‘Cyprus bailout reminiscent of French revolution and Bolsheviks’
The levy on deposits at the Bank of Cyprus is nothing but an expropriation, analyst, John Laughland, told RT, adding that the bailout deal that the EU forced Cyprus to sign will have a “catastrophic” effect on the island’s banking system.
According to the terms of a €10bn bailout agreement Cyprus
struck with the troika of international backers (EU, ECB, IMF) on
Monday night, the savers, who have uninsured deposits of over
€100.000 at the Bank of Cyprus, will lose from 30 to 40 percent of
their savings.
The Island’s second largest financial institution, the Laiki Bank,
will also be closed, all to save Cyprus from bankruptcy and prevent
the country’s exit from the eurozone.
The director of studies at the Paris-based Institute of Democracy
and Cooperation, John Laughland, believes Cyprus was blackmailed to
sign an “unjustified” deal, which puts the safety of
deposits in banks across Europe in question.
RT: Cyprus has ducked bankruptcy by signing a last-ditch
deal, but it now faces deep recession. Did the country have any
other options?
John Laughland: Cyprus is yet another victim of power and
ideology-crazed determination of the European elites to keep the
single currency intact against all the odds. I genuinely think and
I’m not given to exaggeration that Europe today is in a situation
comparable to that of the French revolution or the Bolshevik
revolution. By that I mean the entire class of people, in this case
the so-called rich Russian oligarchs, who apparently have been
laundering their money in Cyprus bank accounts are going to be
expropriated, not taxed, and treated as if they were criminals.
It’s just as in the two revolutions I mentioned aristocrats as a
class were hung on the lampposts because it was decreed that their
property had been criminally obtained. This is a very bad
precedent, because it means that bank deposits, which are private
property, are no longer safe in European banks.
RT: The move to raise bailout money by taking what could
be up to a third of the savings of some depositors, has received a
baffled and outraged reaction. Is the unprecedented motion to tax
deposits really justified?
JL: Absolutely not. It’s in no way justified. The only way
that money could be raised in a justifiable way would be by tax
that is to say by a lawfully approved measure without approved
measure without retroactive effect. This, by contrast, is a bank
robbery. The British papers are right to call it a bank robbery
because the deposits, which are held in Cypriot banks are, of
course, private property. They belong to the people, who have those
bank accounts. And the reason, why Cyprus has been forced and
I mean been forced to adopt this is that on Friday, following the
rejection of the earlier plan, which was substantially very
similar, the European Central Bank did something, which it had no
legal right to do at all. And that was to threaten to cut al
liquidity to Cypriot banks this afternoon today on Monday [March
25] by the end of trading. It has no legal right to do that and it
threatened the Cypriot government that if it didn’t agree to an EU
and IMF plan than this monetary would be imposed... The European
government held the gun to the head of the Cypriot government and
told it that it had to sign an EU deal. I suspect, by the way,
that’s one of the reasons, why the Cypriot finance minister’s visit
Moscow last week ended in failure because the EU told them they
have to sign an EU deal – not the Russian deal.
RT: Could we see such methods be applied in other ailing
European countries in the future? What’s you’re forecast for the
nearest future in Cyprus and the EU?
LJ: I think the people in Cyprus, probably, understand
better than most of us what’s going on. Although the propaganda is
absolutely deafening, particularly, in the German media this
morning about how all the money is held by Russian and how all
these Russians are criminals, who deserve to have their money taken
away. There will ultimately be other people – Cypriots and other
nationals – who also have bank accounts of more than a €100.000.
And if that money is expropriated – stolen as it’s going to be –
then the effect on the Cyprus’s banking system will be absolutely
catastrophic. I don’t just mean in terms of job losses and
recession, but in terms of the basic confidence, which is necessary
for any country to maintain a banking system. And I think there
will also be effect on the banking systems of other vulnerable
‘Club Med’ EU countries. After all, if the European Union can do
this to Cyprus, there’s actually, no reason, why it can’t do it to
Greece, Italy, Spain or any other country, which is in
difficulty.
The statements, views and opinions expressed in this column are solely those of the author and do not necessarily represent those of RT.