Vanishing Cyprus: Poisoned Loans

bad loans

While citizens across the Eurozone are squeezed with crippling austerity measures, today’s 28 million unemployed prove that EU policies have not worked for the greater good of the people. Realistically, employment was never a part of the EU master plan but domination was! Fusing independent nations into a supranational corporation controlled by bureaucracy and governed by an unelected commission alongside bankers was the ultimate objective.

Hagel, the philosophical father of Germany (1770 – 1831) wrote: “The people… do not know what they want. To know what one wants is the fruit of profound insight and this is the very thing the “rabble” (common people) lack. We should venerate the State as an earthly divinity. Only the bureaucrat is the true servant and master of the State.”
And so it came to be! The Franco/German “earthly divinity” was borne out of deceit, misrepresentation and lies. The initial idea of a Common Market was excellent but instead, it mutated into an economic, social and political institution. After all, integration was the ultimate master plan; a marriage without divorce!

In a real sense the economic driving force behind EU prosperity failed to provide the financial security promised to all European citizens. Shoring up the euro currency soon became an artificial process to ensure its stability against world financial markets. But, currency markets cannot be so easily fooled! The US Treasury in its Report to Congress recently lambasted Germany, accusing it of “exporting economic depression to the rest of Eurozone and indeed to the global economy”.

For Cyprus, joining the European Union has been an ill-considered experiment. From an export-driven economy, Cyprus soon regressed into an import consumer market and developed a strong dependency for survival on the fragile tourist economy to boost the nation’s coffers. Meanwhile, exports to the EU dwindled while imports grew enormously! The result of this disparity produced a volatile economy and turned toxic especially when a deregulated financial sector grew lawless in its pursuit of greater wealth accumulation.

It became most unstable when the stock market opened its doors, which swiftly developed a speculative culture reminiscent to a “wild-wild-west” with instant riches for some and hell for others! To this day, nobody has ever been prosecuted or gone to prison for the stock exchange scam that saw thousands of people lose their life’s savings. Without strict regulations and proper controls in place, the problem of economic corruption and “get-rich-quick” obsession escalated with a vengeance.
Things turned worse when Cyprus was branded with a “junk-status” credit rating and thus losing its international credibility and trustworthiness as a financial center. A lame government found itself unable to raise capital on the international market and called in the EU IMF-Troika for a bailout. This was a perfect opportunity for Troika to make its attack against the island for the ultimate control. President Anastasiades and his government decided without parliamentary authority to sign over the reins of power to Troika for exchange of a 9 billion euro loan. This Machiavellian decision entered the Republic into economic chaos never experienced before!

But, who and what are these people that dictate national policies in exchange of loans? They are the new army of the European Central Bank (ECB) and the International Monetary Fund (IMF) who use loans as weapons to win the battle of the day. They are a dedicated group of merciless young bankers and clever accountants who always work in packs – just like hyenas – for the ultimate kill! They are the foot soldiers known as “hackers” or “economic assassins” with one aim in mind; to co-ordinate and colonize nations through loans! Cyprus and Greece are their first victims!
Yet, there were alternatives to avoid Troika’s yoke but were never explored. A good example of that is how the Archbishop of Cyprus simply told them to “keep their hands off the Hellenic bank”. The Hellenic bank recapitalized through private funds in exchange for share capital rather than allow it to fall into Troika’s hands under the terms of the Resolution (Mnimonio) Agreement.

In fact what happened to Cyprus was a clever collusion in crime by the Commission’s Eurogroup. Germany – of all people – played a pivotal role in its execution and this nation should have known better! If the Cyprus government and its “brilliant” economists had the foresight and courage to cite the London Agreement on German External Debts known as the 1953 London Debt Agreement things could have been very different for Cyprus. The Agreement set a precedent for debt relief for poorer economies but it was never taken up during the loan negotiations between the Cyprus government and Troika. Incompetent as they were, they probably had never heard of it!

This Debt Relief Agreement negotiated by Western allies (Britain, the USA, France and others) provided an inspiring master plan to help Germany recover financially rather than to destroy it completely. The idea behind the plan prescribed was that a country; is more likely to repay its debts through economic recovery rather than economic suppression and stagnation!

For Cyprus, EU-Troika did precisely the opposite. It destroyed its economy; caused massive recession; suppression; shut down banks; raised taxation and triggered massive unemployment, which will exceed the 100.000 figure by early next year. Contrary to a Europhile-government’s spin to convince citizens otherwise, Troika’s economic colonization stagnated all hopes for recovery!

The final thread of the spiralling web of conspiracy has not been unravelled yet but it all points to the assumption that Troika’s objectives are to snatch a share of the natural gas and break up the strong banking system on the island – the latter has already been achieved!

Linking what Troika did for Cyprus and what the Allies did for Germany a contrasting picture emerges; one of double standards and sinister complexity! Analytically, Germany’s debts after the war amounted to 38.8 billion marks and the Agreement signed on 27 February 1953 reduced the debt by 14.5 billion, which amounts to a 62.6% reduction. The repayment period was also stretched out over 30 years and allowed Germany to postpone some payments until such time as re-unification. It was decided that the burden of servicing the entire debt if not reduced, meant that the German economy stood: little chance of a recovery!

The philosophy behind the Agreement was a masterpiece of a road to recovery, and worked wonders. Foremost, the Agreement provided that Germany was able to pay its external debt while maintaining a high level of growth and improving living standards of its population. In fact, it meant that they were allowed to pay back the loan without getting poorer. That was a superb piece of economic strategy that could only benefit both parties!

To achieve this, creditors accepted to: help Germany reduce importation (it imported more than exported–just like Cyprus does); to assist and manufacture at home those goods that were formerly imported (equally help with job-creation); creditors agreed to reduce their own exports to Germany; supported and purchased German exports to restore a positive trade balance; the debt service/export revenue ration, was not to exceed 5% and depended on how much the economy could afford; debt re-payment would derive directly from export revenue income; the Agreement also contained the possibility of suspending payments while conditions were re-negotiated in the event of reduced available resources. On the 3 of October, 2010 the last payment was made with 69,9 million euros. This payment was considered to be the last one to its creditors.
On comparing what Troika’s rescue plan did for Cyprus it becomes obvious that the signed Resolutions (Mnimonios) were not meant to restore economic stability and growth as the 1953 London Debt Agreement did for Germany, but to colonize the country through poisoned loans.

The result of that decision by the government to accept and sign the terms of the IMF EU-Troika loan means that Cyprus, has now adopted three new masters. Only time will reveal the real truth behind the entire exercise!

*Andreas C Chrysafis
Author – Writer – Painter