The Cyprus setback

Here we are, once again, facing the overheated financial markets. Ready to debate for days or weeks about a new economic crisis and all the perils for a new crash in the world economy. For what? Cyprus, no less.

A small island with a GDP of 24 billions USD. Less than a million of citizens. Safe heaven for money laundering and well-known for its policy of  “don’t ask, don’t tell” about capitals. It’s true, they’re bankrupting and another hard plan of recovery has been prepared to the rescue. Ten billion Euro ready to be deployed to save the national administration.


In the last five years BCE and IMF erogated hundreds (if not thousands) of billions Euro to save or sustain national economies and/or european-based banks “too big to fall“. Why all the fuss about ten billions Euro? What kind of danger poses a small economy like Cyprus? It looks like smoke and mirrors once again, noise good for the media.

European finance advisors put up their hard face, dictate another batch of memorandums about where to cut in the welfare and in all areas of public expenditure. A massive drag from the bank accounts will be made (in Italy we remember quite well this kind of tax, it has been done in the ’90s) and, once again, a massive output of capitals already leaved the island, well before the drag. The bill is set on the 99%, never on the 1%.

We will have another week of bad news from the rating agencies, more or less the same from BCE, IMF and WB. As I’ve written before, it’s all smoke and mirrors. The real problem is how to get out of the crisis, how to restart the engine of an economic model that’s working no more. Remember the riots in the Eastern Europe, all the demonstrations in Portugal, Greece and Spain. Under the pressure of unemployment and the fears for a major breakdown, even the most pacific people are on a warpath.

Where are the plans for a better tomorrow? When we will see the likes of Angela Merkel and David Cameron explain the road for an economic improvement?

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