Cypriots say ‘no!’ as bank crisis rocks Europe

Scan page 1

The outrage of workers in Cyprus against a plan to “save” the country’s finances by seizing cash in small de­ positors’ accounts forced the country’s parliament to vote unanimously in late March against it. The plan was intended to avert the wrath of the International Monetary Fund, the European Central Bank, and the European Commission.

This “troika” of powers had settled on the island nation as next in their list of “debt-ridden” countries whose finances needed to be re-arranged to try to re­ store the profits and wealth of the con­ tinent’s richest and most powerful.

A week later a new plan was put for­ ward, one tailored to not require gov­ ernment approval, and putting more of the main burden on bigger deposi­ tors—especially Russian magnates who have used the country as an offshore tax haven—and on the banks’ bond and share holders. But there is no doubt in anyone’s mind that those being directly soaked will find indirect ways to recoup their losses by dipping into the pockets of the island’s workers.

Still, just the fact that Cypriots loudly and repeatedly said “No!” has inspired workers throughout the region. Such inspiration is all the more crucial as the spillover from the Cyprus crisis will be quick and massive both inside and out­ side its borders. That spillover includes expected runs on banks, not only in Cyprus but in every European country on whose finances the troika have cast scornful eyes. The recurring theme among workers interviewed is, “They threatened to steal our cash once; who’s to say they won’t actually do it next time?”

Radical author Thanasis Kampagi­ annis wrote that “Cyprus bank deposits will take a dive. Ironically, that makes the cost of recapitalizing them even greater.” This, in turn, means further ex­ tractions from depositors as well as aus­ terity measures, which then means fur­ ther deepening of the recession, which weakens profits and tax revenues, and on and on.

Some of the more oblivious and/or duplicitous business columnists (such as The New York Times’ Andrew Ross Sorkin) argued that Cyprus was so small and unique that its crisis would have little impact elsewhere. But in fact the biggest blow to Cypriot bank stabil­ ity was a product of the country’s very interconnectedness, i.e. the “haircut” imposed on Greek banks—which hold huge amounts of Cypriot bank depos­ its—in return for the “bailing out” of Greece. This is symptomatic of “fixes” to crises under capitalism. The schizo­ phrenic mutual dependence on the one hand, and competition on the other, of economic and political institutions mean “solutions” to one entity’s prob­ lems must take place at the expense of

ACTION

N. Dakota abortion rights Same-sex marriage — 2 After Hugo Chavez — 3 Women & working-class fightback — 4 Immigrant crackdown — 5 Stop fracking! — 6 Capitalism damns the environment — 9 Canada news — 11 Connecticut tuition — 12