The unbearable lightness of the Eurogroup, a mixture of wishful thinking and revenge, led to the catastrophe of a well standing EU Member State, Cyprus. In the past days have happened things that only fantasy could describe and yet, have happened.

Now, no one is sure what will come next. The looting of private money in the Cypriot accounts by Eurogroup decision to take 10% for accounts over €100,000 and 7% for accounts below, after animated debates in Cyprus was modified by the Cypriots to 20% levy on Bank of Cyprus accounts over €100,000 and a 4% levy on similar accounts of other banks.

Accounts below €100,000 are not taxed for simple reasons. Small accounts are owned by ordinary Cypriot citizens and for political reasons the newly elected Cypriot government would never accept such a provision. Furthermore, if accounts with less than €100,000 were looted, depositors would have appealed to the relative EU Directive which supposedly guarantees deposits up to €100,000 and they would have discover that such mechanism exists only in the papers as neither the Eurogroup nor the European Central Bank managed to establish it. It simply is described in the EU Directive but it is only perceptional as in practice it does not exist.

The Eurogroup will have to approve the Cypriot proposals later today as tomorrow, Monday, the European Central Bank threatened to suspend financing to Cypriot bank. This will be the strike against Cyprus if the Eurogroup will not accept the Cypriot proposals.

Yet, this may prove the straw that will break the camel’s back as a growing number of Cypriots, instead of compromising with Eurogroup and channeling the country into permanent misery, consider withdrawing from the Euro returning the Cypriot Pound and fix standard exchange rate, one Cypriot to one British Pound

If this materializes, what will follow and ultimately what will happen to the Euro and the Eurozone is difficult to foresee, as sky is the limit.

However, it is not expected that the new President Nikos Anastasiadis will rise up to the occasion and show he has the guts to do it. Indeed, he is under continuous probation and surveillance of the European People’s Party, which is fully controlled by the German Chancellery.

Yet with the Cypriots you never know

New Europe

 

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