Tag: ECB

  • A Devil’s Island off Turkey

    A Devil’s Island off Turkey

    By Hermes SolomonPublished on March 31, 2013

    GIDEON John Tucker (1826–1899) was an American lawyer, newspaper editor and politician. In 1866, he wrote, “No man’s life, liberty or property is safe while the Legislature is in session.”
    Tucker’s statement is certainly true of our legislature, who betrayed citizens by failing to observe laws governing our membership of the European Union. In turn, Cyprus was punished by the troika group, which comprises the European Commission (EC), the International Monetary Fund (IMF), and the European Central Bank (ECB).
    Today, the word ‘betrayal’ is on everybody’s lips – demonstrators, bank employees and politicians to name but a few. But the hard facts of the Cyfi-prob suggest otherwise. Comparing President Nicos to Judas is unjustified.
    I’ve been living here for ten years and have yet to receive a straight answer to any question posed to officialdom. I initially put their evasiveness down to deviousness/artfulness, but now suspect it might be due to excessive in-breeding and autism.
    Historically, our ancestors were known as scavengers of shipwrecks – our inlets/harbours used as ports of convenience for pirates pilfering Ottoman seafaring wealth. The island’s hillbilly farmers survived impoverished on scrubland, bedevilled by disease and plagues of locusts.
    Since 330AD we were a people loosely unified under the guidance of the Greek Orthodox Church, and have, in 1700 years, failed to adapt to other than the spiritual. We are still living in trust of yesterday’s Constantinople sustained by easily accessible dosh. After all, what else could our banks have done with those Russian billions other than chuck them at irresponsible scavengers at high interest rates who, like vultures, tore the corpse of this economy to shreds, failing abysmally to invest a single cent in the island’s future and the security of our grandchildren?
    Our past sins have now returned to haunt us.
    My book, Cyprus on the Rocks, published over two years ago, more than aptly presaged today’s catastrophe. Even the title should have made the literate sit up and take notice. But which politician or economist predicted our own impending doom when we were gloatingly dispatching food parcels to Greece? The cost of fuel has doubled since, during which time our banks persisted in throwing somebody else’s money at an already hugely financially overstretched populace?
    There are more black holes in our banking and financial services sector than in the entire universe – so many in fact that our legislature doesn’t even know where to start. Numbers are meaningless; how to resolve bad banking practices and self-inflicted poverty, unanswerable.
    How much of depositors’ deposits will be frozen. What will be the eventual limit on withdrawals from ATMs? Who will and who won’t be permitted to transfer ‘their funds’ abroad in what was, up until recently, a ‘free movement of capital’ EU member state? And for just how long will restrictions last?
    Ten years ago, passenger ferry services from Piraeus to Limassol were abandoned. Cyprus, without realising it, became an island prison facing Turkey, like Devil Island in French Guiana.
    The illegal way out of the Republic is through Ercan Airport or Girne (No, not Tymbou and Kyrenia which, like Constantinople, no longer exist). Those of you with pots of cash at home, and who now hate Cyprus, please leave!
    Cyprus has been driven down the drain by powers beyond the ordinary man’s control. She is now floating out to sea. But you could, like me, stay onboard and fight to drop anchor.
    The Attorney-general’s job is to protect the innocent at the expense of the guilty and not permit those criminals to escape with their euros, gold bars or dollars to other tax free havens, which will shortly come under the scrutiny of EU officialdom anyway. Passports of all suspects responsible for this mess should be confiscated until an investigation into their presumed illegalities is satisfactorily concluded. This island must be sealed tight, and with the co-operation of the Turkish Cypriot authorities, flight of criminal phoenixes grounded.
    It is pointless arguing the legality of recent legislation – fighting for our human rights since 1974 has dug too many of us into the ground on both sides.
    But today’s financial fiasco can in no way be compared to 1974. Today, we are stony broke with a declining tourist industry, virtually no manufacturing base and a bankrupt financial services sector.
    We must expect to be drip stolen of what money we have left by further devious legislation (taxes) and our banks. Our standard of living will fall rapidly to resemble that of Greece.
    We will endure eternal poverty if we continue sending our kids on the streets to demonstrate with placards insisting that the ‘troika get out of Cyprus’, we ‘leave the Eurozone’ and ‘return to the Cyprus pound’ – all nonsense and brainwashing by teachers who should know better.
    But where does the island’s future lie? And that is the only question now worth asking and answering.
    We will never see the benefits from our gas wealth unless there is a settlement with Turkey over the Cyprob. We must solve the Cyprob yesterday for the sake of the economy tomorrow. This is the only way forward. Accepting a revised Annan Plan, precipitating closer ties with Turkey, will mollify both Israel and the US, even if it leads to weaker ties with Russia and Europe. We are, after all, central to the Near East, at present floating awkwardly in the middle of ‘no-man’s’ sea!
    All nationalism has its price and we’ve paid for ours many times over – 1821, 1931, 1960, 1974 and 2013. Enough is enough! Let’s start living in the real world and stop living in the ephemeral (of no lasting significance) past! We have been staring in the wrong direction for far too long.

  • Turkey to EU: say goodbye to democracy and start printing money

    Turkey to EU: say goodbye to democracy and start printing money

    By Andrew Rettman

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    BRUSSELS – Eurozone countries will have to give up on normal democracy and the European Central Bank (ECB) will have to print money if the euro is to survive, Turkey’s ambassador to the EU has said on the eve of the EU summit.

    Noting that EU leaders are going in “the right direction” by proposing central control over national budgets in return for help from the ECB, Selim Kuneralp told EUobserver in an interview on Wednesday (7 December) that traditional democratic structures have no future in post-crisis Europe.

    “In an election campaign, you have one party that says ‘I’m going to reduce taxes and invest in this or that, to build nuclear power plants or spend money on renewable energy, build more schools and better hospitals.’ And the other party says ‘I’m going to do everything this guy is promising, but more.’ So you have a race on who is going to spend more. But if you have this kind of mechanism [of central control] they won’t be able to do it.”

    “That means you would have such a loss of sovereignty as to make election campaigns meaningless,” he added.

    “I don’t see any other option – either you have a single currency with fiscal union or you don’t have a single currency at all.”

    With Germany in the driving seat on EU reforms, Kuneralp said German society has set a good example over the past 10 years by keeping wages low and making sure banks lend responsibly: “They’ve been good boys. They’ve been Germans … They are responsible people. In Greece, you can go to the bank and borrow money to go on holiday. In Germany you can only borrow money for some productive purpose.”

    He noted that if EU institutions are in future to police national spending, they will have to do a better job than in the past, however.

    Looking back to the Greek statistics fiasco in 2010, when Athens admitted to lying for years about debt and GDP, Kuneralp said EU officials must share the blame: “When I talk to people in the commission, they say ‘Well, you know, the Greeks lied and that was it.’ Well, they may have lied, but your job was to find them out. The commission were not doing their job properly and you need a mechanism that makes sure they do their job properly and expose liars and fiddlers.”

    He added that Germany will have to drop its opposition to letting the ECB create money to prop up eurozone debt.

    Kuneralp pointed out that the US and the UK have done better than euro countries in the crisis by adding zeros to central bank reserves – $1.4 trillion in the case of the US, the equivalent of Turkey’s GNP for two years.

    “The Americans have added zeros to their ledgers and it has had no visible impact on inflation … The lesson is that you can do it,” he said. “In the end, the Germans will have to move in the direction of more flexibilty and allow some buyback or some other instrument that is a euphemism for printing money … You have to reduce your debt by having a little bit more inflation – you print your way out of this conundrum.”

    The ambassador noted that while Turkish banks have almost no exposure to bad eurozone debt, the Turkish economy is at grave risk if the euro goes down – 50 percent of Turkish trade is with the Union, 80 percent of foreign investment and 70 percent of its tourist income also come from the bloc.

    “We are not rejoicing. There’s no schadenfreude. We’re not saying: ‘Oh well. You deserve this for not taking us into the EU’,” he told this website.

    On a note of optimism, the veteran 60-year-old diplomat, who was Ankara’s sherpa for three G20 summits in 2008 and 2009, said the climate of panic in the media is over the top.

    “I read one comment which said ‘This is the most historic, the most crucial summit since … the summit of 26 October.’ So, all this hype, I don’t know how far to take it seriously,” Kuneralp said. “They [EU leaders] can’t allow this whole structure to collapse. I can’t believe this is going to happen, so they will take the right decisions in the end.”

    via EUobserver.com / Economic Affairs / Turkey to EU: say goodbye to democracy and start printing money.