Cyprus: When law and order prescribe theft

Enjoy the “solution” while you can.

Who will shoulder the pain from the Cyprus bailout deal?

The first-order sufferers will be small businessmen (mostly Russian) and upper-middle Cypriots and foreign residents with their money in Cypriot banks.  But the whole region will take a longer-term blow from the loss of Cyprus as a place for upstart businesses to park capital.  Capital that can’t be parked cheaply in the EU won’t be invested in the EU – at least not by the smaller, less financially “connected” entrepreneurs who drive economic dynamism and growth.

The big Russian firms that bank with the Russian Commercial Bank in Cyprus have protection in the deal, Continue reading “Cyprus: When law and order prescribe theft”

Cyprus: The EU, out of ideas

Need some old-fashioned statesmanship here.

The Pax Americana continues to disintegrate, and the crack-up continues to circle around the “Great Crossroads,” the junction of Asia, Europe, and Africa where everything affects everything else.  The latest chapter in the saga features Cyprus, where a stand-off between the EU and German voters has closed banks and ATMs to Cypriots, who would like to withdraw their cash before it is subjected to a 6.75% or 9.9% confiscation.  The Cypriot parliament voted on Tuesday against accepting the EU/IMF deal to restructure the nation’s debt.

The issues are (a) that Cyprus needs a bailout (due to catastrophic bank losses through financial exposure in the Greece bailout); (b) the German taxpayer is not enamored of paying for yet another bailout for an EU basket case; and (c) Continue reading “Cyprus: The EU, out of ideas”