Notes From the Margins…

Cyprus: let the punishment begin!

  • March 28, 2013
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Today the banks of Cyprus will reopen after a 12-day closure that has thrown the island’s population into panic, and Cypriots will finally be able to access their savings and withdraw cash from ATM machines.  Well not all of it, because the new EU/IMF rescue package imposed on the Cypriot government includes a raft of restrictions, such as a limit of 300 euros a day on ATM withdrawals, a ban on cashing cheques and a limit of 1000 euros on the amount of cash that individuals can take out of the country.

The Cypriot government says that these measures will only last for a few weeks, but some economists believe they may be in place for months or years.   All this is part of a ‘bailout’ that is supposedly intended to introduce some probity into a banking system used by foreign millionaires, gangsters and mafiosi, and impose levies on savings of over 100,000 euros.

The new package is supposed to prevent capital flight to avoid these levies – except that  much of that money have already have left the island before the bank closures 12 days ago, according to the German newspaper  Der Spiegel, which reports that:

‘ the central bank head has been harshly criticized due to suspicious capital flight  from Laiki and the Bank of Cyprus, the two institutions that have been hit hardest by the Cypriot banking crisis. There are indications that large sums flowed out of the two banks just before the first bailout package was signed in the early morning hours of March 16. At the end of January, some 40 percent of all savings held in Cypriot accounts were on the books of those two banks. Since then, however, much of it has been transferred elsewhere, despite orders from the central bank that accounts at the two institutions be frozen.’

So how about that?   Wealthy depositors knew they might lose money – presumably because someone in power (the government? the banks? the IMF?) ensured that this information would be passed on in time to let them get their cash out of the country.

Meanwhile Cyprus faces years of economic hardship that will hit ordinary Cypriots and small savers, who have been waiting these last 12 days to hear what fate the high and mighty will decide for them.    But every cloud has a silver lining, and Cypriots will no doubt be pleased to learn that  that G4S have got the contract to provide extra security guards at bank branches ‘to help handle an anticipated surge of customers demanding cash and answers.’

So congratulations to all concerned – the IMF, the EU, the Government of Cyprus, and the directors of the banks  – for an exemplary display of leadership and good governance that may go down in history as a watershed moment in the transformation of the EU from a political union based on the values of solidarity and democracy into  a sleazy authoritarian bankocracy,  based on the essential principle of government of the rich for the rich.


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About Me

I’m a writer, campaigner and journalist.  My latest book is The Savage Frontier: The Pyrenees in History and the Imagination (New Press/Hurst, 2018).  The Infernal Machine is where I write on politics, history, cinema and other things that interest me.

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