Cyprus: The unprecedented example of an official bank heist

Cyprus: The unprecedented example of an official bank heist

By Petros Arguriou

For those who wonder where the hell is that island of Cyprus, the answer is: right in the middle of it, right in the middle of a financial hell.

For those who wonder why the hell should we care about an island, the answer is, if not stopped in its tracks, all hell might break loose.

To try and understand the horrific situation in Cyprus, one has to first learn a bit about the history of the island.

Cyprus is the third biggest Mediterranean island, east of Greece and South of Turkey.

Inhabited by Greek people for millennia, Cyprus was conquered by the Ottoman Turks in the 16^th century and remained thus until 1878, when the Ottoman Empire leased the island to the British Empire.

In 1914 the British Empire annexed the island.

After a long history of anti-imperialistic struggles seeking unification with Greece, the Island was finally granted its independence in 1960.

But the Turks had not lost their appetite for Cyprus and its geopolitical significance.

In 1964, Turkey plotted to invade the island but the invasion was averted by the uS government and a very strong response to the Turkish’ imperialistic intentions from then US President Lyndon Johnson.

But the US geo-policies who soon sift.

In 1967, a CIA backed coup d’ etat establishes a junta in Greek that would last for seven years. The Greek Junta is a threat to Cypriot Independence.

After Henry Kissinger became Secretary of State in 1969, he oversaw a  plot orchestrated by the Greek Junta with the help of the CIA to assassinate the First President of the Democracy of Cyprus, Archbishop Makarios. Though the attempt failed, the conspirators would not abandon their plans to overthrow Makarios, a man who Kissinger regarded being “too independent”.  In 1974, a coup d etat overthrows Makarios and places a gunman, Nikos Sampson as president of Cyprus. The coup d’ etat served as a pretext for Turks to invade the island. Hundreds of thousands of Greek-Cypriots are ousted from their homes. Thousand of them are still missing.

Cyprus is split into two.

Despite the bloody division, Cyprus will economically thrive. Based on its banking system, Cyprus will have uninterrupted positive growth rates for years to come.

In 2004, Cyprus will join the EU. Influenced by Greece, the small country of 890000 Greek Cypriots would abandon its national currency and thus the ability to plan its own monetary policy and would be absorbed into the Euro mechanism in 2008.

Let’s take a look at the financial figures prior to Cyprus entering the Euro Mechanism:

Budget surplus of 1.5%, inflation 2.2%, 3.9% unemployment and per capita income is 92% of the EU average in purchasing value.
Cyprus public debt is below 60% of Cyprus GDP in 2007.

Now how can such an exemplary economy face a crisis it can’t overcome on its own only a few years later?

The answer is not very surprising. The reason of Cyprus’ downfall lies not in her banking system but rather, in its political system.

The two political systems, the Greek and the Cypriot, coordinated their efforts to accelerate degenerative financial phenomena and acted as catalysts that would enable the manifestation of a crippling financial crisis that would enable the creation of the United States of Europe.

In 2008, the Cypriot people voted for the Cypriot Labor Party, descendant of the Cypriot Communist Party and elected Dimitris Christofias to be their president.

Christofias promised the Cypriots generous social benefits and a more independent Cyprus. The day he was elected he declared: “The goal of our Presidency is to achieve a just, viable and functional solution to end the occupation and colonization. Solution which ensures the sovereignty, independence, territorial integrity and unity of the Democracy and removes all rights of military intervention in the internal affairs of our country by foreign forces”

Christofias, the pseudocommunist was of course purposely lying in order to deceive the Cypriots and masque his real intentions.

The political integration inside the EU demanded less national sovereignty, not more. At the same time, Christofias tax raided the Cypriots.

In 2009, a year after the presidential elections in Cyprus, George Papandreou, the offspring of a not entirely Greek Political dynasty, an ardent supporter of “Global Governance” and a man with heavy connections with important global lobbies and lobbyists,  is elected by the Greeks for President with the slogan “Money do exist”.

To win the elections he promised the Greek People ample social benefits. He declared that would never invite the IMF into Greece because IMF had the very bad reputation of destroying economies and societies.

He was lying. Papandreou had already made a secret agreement  with Dominique Strauss Kahn, then Head of the IMF, to hand Greece over to IMF.

But the Greek economy, facing huge structural problems, was not yet IMFable. The budget deficit was that big to allow IMF intervention.

For a year or so the Papandreou Administration laid dormant making hallow declarations about an “open government” inspired by the “open society” ideas of his friend, the multibillionaire profiteer, George Soros,

During this period, Papandreou and his minister of Finance, Papakonstantinou were placing their Lackeys inside the state mechanism in key positions.

The most important of them was George Andreou, an IMF employee who returned to Greece in order to lead the Greek Hellenic Statistical Authority.

Andreou, altered the statistical methods that the stats agency was using to inflate the budget deficit. In one year the deficit was adjusted from 3,2% to 12,5% and through his intervention to 15,8% of GDP.

No one  can doubt that the Greek statistics were tampered  with since (at least) 2001 by then Prime Minister Kostas Simitis in order for Greece to meet the Euro criteria. But partners in that fraud were also Eurostat and Eurogroup who wanted Greece to enter the deadly for her non antagonistic economy Euro mechanism.

Andreou, (currently facing charges of high treason), with the absolute authority given to him by Papandreou, artificially inflated the deficit figures even after they were revised to represent the true condition of the Greek economy.

Members of the Greek Hellenic Statistical Authority reacted strongly to this arbitration. They were swiftly removed. A few months later the military leadership was decapitated.

With all official reaction from Greece neutralized PM Papandreou and Papakonstantinou started a smear campaign abroad against Greece using the fake statistics to discredit Greece. Instead of fighting against the fundamental Greek problems of economic and political corruption and unreliability, Papandreou used them as a loaded weapon which he turned against “his own” people.

The campaign worked. No one would lent to Greece. Without any catastrophic event, the Greek economy was downgraded from A to C.

Germany, who had to power to stop the Greek crisis at its tracks with a mild intervention and thus stop contagion and the European Debt Crisis that followed, was already planning ahead, devising a future in which she would be the sole and undisputed European Sovereign and the countries of the South would be completely dependent on her.

With the memorandum signed, the Greek people would be held hostage to their creditors and they would obligatory fund the troika’s “assistance” with their pension, wages and insane direct and indirect taxation.

With the crisis unraveling, the Papandreou government would force Public institutions to buy Greek Bonds that would soon be devalued. A new bomb was placed in the foundations of public organizations and funds.

During that period (2010-2011), the cypriot banks would also behave insanely and buy soon-to-be worthless Greek Bonds.

When the haircut of the Greek debt was decided, the parties exposed to it were not the foreign creditors. The Greek and Cypriot political and banking systems had arranged that almost exclusively Greek and the Cypriot peoples would the ones be exposed and damaged by the haircut..

Cyprus lost 20% of its GDP to the deal.

But the Cyprus economy had to sink even further.

A deadly explosion occurred in the naval base of Mari destroyed a big part of the electrification infrastructure, an explosion that smelled like espionage or at least criminal negligence.

Another 4 to 20% of the Cypriot GDP was lost to the explosion.

That was it. Cyprus was in Big Trouble.

The Cypriot pseudocommunist President would soon announce a memorandum for Cyprus.

They were be no more Cypriot citizens. They lost their citizen rights when they became  hostages to their creditors.

In the summer of 2012 after a shortlived “Greek” government, new premature elections were declared in Greece. The right wing politician Antonis Samaras promised his voters to renegotiate the terms of the memorandum in favor of the Greek people. Under constant blackmails, he manages to marginally win the iterative elections. With support of the remains of the pseudosocialist former ruling party, and a splinter party from the radical left which for years remained dormant in order to provide support to the political establishment when the time was right, Samaras formed an unholy alliance to finish off Greece.

Samaras deceived and lied to the Greek people. Not only did he not renegotiate terms but he signed even crueler ones.

Some months later, Cyprus elections occurred. In 28 February 2013, a right wing Politian with an unpatriotic history, Nikos Anastasiadis, was elected for President of Cyprus. To win the elections he guaranteed Cypriots their bank Deposits.

He was of course lying: A few days later he announced a banking deposits haircut. 6,7% for deposits under 100000 euros, 9,9% for deposits over 100000 euros, a sum which amounts to roughly 30% of the rescue package offered by the Eurogroup.

The Cypriots are outraged. They are called to save their banking system with interests on loans created partly with they own savings.

Keen with the banking system since they have created a banking based economy, the Cypriots know that the saving accounts tax, actually a confiscation, an unprecedented bank robbery, would be followed by a withdrawal of trust from the Cypriot Banking System and thus a massive accounts withdrawal: a bank run.

The Cypriot  economy would instantly collapse. And it would never recover.

A Financial Junta was imposed by the Cypriot government. For two days, banks were closed. Only the ATM’s were working for the law that legalized bank robbery to be passed.

The Cypriot Economy froze. The global banking system froze as well. Stock markets globally went down. The message from Cyprus was clear. Banks were no more a safe place to entrust them with your money. A very bad precedent was set.

The risk of a bank run contagion appeared all of a sudden.

What were the Germans thinking? By dictating the uncypriotic Cypriot government to confiscate banking accounts, the Germans backstabbed both the global banking system and the Euroatlantic concession of good faith and cooperation.

What were the Germans thinking?

The Cypriot banking system was a tax haven. A part of the disproportionately large Cypriot bank deposits were from Greek depositors. About a quarter of them were from Russians. And an important fraction of them belonged to the British.

Already, during the Greek crisis, an estimated 140 billion euro fled the Greek Banking  system. A great deal of them entered the German Banking System.

A “controlled” bank run.

Now, when you run, what do you seek? Not a tax haven but a safe haven. And the German banks are a safe haven during the Eurocrisis.

Bank deposits will run from high risk countries to the German Safe Havens.

In the case of Cyprus, the Germans, will also get control of the Cypriot Banks subsidiaries in Greece.

This is not help, or rescue. This is a raid.

Thankfully, under the pressure of thousand of Cypriot citizens who gathered outsied the Cyprus parliament to protest, parliament members voted against the law. 39 MPs voted against and 19 abstained. Sanity is for now restored.

The only question that  remains to be answered is: Is Germany after dissolving Europe to completely dominate and restructure it to her own interests? We will know pretty soon as we will witness unpredictable developments regarding the western world.

The Bank Theft Legalizing Law has yet been voted by the Cyprus parliament due to pressure exerted by the people of Cyprus. Let’s hope it will never will.