25 Mar 2013

EU Crisis: Cyprus Bailout; the Long Bank Holiday and the Great Troika Raid.

Monday 18th – Monday 25th March

The European Union project took a massive confidence body blow as the troika (ECB, EU, IMF Austerity Axis), launched a surprise ambush on all private deposit accounts in Cyprus Monday 18th March. The banks remained closed for a very long week as 800,000 Cypriots planned their counter to the attack. Meanwhile the feared ECB (financial quartermaster) in Frankfurt urged the raid to speed up and complete operations before any bank run by foreign Russian clients.

So this was the start of the long bank holiday. Cyprus claimed their man was blackmailed by the troika into accepting the bizarre terms. Bizarre in the fact Brussels president Van Rumpay (one of three) declared some time back the EU would “convince the people” in the merits of fiscal and political union. “Accept our terms or your country will be bankrupt in days,” was the troika’s astounding demand.

Immediately the Cyrus parliament rejected any raid on deposits as Russian money made up the bulk of it. “Dodgy or not here I come, I’m off to Moscow to ask for more Russian money.”  The Cyprus finance minister returned empty handed. It was time to reconvene the parliament.
Senior members of the feared Troika at the Brussels meeting which agreed to
play Russian Roulette with Cyprus. Is it the beginning of "Unfriendly"
relationships with Moscow money. image 2013 
Chancellor Angela Merkel it emerged was officer commanding the raid. She is no longer worried about solidarity and more worried about using German tax revenue to save Russian money. (Don’t forget it is election year).

Find six billion dosh by Monday 25th or we will shut you down was the Troika’s final ultimatum. Or maybe it was her demand. Merkel is becoming more moralistic and behaving more like the true European president than the other three in Brussels. Over the second bank holiday weekend the Cypriot and troika response was to shut down bank no 2 and to inflict heavy losses on the Russian deposits. Moscow described the move as stealing and promised to be just as “Unfriendly.”

All this is very bizarre to the good European, the spectator on the wings, who, struggling with austerity is now checking the bank balance to see if all funds are still in place.
Or is it all that bizarre or surprising. Fiscal and political union between the 17 Eurozone is now a pipe dream and most observers know it. The United Kingdom broke the ultimate taboo by offering a referendum over EU membership. The next taboo is exit from the Euro either by push or goodbye. Once Russian money packs up and moves to another haven, which it will do, then Cyprus is destroyed for a decade at least.

The Eurozone is self-assessing its raison d’etre.  Federalists are hell-bent on forming some kind of block to counter what they see as an emerging globalised economic realignment. A resurgent Germany is preparing for this eventuality and leading the recruiting drive. In the case of southern members, a process of screening out is started. This same screening will turn north after the southern purge is completed. There is nothing personal, it really is just business.