Look at Iceland, which, like Cyprus, was awash with Russian money

 

Jón Sigurðsson	Myntráð	Kanadadalur	Icesave-vextir	Ólafur og Dorit	Icesave-vextir
Stjórnarskráin	Ólafur og Dorit	Vinstrivaktin	Samtök fullveldis	Evrópuvaktin	Heimssýn

  

  

Samstaða þjóðar    NATIONAL UNITY COALITION                                                               Baráttusamtök fyrir sjálfstæðu ríki á Íslandi og fullveldisréttindum almennings.    Stöndum vörð um Stjórnarskrá Lýðveldisins.

  

Look at Iceland, which, like Cyprus, was awash with Russian money.

Fyrst birt í The Telegraph 22. marz 2013.

  

  

Charles Moore.

Othello. “What’s the matter, think you?”

Cassio. “Something from Cyprus, as I may divine; It is a business of some heat.”

Shakespeare is on the money. Then, as now, Cyprus was the toy of foreign powers. Othello was sent there from Venice to repel the Turks, though luckily they all got blown away in a tempest. Since then, Russia, Britain, Greece and, always, Turkey, have taken an interest. Even today, Britain has an important listening post for the Middle East there, 60,000 expatriates, 3,500 troops in our sovereign bases and a continuing role as a guarantor power. Cypriots still drive on the left.

Lord Salisbury, who won control of Cyprus for Britain from Turkey in 1878, once sent an envoy there. People complained that the man knew neither Greek nor Turkish. “Good,” said Salisbury, “then he will hear fewer lies.”

That is the authentic tone of an imperial power. Today that power is Germany. We have heard enough lies, the Germans are saying haughtily to the Cypriots, now shut up and do what we want. Yesterday, Angela Merkel, the German Chancellor, ordered that “Cyprus must realise that its business model is dead”.

It is hard to tell whether this was true before she said it. Some argue that the problems in Cypriot banking were hugely exaggerated by the country’s outgoing Communist government for electoral reasons. But this has become irrelevant. If the business model was not dead before the intervention of Brussels, Frankfurt, Berlin and the IMF, it is now. No one with any choice in the matter will want to put his money in a Cypriot bank any more.

This now-dead business model supported banking assets worth eight times more than the country’s GDP, so its demise will hurt for a long time. If you are an independent country, even a small one, you can recover from economic shocks surprisingly quickly. Look at Iceland, which, like Cyprus, was awash with Russian money, but, unlike Cyprus, is not in the eurozone. It ended up, when its banks collapsed, with each Icelander theoretically on the hook for an average of $330,000. It decided that, after all, it preferred fishing to banking; it had its own currency. Now it is back on the way to economic health. No such luck for Cyprus. From now on, it will be told what to do by the nations and organisations into whose hands it seems about to surrender itself. It cannot make decisions for its own good. It is a tiny, far-flung, vulnerable part of the new German Europe.

So let us look at this question not from an economic but an imperial point of view. One problem of imperial rule is that it can be worse for the satellites of the empire if the centre is democratic. A benign despot can at least take a long view about the welfare of his fiefdom. Elected rulers usually cannot. Television footage this week has been of weeping, angry crowds in Nicosia and Limassol, but the crowds that matter are the ones that have not taken to the streets in Berlin or Munich or Hamburg. They get their next vote in the German general election in September. They dislike shelling out for what they see as feckless Mediterraneans: they detest the idea of doing so for what they see as crooked Russians. The conflict between Teuton and Slav has never ceased. Mrs Merkel’s policy for Cyprus has to be constructed round what her Teutons want.

It is another feature of democratic regimes that they are instinctively uncomfortable with imperial pretensions; so they seek the moral high ground, like a mountaineer who just keeps climbing higher when he’s lost in the fog. We British liked to think that we were bringing civilisation and the rule of law to our colonies. The Americans have tended to deny an imperial role altogether and talk about safeguarding democracy.

Now it is the Germans’ turn to exercise an imperium. Their re-entry into the comity of nations has been based on the idea that they are peaceful, law-respecting, internationalist, politically vegetarian. They support an ever-closer European Union because they want to be a “European Germany” to avoid a “German Europe”. They are perfectly genuine about wishing to overcome what is euphemistically called “the problem of history”. So they are obsessed with the importance of rules, of obeying them and being seen to obey them. They have been good boys, and by doing so, they have prospered mightily.

But as they have grown stronger, their love of rules has turned into an instrument of their power. We are good European citizens, the Germans argue, and we have done well. So the answer is for everyone in the eurozone to behave just like us and they will do well too. One size must fit all, and that size is made in Germany. What the Germans leave out of account is that the single currency which, for them, is artificially low in international value is, for most of the rest of the eurozone, punitively high. What helps them crushes others. After victory in 1945, Churchill broadcast that Germany “lies prostrate before us”. Today, most of southern Europe lies prostrate before Germany.

Mrs Merkel does not see it this way, but if she were to impose upon her own country the levels of unemployment which her eurozone policies inflict upon Spain or Greece or Italy, she would be out of office tomorrow. It is in the nature of imperial power that it is very much slower to feel the pain of those it rules at a distance than that of its own people. That is why its colonial subjects tend to dislike it, even when it is well-intentioned and orderly.

By this point, many people, especially Germans, will be furiously objecting to my line of argument. This is not imperialism, they will say, this is a new concept of doing things called the European Union. The eurozone is on its way, they go on, to the safe harbour of a banking union and a fiscal union, to a United States of Europe in all but name. Then all will have equal rights and equal protection. To get this union right, though, we mustn’t have “legacy debts”: these problems of transition are tough, but if they are firmly dealt with, all will be well.

And possibly, one distant day, it will be. Possibly, just as people all over the known world could once say “Civis Romanus sum” (“I am a Roman citizen”), so they will be able to say, “I am a European”, and know that they are safe and free under the blue flag with its golden stars. It may be for that reason that the eurozone decision-makers decided to make an example of Cyprus. They knew that it was puny. They believed, probably correctly, that it would have to obey. They hoped to show the world, which doubts, that they mean what they say.

But the exertion of such power is a very ugly thing. When you see it exerted you also see who is accorded respect and who isn’t. In this case, ordinary depositors have been disrespected and parliamentary processes have been bullied into giving the “right” answer. Cyprus is capitulating not out of euro-patriotism, but out of fear. This is not European “solidarity” but coercion.

In all this long euro-crisis, Britain has rightly held aloof, but at the same time urged the eurozone to deepen and strengthen itself. This is inconsistent reasoning. If tiny Cyprus can be so much trouble in building the great euro-Empire, what does that say about the likely harmony of the ultimate whole?