In response to a post by ‘view from Asia’
Nations aren’t equal. They have certain equal rights under international law. But equal rights doesn’t make my 80 year old mother just as strong as a weight lifting champion. An Vatican city with a population of 800 isn’t equal to China with a population 1,7 million times larger.
As for giving money away to Cyprus and other Eurozone states: of course creditor nations aren’t giving 10 billion euros to Cyprus. Nobody is suggesting they are. What they are asked to do is refinance the debt. And what they do is assume the risk without collateral. And what they will have to do is write off some of that debt (in effect giving it away) because many in the Eurozone know that some of these indebted countries, especially Greece, will never be able to pay off their huge mountain of debt.
And as for Cyprus being otherwise inequal in a sovereign fashion: Cyprus dramatically and irresponsively exposed itself to risk. Despite the many warnings issued since the fall of Lehman Brothers the Cypriot banking sector continued to inflate, the Cypriot state continued to spend money it didn’t have, having an average 6% deficit over the last 4 years. Banks continued to offer higher interest rates to attract money that was then invested in high risk ventures. E.g. Cypriot banks bought up extremely risky Greek portfolios that other banks were shedding as if they carried the plague. See http://online.wsj.com/article/SB10001424127887323501004578386762342123182.html The Cypriot government in 2011 lost access to the financial markets, ringing alarm bells allover the Eurozone except in Nicosia. We’re not talking about behaviour pre-2008 but about the last 5 years during which Cyprus was run in a way that looks like a big ponzi scheme.
And to deflect attention from their own massive failings, the powers that be on Cyprus point their fingers at me and others in the north who come to their aid to save them because their badly derailed strategies threaten the stability of the whole Eurozone.
The bizarre audacity. Is that the behavior of a responsible sovereign equal to Germany?
To add insult to injury many in Cyprus seem to buy into the madness. But what choice do they really have, believe German Nazi vampires from hell are sucking the life out of their country or that the cabal that ruled them really was so negligent and incompetent? It takes guts to believe the latter and accept the political consequences.