Wednesday, March 20, 2013

CYPRUS - Victory for Cyprus? - Catastrophe for the Troika

CYPRUS - Victory for Cyprus? - Catastrophe for the Troika

However one looks at it, the recent events in Cyprus are an unmitigated catastrophe for the Troika, and potentially a resounding victory for Cyprus and Russia.

The fact that there was abstention from the ruling party, and a no vote to the rapacious, not to mention illegal proposals of the Troika, does actually show that there are limits to the exploitation both citizens and politicians will take at the hands of their abusers.

The Cyprus finance minister is now in Moscow discussing a solution with Putin and thanks to the behaviour of the Troika, the Moscow-Cyprus axis interests have been almost perfectly aligned. Putin wants a safe offshore financial haven and would be only too delighted to assist Cyprus in developing their very substantial offshore gas reserves, perhaps have a naval base in the Mediterranean, and last but by no means least he must be as mad as hell at the IMF; EU and ECB for threatening Russia and his cronies personal interests.

Imagine that huge amounts of Russian and ex CIS offshore money will have been blocked for almost a week where no-one can even use a credit card or withdraw cash. Vengeance is a dish best eaten cold and the KGB have long memories.

Russia, will certainly see strong attraction in assisting a quasi bankrupt  EU and US orphaned client state, which has been cast out in the cold, to serve  the Troika's ruthless self interest, and  Gazprom has already proposed  financial aid in exchange for security over future Gas production.

By doing so, they have leapfrogged the usual US Fortune 100 companies, which descend like vultures on the same private jets as the IMF, and US investment bankers, to asset strip distressed economies. The Washington business elite must be absolutely furious with Christine Lagarde, that their fiefdoms have been desecrated.

So alarmed are the Troika at developments that Merkel is attempting to tell a sovereign nation not to enter into a dialogue with Russia and only speak to the Troika. Is this imperial arrogance, or it it just someone running scared?

If an agreement is reached with Moscow,  Cyprus would be well advised to default on all or a large part of their their debt and simply say to the IMF, having just escaped, we have no desire to be caught in the Western powers spider's web ever again.

The other aspect, mentioned in earlier posts is that the Troika have taken their mask off to reveal their true character and the fact that they will stop at nothing to keep the Euro prison together, including stealing money directly from private accounts. What is more all the citizens have seen and understood this reality,and happily not only in Cyprus but throughout the Eurozone.

This has every chance of ensuring a massive flight of capital from PIIGS countries and bank runs not seen since Northern Rock in the UK.

The Troika has completely botched the situation, and with such a complete and utter breach of trust, it is extremely difficult to see how they can go back, unless they acquiesce in all the conditions of the Cyprus government. Cyprus  however may be so traumatised by the experience that they would prefer to do a deal with Russia, than to do a deal with the devil.

Time alone will tell how this will unfold, but it seems the Rubicon has been crossed in the War between the honest citizen, and the financial and political elites.

Unfortunately, if the social contract between the elites and the governed is broken, the citizens have only one choice and that is to revolt.


  1. This presentation by Bank of Cyprus shows some of the potential of their business model. The timing and manner of this entire crisis suggests to me that there was something much bigger going on behind the scene.

    As a Swiss I fear that in this raging currency war that some party for some reason decided that Cyprus had to go down as a financial center. My concern is that ultimately Switzerland may be their next target.

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