The Troika (the European Commission, the
ECB and the IMF) have made a sweeping power grab in Cyprus. In exchange for a paltry bailout, Cyprus gave
up its rights not only to negotiate its own affairs but to have free flow of
capital.
Some of the capital controls imposed:
- Electronic transfer of funds from Cyprus
to other countries is prohibited
- An individual cannot take more than 3000
euros in cash outside the country
- Credit and debit withdrawals are limited
to 5000 euros a month
- Banks will not cash checks; they will only
accept deposits
- Bank clients will not be able to
withdraw from fixed-term deposits before their maturity
The ECB did its part. It sent an airplane filled with 1.5 billion
euros in a cargo container made of gold (only kidding about the gold—can’t let
the Cypriots get ahead of themselves).
It’s estimated despite these “controls”
some 10% of Cyprus’s 64 billion euros on deposit will be withdrawn today when
the banks reopen.
The question I have is: how does this
power/money grab improve the Cyprus situation?
Oh, that’s right. It doesn’t. Isn’t the point simply to put Troika managers
in charge of all the Eurozone nation-states?
Thousands of employees will lose their
jobs at Laiki Bank, the country’s 2nd largest bank. Businesses have not been able to pay their
employees. In a country dependent on
imports, importers haven’t been able to pay their bills, raising the spectre of
shortages and higher prices.
Under European Union treaties,
restricting the free movement of capital is forbidden. Critics say that what is happening in Cyprus
shows that union rules will be flouted when the IMF (International Monetary
Fund, the ECB (European Central Bank) and the EU (European Union)-THE TROIKA—leaders
find it convenient to do so.
There is no need to fight bloody wars
for treasure. These are bloodless
coups. Where will it end?
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