Resist this cross-border bullying of Cyprus

The real issue here is the moral behaviour of large nations towards smaller ones

Share
Related Topics

When the island of Melos did not pay its taxes to the government of Athens, a fleet was sent to destroy it as a punishment and to set an example to the other island vassal states. The same punishment is now being meted out to the Greek island of Cyprus.

The German government of Chancellor Angela Markel has used the Troika of financial institutions to punish Cyprus and deter other Eurozone countries from coming to it for a bail-out for their banks. This hardline approach serves the political purposes of Merkel’s Christian Democratic Union party which faces a general election in September. Having participated in bailouts of Portuguese and Irish banks, the crushing of Cyprus disabuses claims that her government is careless with taxpayers money.

Adding insult to injury, the island is reminded that it has given shelter to the money of Russians who, we are told, are invariably money launderers. Cypriots then ask for the evidence. The reports of two sets of investigators, one from the European Commission itself and one commissioned by the Government of Cyprus show relatively well-run and regulated banks. The government does not deny that Russians have put their money into Cyprus to benefit from its double taxation treaties. They say the European banks will be the only beneficiaries of this slur, if Russians remove their money from Cyprus and transfer it to Germany.

Cyprus mean time feel bitter and chided. Its President recently wrote a letter to the Troika of the IMF,  The European Central Bank and the European Commission, in plaintiff terms.  Nikos Ananstasiades wrote, ‘It is my humble submission that the bail-in was implemented without careful preparation’. He said the bail-in plan was ill thought-through, that the Cypriot economy was contracting dangerously as a result of capital controls and that the closure of the country’s second bank had left the banking system tottering,  not strengthened.

The pain is tangible. It is hitting the Cypriots in their pockets. This small country which has a population of just over a million and a GDP of some Euro 17 billion is looking at a contraction in its GDP over the current year of some 10%. The Eurozone partners have little reason to be worried of course; Cyprus accounts for less than half-one-per cent of the GDP of the Eurozone’s GDP.

The small shop-owners, the taxi drivers, the bread and cake makers and other small businessmen that make up this ‘club-med’ economy are reeling.  Many have lost money in the bail-in, that requires them to cede bank deposits that exceed Euro 100,000 held in the Bank of Cyprus and Bank Laiki.

They want, almost to a man and woman, to leave the Eurozone. The President’s letter to the Troika indicates that the pressure is beginning to tell. The departure of Cyprus from the Eurozone would not have a direct affect on the wider economy although  the risk of contagion remains.

The bigger issue is the moral behaviour of large nations towards smaller ones. The departure of Cyprus from the Eurozone set a lamentable precedent of cross-border bullying we should all resist.

React Now

Latest stories from i100
Have you tried new the Independent Digital Edition apps?
iJobs Job Widget
iJobs General

SQL Report Analyst (SSRS, CA, SQL 2012)

£30000 - £38500 Per Annum + 25 days holiday, pension, subsidised restaurant: C...

Application Support Analyst (SQL, Incident Management, SLAs)

£34000 - £37000 Per Annum + excellent benefits: Clearwater People Solutions Lt...

Embedded Software / Firmware Engineer

£40000 - £45000 per annum + Pension, Holiday, Flexi-time: Progressive Recruitm...

Developer - WinForms, C#

£280 - £320 per day: Progressive Recruitment: C#, WinForms, Desktop Developmen...

Day In a Page

Read Next
Russian President Vladimir Putin 'hits his foes where it hurts'  

Dominic Raab: If Western politicians’ vested interests protect Putin, take punishment out of their hands

Dominic Raab
Monday - Israel  

Between the wars in Israel, spending time in a kibbutz was about as cool as you could get

Peter Popham
Screwing your way to the top? Good for Lana Del Rey for helping kill that myth

Screwing your way to the top?

Good for Lana Del Rey for helping kill that myth, says Grace Dent
Will the young Britons fighting in Syria be allowed to return home and resume their lives?

Will Britons fighting in Syria be able to resume their lives?

Tony Blair's Terrorism Act 2006 has made it an offence to take part in military action abroad with a "political, ideological, religious or racial motive"
Beyoncé poses as Rosie the Riveter, the wartime poster girl who became a feminist pin-up

Beyoncé poses as Rosie the Riveter

The wartime poster girl became the ultimate American symbol of female empowerment
The quest to find the perfect pair of earphones: Are custom, 3D printed earbuds the solution?

The quest to find the perfect pair of earphones

Earphones don't fit properly, offer mediocre audio quality and can even be painful. So the quest to design the perfect pair is music to Seth Stevenson's ears
US Army's shooting star: Lt-Col Steven Cole is the man Hollywood calls when it wants to borrow a tank or check a military uniform

Meet the US Army's shooting star

Lt-Col Steven Cole is the man Hollywood calls when it wants to borrow a tank or check a military uniform
Climate change threatens to make the antarctic fur seal extinct

Take a good look while you can

How climate change could wipe out this seal
Should emergency hospital weddings be made easier for the terminally ill?

Farewell, my lovely

Should emergency hospital weddings be made easier?
Man Booker Prize 2014 longlist: Crowdfunded novel nominated for first time

Crowdfunded novel nominated for Booker Prize

Paul Kingsnorth's 'The Wake' is in contention for the prestigious award
Vladimir Putin employs a full-time food taster to ensure his meals aren't poisoned

Vladimir Putin employs a full-time food taster

John Walsh salutes those brave souls who have, throughout history, put their knives on the line
Tour de France effect brings Hollywood blockbusters to Yorkshire

Tour de France effect brings Hollywood blockbusters to Yorkshire

A $25m thriller starring Sam Worthington to be made in God's Own Country
Will The Minerva Project - the first 'elite' American university to be launched in a century - change the face of higher learning?

Will The Minerva Project change the face of higher learning?

The university has no lecture halls, no debating societies, no sports teams and no fraternities. Instead, the 33 students who have made the cut at Minerva, will travel the world and change the face of higher learning
The 10 best pedicure products

Feet treat: 10 best pedicure products

Bags packed and all prepped for holidays, but feet in a state? Get them flip-flop-ready with our pick of the items for a DIY treatment
Commonwealth Games 2014: Great Scots! Planes and pipers welcome in Glasgow's Games

Commonwealth Games 2014

Great Scots! Planes and pipers welcome in Glasgow's Games
Jack Pitt-Brooke: Manchester City and Patrick Vieira make the right stand on racism

Jack Pitt-Brooke

Manchester City and Patrick Vieira make the right stand on racism
How Terry Newton tragedy made iron men seek help to tackle their psychological demons

How Newton tragedy made iron men seek help to tackle their psychological demons

Over a hundred rugby league players have contacted clinic to deal with mental challenges of game