This will be the last post of this year and my choice is to dedicate it to the Greeks. Yes, to the people of a country that has been almost destroyed in the last years for economic reasons, for the people who has seen everything change for the worst and left behind to pay errors committed in many places out its boundaries. It’s a tiny nation, with less than eleven millions people who found themselves deep down a national debt like never before.
At the very last moment a plan has been approved in order to save Cyprus from bankrupcy. Why am I not surprised? A few days ago I write another about this situation, the basic idea was to stigmatize that ten billion Euro are small money if we consider the hundreds of billions (or maybe the thousands) Euro already used to save other countries and/or their major banks.
Cyprus is not the real problem about Eurozone, nor it’s the worst place to consider when it comes to bad finance all aroud Europe. What is Cyprus today? A symbol. It’s a slap in the face of russian oligarchs, who used for years this small island to practice money laundering on a massive scale. It’s a slap in the face of a number of financial operators who used the fiscal laws of Cyprus to pay the lowest tax cut possible in Europe. It’s a warning, a strong one, to Malta (and thru Malta to the UK).
What Cyprus is today it’s a warning to all of us european citizens. The decision to drag a percentile of bank deposits, no matter how much, it’s not only a financial measure made by a scared government but the demonstration that under the combinate pressure of ECB, IMF and WB there are very few chances to escape their decisions. In Italy we already experienced such a fate, back in the ’90s. In order to get enough money to pay the interests on our national debt the government got a small cut, 6 part on one thousand, from every bank account.
So, what about tomorrow? What France will do later this year when the pressure of foreign investors will try to crush its economy? What Slovenia will do next month to lift the pressure of a compromised economy?
Last Sunday, March 2nd, AP reported of massive demonstrations held in Portugal. The basic matter is about economics, to go against the government decision to cut national budget in order to meet the objectives set up by the “Troika” (EU, IMF, WB) to resolve all the issues about debt and refinancing.
This time the combined number of protesteers reach the one million level. It’s always a big number but became pretty impressive when you think that Portugal got a total population size about 10.6 millions. It means that one on ten has been on the streets, demanding a stop to austerity measures.
Like many other countries in Europe, Portugal is facing a growing number of unemployed, a shrinking welfare state and an economy in deep recession. In 2011 the national government stipulate a number of agreements to get an huge bailout (more than 100 USD billions). With a negative cycle in all the main economy sectors the only way to reach the planned steps (for the current government) is to cut national budget.
Four years of recession and the perspective to have at least one more is too much for the portoguese population. Political situation is hot to say the least and the pressure from the streets is becoming too high to stand for the national authorities. So it’s time to say “no”, to put an end to an agreement too heavy for this little country.
The recent examples set by Iceland, that recovers its own financial crisis by a plain refusal to pay its debt to foreing private banks (about 5 euro billions) and from Argentina, that force a massive reconsideration of its national debt in the face of IMF and WB, could drive countries like Portugal and Greece to find a strong way out the Eurozone with unexplored consequencies. Are we ready for such a scenario?
You may find an article by Iain Sullivan /AP here