Four days into the worst crisis to hit the island nation since the 1974 invasion by Turkey, Cyprus’ lawmakers did the unthinkable and the unprecedented Tuesday: In voting unanimously to reject the levy on bank savings mandated by EU authorities in Brussels to pay for a bailout, Cyprus has become the first country to openly defy the will of EU financial Powers That Be and the international banking cartel that they serve.
The crisis in Cyprus is rapidly evolving into a financial confrontation between Russia and the EU, since Cypriot banks are major repositories for Russia’s wealthy nomenklatura (and not a few Russian gangsters, it is alleged). Moscow is now working feverishly with the government of Cyprus to reach an alternative deal whereby Russia would extend a needed loan to keep banks in Nicosia afloat, in exchange, perhaps, for access to Cyprus’ newly discovered offshore gas fields. Cypriot authorities, meanwhile, have extended the “bank holiday” through next Tuesday, warning of calamitous consequences if no bailout is forthcoming.
Newly elected president of Cyprus Nicos Anastasiades remains adamant that some sort of austerity must be imposed on Cypriots to secure an EU bailout. Options under discussion include imposing the controversial levy on savings at slightly lower rates to make the confiscation more palatable, especially for small accountholders, and raiding the country’s pension funds (another tried and true target for government looters when there’s no more money to pay creditors).
Whatever the short-term outcome in Cyprus, the larger impact of the dramatic events in this tiny player in the EU’s epochal debt crisis is only beginning to play out. Tellingly, the courage of Cypriots and of their legislature in openly defying Brussels bureaucrats is being touted continent-wide as an example for cowed and bullied populaces in the likes of Greece, Spain, and elsewhere, whose governments up until now have bristled at Brussels, but ultimately done the bidding of EU mandarins.
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Photo of Cypriot parliament voting against levy on bank savings: AP Images