource, the EU has now trained its big guns on Austria and Luxembourg.
The average Cypriot household had a phenomenal net worth of €670,900 in 2010 – over three times that of German households. That wealth had been sucked out of the cesspool of corruption that the banks and the government were, until neither had a drop of lifeblood left. Now the party is over. And you can almost hear the snickering among European politicians.
Eurozone countries are falling like dominos. Next: Slovenia. But bailouts – by taxpayers in other countries – keep banks from collapsing, governments from defaulting, and investors from incurring well-deserved losses. In the US, President Obama’s budget, with its new taxes, is causing heart palpitations left and right. But how do countries really stack up?
In March, the ECB-organized Eurozone-wide household-wealth survey results trickled out. But when the Bundesbank refused to publish the German data, insiders leaked the reason: too explosive for the bailout era because Italian households were far wealthier than German households. Shocking! And a red herring. The truth turned out to be far more shocking.
Everyone learned a lesson from the “bail-in” of Cypriot banks: Russians who’d laundered their money there; bondholders who’d thought they’d always get bailed out; Cypriot politicians whose names showed up on lists of loans that had been forgiven; even Finance Minister Sarris. His lesson: when a cesspool of corruption blows up, no one is safe. And German politicians learned a lesson too: that it worked!
Cyprus didn’t prick the Eurozone bailout bubble, the notion that bank investors who took enormous risks to gain financial rewards would always be made whole by taxpayers. That bubble had already been pricked in February. But it was the first time that the international bailout cabal, the Troika, stuck its needle into it—while Germany quietly bailed out all investors in one of its own rotten banks.
Contributed by Valentin Mândrăşescu, Editor of Reality Check @ The Voice of Russia. The mainstream media usually presents a very unbalanced view on the events in which Russian interests are involved. The “Cypriot bailout” is no exception. These messages are wrong, and they miss the most interesting part of the story. I can tell that in Moscow there are many people who are jubilating right now. Their wildest dreams have come true.
Bank bailouts have made owners of otherwise worthless bank debt whole through a circuitous process by which taxpayers transferred their money to investors. Even in Greece. Even a bank that had siphoned off $1 billion through fraud and embezzlement. It wasn’t fair. But fairness had nothing to do with it. That’s how bailouts were done. Until now.
Russia’s booming underground economy with its dizzying flows of illicit oil money is at the core of an 84-page report by Global Financial Integrity. It advises the Russian government on how to tackle this problem. But buried deep inside is a gem: the flows and amounts of Russian “black money” into and out of Cyprus.
LEAKED: Mario Draghi And His Triumvirate Shut Up German Finance Minister To Keep Cyprus From Blowing Up The Eurozone
The state-sponsored chorus about the end of the debt crisis is deafening. It even has feel-good metrics: the “Euro Breakup Index” fell to 17.2%. In July, it stood at 73%. For Cyprus, fifth country to ask for a bailout, it fell to 7.5%. “A euro breakup is no issue anymore,” the statement says. Just then, top Eurocrats expose what a con game they think these bailouts really are.
German Bailout Chancellor Merkel, who is trying to avoid any tumult ahead of the elections, has a new headache: Cyprus might default and exit the Eurozone. Using taxpayer money to bail out the corrupt Greek elite or stockholders, bondholders, and counterparties of banks, or even privileged speculators, is one thing, but bailing out Russian “black money” is, politically at least, quite another.
“Private sector” is a rubbery term. Most of the bondholders that lost their shirts during the first Greek default last March, and during the second one currently underway, were banks, including banks in Greece, Spain, and Cyprus. They are now getting bailed out by the public. After nearly all of Greece’s debt was shifted to the public, a third haircut was announced. Now Portugal wants the same deal. The can has been opened.
Timing couldn’t have been worse. Or more opportune. A “secret” report by the German version of the CIA, the Bundesnachrichtendienst, bubbled to the surface, asserting that the bailout of Cyprus would use money from taxpayers in other countries to bail out mostly rich Russians who have over the years deposited their “black money” in Cypriot banks that are now collapsing.
Cypriot President Christofias dug in his heels. On Greek TV. Not behind closed doors with the Troika, the austerity gang from the European Commission, the IMF, and the ECB that have performed such miracles in Greece. But as Cyprus veers toward bankruptcy, his game of playing the Russians against the Troika has fallen apart, banks are in worse condition than imagined, and the bailout amounts jumped again.
The Republic of Cyprus, with its 840,000 people, has been in the Eurozone for less than five years. It and its banks burned through mountains of euros faster than anyone could count. Now they need a bailout whose magnitude balloons every time someone blinks. Yet, Cyprus has something other Eurozone debt-sinners don’t have: Russian money flowing back to Russia!
In June, Cyprus had held its nose and requested aid from the Troika, those despised austerity thugs made up of the European Union, the European Central Bank, and International Monetary Fund that have wreaked so much havoc in Greece. This week, these despised Troika inspectors are swarming again over Cyprus. And each time they do, the numbers balloon. How can such a small country blow through so much money? Well....
In Cyprus, it’s panic time. €1.8 billion is needed by June 30. That’s just the beginning. Its banks have been eviscerated by Greek government bonds, Greek corporate debt, a real estate bubble that collapsed, and a title-deed scandal that they colluded in. It has a communist president and vast deposits of natural gas. Russia and China hover nearby. And it points out, unwittingly, why no country should ever do what the EU Summit will focus on: transfer even more sovereignty to the EU.
In Greece’s chaotic wake bobs the listing Republic of Cyprus, soon to be the fifth Eurozone country, out of seventeen, to get a bailout. By June 30. Only last year’s €2.5 billion loan from Russia has kept it afloat. It’s economy is shrinking, unemployment is at a record, and real estate is collapsing after a phenomenal bubble and a nationwide title-deed scandal that has taken down the banks. But Cyprus has something—and it’s huge—that no other troubled Eurozone country has.