Will the EU bureaucrats really let Cyprus collapse?
If Cyprus banks collapse will they still stay in the Euro? If not will that be the straw that broke the camels back?
It has been said that both the IMF and the ECB would be prepared to let Cyprus's banks collapse and that their preferred method of raising cash would be to steal it from the hardworking savers of the island, seems the Euro wasn't a good idea after all.
I think the banking system world wide has become so volatile over the last 10-12 years that nobody truly knows how to control it anymore. All these expert economists they trot out to give analyses and what not - it's all spin and statistics!! Not one economist can truly say what has happened. But perhaps that is the mystery we humans love about money! Moving stocks and bonds and gambling with huge sums doesn't help either.
The euro has polarised Europe no doubt. Germany is becoming a danger for the whole of the continent - too aggressive with words and far too indifferent to what the people are expressing. Brussels is the problem though. Too much bureaucracy which is becoming a peudo aristocracy....dictating to soveriegn countries!! Where is democracy?
They say these things come in cycles but I think the Cyprus (and Greece) situations are completely new. How many times do you hear on the news that a whole country or island is going bust? In these times of great affluence and global financial activity!!! Unprecedented.
But in a free market situation, with one currency, and a messed up greedy banking sector, what sort of outcome are we expecting? The smaller less efficient countries will suffer....but the EU needs a contingency plan for situations like this. It needs a troubleshooter, a group of specialists....and it needs a huge emergency funding mechanism. The southern countries need help.
Perhaps Russia will pump a few more billion euros into Cyprus to help save their multi millionaires who enjoy tax breaks on that little Paradise island!!
It is time the left felt the pain of their actions, socialism is failure,can never be proven to help or fix a country. Similiar things will come across the table in America before long. Americans will be asked to fix New York and California, We have answered to these idiot socialist types for too long with nothing but detriment to the people who have to support them. Let them fail, let them rebuild with common sense............bailouts will only continue the pain.
Actually, both New York and California have fixed their budget woes without asking for a federal bailout. Jerry Brown's plan to raise taxes may have been controversial but it passed in a statewide vote and has shored up Cali for now.
What else is new? Tactics are visable ...history repeats itself If that happens and no aid is given to banks, why stay? Unless they are big enough to write it off and rebuild..or bankrupt and rename themselves. Great Question!
Interesting question. Would have made a good leader in The Times or a similar newspaper!
I am at a loss to understand the financial and economic arrangements of the Eurozone (but then, I live in the UK!)
The amount of money that has been pumped into the various failing economies of smaller, European economies baffles me. It seems that there is a vicious cycle whereby billions are loaned to European economies, on the pretext that those economies will meet certain financial and economic targets. They then fail to meet those budgetary targets, so more money is loaned to them, on the understanding that they meet yet more targets, which they fail to meet (again) and so on . . .
This approach is pulling Europe apart and instilling the level of mistrust and scepticism seen here in the UK. The European leaders seem to continually be pouring good money after bad and lurch from one economic failure to another.
The only winners seem to be the Germans, whose power, influence and control seems to grow, as the European economic situation worsens. It seems ironic that, as the country defeated and ruined in 2 world wars, they should be the ones to emerge in the strongest position!
In my view, any pie that has the French and Italian fingers in it is doomed to failure and that includes the European policies on political reform, economic policy and trade policy. The whole Eurozone situation simply seems to be an attempt, by Germany, Italy & France, to manipulate the member states of the EU into a situation where they become one state, one economy and one set of laws and gain, in peacetime, what they never could achieve through their failed military attempts over the last few centuries.
So, no, I do not think the bureaucrats will allow Cyprus to collapse. That would not be in their agenda of building a super state and blindly lusting after power.
When I first heard about the Cyprus banking mess, I thought the EU would easily let the Cyprus banks collapse. But I looked into it, and despite being a small island country that is just 0.5% of the Eurozone economy, Cyprus' banks have a big percentage of European deposits. Therefore, the ECB may actually step in and bail out the Cyprus banks in some way to mitigate their collapse, so as not to cause systemic banking problems throughout Europe.
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