The night after the Cypriot government and the Troika came to an agreement, I finally managed to sleep. Not because the half-finished agreement was a good one, but because knowing is better than not knowing.
This was so until I realized that we still don't know much about what has been agreed -if anything.
The initial plan was to split Cyprus's second biggest bank -Laiki- into a good bank and a bad bank. The good bank, where the loans that are being paid off and accounts of those who have less than 100 000 would go, would be absorbed by the Bank of Cyprus, while the bad bank would eventually disappear. Another part of the plan was to cut the deposits of those with more than 100 000 at the Bank of Cyprus by 30%. Though the percentage was not finalised.
Last night we learned that deposits at the bad bank could be cut at up to 80%, I am guessing to pay off the 9 billion euros Laiki borroed from the European Liquidation Assistance -which incidentally is only allowed to lent money to healthy organisations, which Laiki was not- and in the Bank of Cyprus by 50%.
To be honest I really do not care about Russian money, and since Cyprus's economic model has been destroyed, the latest news are only the nail in its coffin. However, I do care about Cypriot business, big and small that employed thousands. By the latest estimates 9 out of 10 businesses will close and according to Paul Krugman, the GDP is expected to fall by 20%.
Even more modest estimates than these would be enough to ensure that Cyprus will be led to a new bail-out deal within a year. Krugman suggests that Cyprus's best option is to leave the euro and return to the cypriot pound. I am not an economist, but I think that the government should now seriously consider all options and possibilities.
Simultaneously with the mangling of the Cypriot economy great changes are taking place in the geopolitical and energy map of the Eastern Mediterranean as a result of, the expected, Turkish aggression and, the unexpected, Israeli remorseful-ness which is slowly leading to a rapproachment between the two states.
So in the midst of all of this and the, now, increasing levels of anxiety and uncertainty I am feeling I have been trying to put together what it is that Cypriots can know for sure today.
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| Larnaca in better days- after the latest re-development |
The first is that things will get really tough. Jobs will be lost, houses and businesses will be foreclosed and we will not have the luxuries we had before. However, in the absence of things to identify ourselves with, we may be able to finally see who we have become and what matters and potentially manage to tap into the structures of Cypriot society that allowed it to bounce up from the war of 1974 and eventually prosper. These structures lie, today, buried deep under Louis Vuitton bags, iphones, Mercedes, BMWs and big houses staffed with women and men who the majority of Cypriots viewed as servants first and humans second.
Thus, things getting tough, in the long run, may not be a bad thing as long as we rise up and become more human in the process.
The second thing we know for sure is that our politicians are inept. They have for the thousandth time in Cyprus's modern history displayed lack of forethought, sane planning and any vestiges of prudence. I am now afraid that these characteristics will also destroy any chance of future development resulting from Cyprus's natural gas reserves, in the same way that they have, so far, stopped any progress being made in the Cyprus issue.
The third thing is that the previous government and AKEL are the root of this destruction and that the rhetoric being pursued by AKEL today may be the root of an upcoming chaos. It's rhetoric has, as expected but regretfully, been irresponsible and populist and is paving the way for the rise of the extreme right-wing ELAM.
In saying the above, I am not demanding that the previous government or Cypriot MPs be put on trial for the chaos today. Not because I don't want justice, but because I know we will never get it and will spend years and a lot of energy that could be better spend.
The fourth thing we now know for sure is that Greece and Russia are not Cyprus's mother and sister countries respectively. Cyprus is once again paying not only for its mistakes but, it seems, primarily for Greek mistakes that the cut of the Greek government bonds was supposed to ameliorate, costing Cypriot banks 5 billion euros in the process.
Thus, I hope that due to this realization we will not be seeing anymore Greek flags in the streets being waved triumphantly whenever DISY wins an election. The dream of Enosis, I am hoping, will finally die in the imagination of Cypriots along with ideas of solidarity between 'sovereign' states because of ethnic or religious or other affinities.
The fifth thing we should by now know for sure, as Europeans, is that the EU is not a political union driven by solidarity. It has in this process been blatantly revealed to be the vehicle of a new German power grab in the road to hegemony. In the process, it has created a new underclass of dependent peoples and the long-term result of this can only be bleak.
The final thing Cypriots should know for sure is that we can and should make it. We will need to unlearn behaviors that were alien to us in the first place, work together and probably migrate, in the case of the young, to survive. However, none of these things are necessarily tragic, though, they are difficult.
By having each other's back we may be able to survive.
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