Cyprus has called the EU’s bluff.
The ECB had said if Cyprus did not agree to the seizing of depositors’ money to bail out the banks it would not continue to support Cyprus’ banks which would in all likelihood mean the largest bank, Bank of Cyprus, would run out of money as early as the end of the week. The bank would collapse and …
Of course the threat was implicit that this would be disaster for Cyprus but entirely containable for Europe. But now that the Cypriot parliament has rejected the EU collective punishment of seizing depositors’ money I suspect the threat looks a little less spiffy in Brussels and Berlin.
I suspect a few European banks and nations might be checking just how many Cypriot and Cypriot bank bonds they still hold. As might a few EFSF bureaucrats.
Of course some sort of Euro fudge will most likely be squeezed from some Euro orifice and be pushed into the self inflicted wound but the damage has already been done. The EU has managed to make it quite clear to every European that the ‘technocrats’ are quite willing to seize people’s money whenever they think it ‘best’. Best for whom of course is another question.
They have made it clear there is no law that restrains them. Technocrats rule. Not govern, rule.
So I just wondered, now that we are in the famous ‘uncharted territory’ that the EUstapo are always threatening us with, what more could Cyprus do to wrong foot the Troika?
Please understand this is pure after-dinner speculation and not based on any knowledge. I was just thinking what I might do if I were in their shoes.
I think since the EUstapo is playing rough if I were the President of Cyprus I would be talking to my friends the Russians. And guess what? The Cypriot Finance Minister is alleged to be on his way to Moscow!
What would I be going there to talk about if I were in his shoes? I think I would be talking to them about what they would pay in return for offering them a long lease on port facilities in Limassol. I would ask if Russia could see some advantage to having a 50 year lease on a military base for a new Mediterranean fleet in Cyprus?Especially in combination with the other thing I would talk to them about – which is Gas exploration and pipelines.
The Cyprus gas field, Aphrodite, has been causing great ill-feeling with Turkey for a while. How, I might wonder, would Russia like the Russian company Novatek, which is already negotiating for access to the field, to be granted a far larger even dominant interest in preference to rival European companies? I would think to myself I don’t need to sign anything yet, I just have to let it be known in Europe that I regarded it as ‘neither ruled in nor out’. Let them wonder about what that would do to the nasty power game already being played out around the gas fields off the coast of Gaza which Israel is already trying to claim as its own or at least assert control over. As well as Turkish claims and of course the vexed problems of pipelines running through Syria.
Imagine if the West manages to over-throw the Russia friendly regime in Syria and get European hands on any pipeline only to find Russia back in the region via Cyprus?
Given that Russia has a lot of dirty financial laundry already in Cyprus and a lot of tax avoided billions possibly still at risk there (unless it was spirited away before the bank freeze- you never can tell) might I interest my Russian friends in saving their billions from being seized by European banks, and get to buy themselves a lovely thorn in Europe’s side for the price of a bail out?
Oh the mischief! Oh the delight in watching the EUstapo blanch at the very thought.