The Cyprus government has extended the bank closure until next Tuesday, suggesting that the bailout plan proposed by the president is running into really heavy weather. The European Central Bank has apparently given the government a deadline until Monday to accept the deal or go bankrupt, so you can expect the Cypriot parliament to come under great pressure during the next few days.
Since people need money for everyday life, ATM machines are apparently being replenished. I am not sure how the broader electronic banking sector is operating. For example, I hardly ever use cash anymore and so rarely withdraw money. My salary goes directly to my bank account, I pay for almost everything with a credit card, and then pay the card bill by electronically transferring money from my bank account to the credit card company. I am not sure if such electronic transfers are still possible when the banks are closed because that would mean that better off people who can do such things will be hardly affected by the closure while those who primarily work in the cash economy will be harder hit. For example, we have the bizarre spectacle of the UK government sending a military planeload of cash ($1.3 million) to its troops in that country.
There was some strong disagreement with my earlier posts on this topic (see here and here) that had condemned the proposal by the Cypriot president to garnish some of the savings of ordinary Cypriots as part of a deal to get bailout funds from the European Central Bank in order to repay the large hedge funds in full, saying that it was unfair for Dutch and German taxpayers to foot the bill for the profligate ways of the Cypriots.
These comments show precisely how the global financial oligarchy works. Ordinary Cypriots, like ordinary citizens in the Netherlands and Germany and anywhere else, had little or no say in how their governments and banks operate. They just go about their lives, working and putting some money away in savings. But governments and big banks set policies that favor the global financial oligarchy and enable them to send vast amounts of money rapidly around the globe in order to get high returns, by lending to governments through the banks.
But when things go sour and governments cannot repay, what they do is pit ordinary people of the donor countries against the ordinary people of the recipient countries in their efforts to make sure that the oligarchy in untouched. By causing people to think that ‘hardworking’ Dutch and Germans are subsidizing ‘lazy’ Greeks and Spaniards and Cypriots, and throwing in ‘greedy’ Russians into the mix, they manage to obscure the fact that they are all getting exploited because the allegiance of all their governments is to the big banks, and that the global oligarchy is really calling the shots through its puppets in the IMF and the ECB.
Once sees this over and over again in other contexts. In the US we see how the oligarchy pits Chinese or Mexican workers against American workers, making them see each other as the enemy and fight with each other, when the real winners, all the time, are the global oligarchy, while the real losers, all the time, are the workers in each country.
If we cannot see through that charade and unite against it, we will continue to be the losers.
By causing people to think that ‘hardworking’ Dutch and Germans are subsidizing ‘lazy’ Greeks and Spaniards and Cypriots, and throwing in ‘greedy’ Russians into the mix, they manage to obscure the fact that they are all getting exploited because the allegiance of all their governments is to the big banks, and that the global oligarchy is really calling the shots through its puppets in the IMF and the ECB.
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True but one could still argue that the Cypriot or Greet public sector is corrupt and bloated in comparison to the Dutch and Germans. Why can’t both statements be true?: that there is an exploitative system in place that oppresses ordinary people and that in some countries, the government has overspent.
The ECB needs some control from the European Parliament, and the EP needs 1) a lot more power and 2) to be staffed by EU-wide elections (not 27 nationwide elections that happen to be held at the same time).
No idea about Cyprus, but Greece has two well-known problems: 1) massive tax evasion by the rich; 2) insanely high military spending, reportedly 5 % of the GDP. Greece has lots and lots of tanks that couldn’t even be used in that mountaineous country or for that matter its equally mountaineous neighbors!
From what I read in a piece by Michael Lewis, Greece doesn’t just have massive tax evasion by the rich, it has massive tax evasion by virtually everyone.
Here we have one of the members of the oligarchy:
http://en.wikipedia.org/wiki/Jeroen_Dijsselbloem
He helped making the deal.
Oh wait, he is a member of the Labour Party and had no problem at all nationalizing one of the biggest banks in The Netherlands. But informed as MS is on this subject, better than the deluded Dutchman I am, he probably has a perfect explanation for Dijsselbloem’s turn. Probably bribed by one of the faceless, nameless demons who form the oligarchy or something.
“The European Central Bank has apparently given the government a deadline”
Wrong in two ways.
1) The deadline is not about the deal, it’s about Cyprus finding a way to find the 5,8 billion Euro which must complement the 10 Euro the country will receive.
2) Not the ECB decides this, but the trojka of IMF, ECB and above all the counsel of European Ministers of Finance. The trojka doesn’t give a d**n how Cyprus will find this money; Russia might help for instance (but won’t as far as my info goes now).
“the proposal by the Cypriot president to garnish some of the savings of ordinary Cypriots”
Wrong again. That proposal came from said Trojka. Only yesterday I gave a link which showed that this Trojka was very willing to spare accounts up to 20 000 Euro. You ignore this and by now I assume you do because it doesn’t fit in your simple scheme.
“what they do is pit ordinary people of the donor countries against the ordinary people of the recipient countries”
Wrong again. They don’t have to. Do a poll in the donor countries and you will learn that a majority doesn’t want to give Cyprus money at all. You might remember that the Dutch voters rejected the European constitution several years ago; this is one of the reasons. The two most important Dutch politicians who oppose the plan -- and EU in general -- are extremely right wing islamophobe Geert Wilders and old-fashioned socialist Emil Roemers. The latter is the leader of the SP, the Socialist Party.
Finally one disclaimer: the whole plan doesn’t make me enthusiastic. Indeed one way or another the ordinary citizen will suffer. But criticizing a plan on this point without providing something better, while neglecting unconvenient facts won’t help either. I’m not defending the plan; I’m criticizing your superficiality.
And now I’m done with it. Fighting against simple schemes which contain elements of conspiracy theories is a waste of time. I am going to read your series on the higgs-boson. Then I’m sure no relevant facts will be ignored.