News is a funny thing. For days, one story will flood the airwaves, lakes of ink being spilt as pundits and commentators fall over each other to explain in detail why it all matters so much. Then, abruptly, the ship sails and a new story is run up the flagpole, the whole charade played out again with a new theme. The situation in Cyprus, which erupted at the tail-end of March this year, was no exception. Unsurprisingly, the sinister troika and its cabal of EU elites who connived to saddle the small island nation with more debt than it can ever hope to pay off, knew this only too well. They were banking on the fact that after a week of angry headlines and doomsayers preaching the End Times for the Eurozone, everything would blow over and we’d all go back to normal. Were they wrong? Have you stopped to ponder the significance of Cyprus in the past couple of weeks? Or have tales of pimple-crested cretins celebrating the death of an elderly widow and an idiot’s visit to Anne Frank’s house eclipsed the debacle?
Well, Cyprus does matter. Perhaps more so than any other event since the Eurozone first revealed its seemingly infinite capacity for crisis. What happened in Cyprus should send an arctic shiver down the spine of libertarians the world over. In what follows, I will spell out just what Cyprus has taught us about the EU and its lack of regard for the hallmarks of liberal democracy. Because Cyprus isn’t a stale news story: it is the first trump of what promises to be a very dark revelation in European history.
I. Property rights are henceforth suspended
When the first murmurings of a plan to raid Cypriot bank deposits were heard, most greeted it with incredulity. Eurocrats may have ridden roughshod over citizens’ rights in the past, but surely even they would be unable to stomach a move that the Soviet Union at the very height of its tyranny had never countenanced. Of course, the truth is now forever scribed into this annals of EU history: in Cyprus, the troika proposed, and saw fit to carry out, naked theft. The Cypriot people could do little more than stand outside their own banks and wail as their money was stolen, their assets frozen and ATMs deliberately left to run dry. The property rights of ordinary EU citizens were waived without their consent.
II. National parliaments will remain silent unless spoken to
Some ardent Europhiles might try to argue that the Great Daylight Robbery only happened with the consent of the Cypriot parliament. It is true, admittedly, that Nicosia did eventually vote for the asset seizure – but only because it had been told to vote again, having got it ‘wrong’ the first time. In circumstances that are all too reminiscent of Ireland’s Lisbon Treaty referenda, Cyprus rejected the troika’s proposals and then, a few days later, approved them in an even deadlier form. The EU has absolutely no respect for national parliaments, with Barroso himself believing that “decisions taken by the most democratic institutions in the world are very often wrong.” Cyprus was certainly no exception.
III. Foreign nationals are fair game
After the first protests began to rumble in response to the troika’s dastardly plans, the EU elites turned their spin machine up to eleven. This wasn’t about hitting innocent Cypriot savers, we were told, not a bit of it. It was about making evil Russian oligarchs pay their fair share. The money rightfully belonged to the EU, and all that the blessed troika was proposing was a saintly form of wealth redistribution. Without wishing to fall foul of Godwin’s Law, the demonising of a supposedly rich group of foreign nationals isn’t a new idea in Europe. What is more, if the policy really was about requisitioning Russian oil money, why didn’t the troika simply propose a tax on purely foreign deposits? Indeed, why not take the argument to Moscow where it rightly belonged instead of holding it behind the scenes in Cyprus? The truth, as with all scapegoats, is that the Russian investors were merely a convenient smokescreen to hide the real evils being committed by the troika themselves.
IV. The Euro’s welfare comes before the people’s
The Cypriot sacrifice made at the altar of the Euro proves, more than any made before it, that nothing is more important to the EU than the continued existence of its pet vanity project. The idea that the EU stands for peace and prosperity through harmonious relations between all European nations is not merely dead; it has been buried, six feet under, in a lead-lined casket sealed with reinforced concrete. The Euro, like Frankenstein’s monster, has spiralled wildly out of control, its architects unable to accept their own failings. Rather than apply the brakes, they continue to accelerate faster and faster towards an anti-democratic future. Like the fetishisation of revolution before it, the Euro now occupies a cult-like status. No sacrifice is too great, no principle more important. All must be forsworn in order to save the currency. People have long forgotten what the Euro actually is – a fiat currency with no real value – and instead are told that without it, all hope of future recovery is futile. Knowing that it would never happen by choice, the Euro was deliberately constructed in order to engender political union out of necessity. It is the only legal tender in history which has had power, rather than money, as its true currency.
V. Punishment will always be favoured over rehabilitation
‘Why us?’ the Cypriots legitimately asked. They had seen their Greek cousins receive hefty bailouts thrice from the ECB and could hardly be faulted for assuming they would receive similar treatment. The entire Cypriot economy amounted to little more than €18bn – small change in comparison to Greece. Yet the troika preferred not to save Cyprus. Instead they chose to wreak vengeance for what they perceived to be a slight against the EU itself. ‘Cyprus is no more than a tax haven, why should hard-earned German Euros be used to prop up Russian offshore accounts?’ Thus spake the elites. The rest of the EU concurred. What was Cyprus to do? This was Qualified Majority Voting in action. Wherever such an opportunity exists, the EU will always opt for the lash rather than the rum. Fear and bullying are its justified means to secure an end that is all too grimly certain.
VI. Preserving the single currency means abolishing it
Capital controls were put in place, ahead of the banks re-opening, in order to stop what normally happens when protection is unavailable and progeny unwanted. In the finest traditions of Orwellian doublespeak, the EU proclaimed that the Euro had been saved. Yet, how could this be when a Euro in Nicosia was no longer the same as a Euro in Nice? Having Euros in Cyprus meant being unable to move them – and thus spend them – elsewhere within the Eurozone. Never before had the Euro become compartmentalised along national boundaries. In effect, to save the single currency, the EU had violated one of its most basic premises. The Euro has gone where no currency has gone before it – into the realm of strange ontology, where to exist means at once to not exist. In the days and weeks following the Cypriot Solution, it has become less and less clear whether anything, besides Eurocrat blushes, has been saved at all.
VII. This is only the beginning
Throughout the week in which the Cypriot parliament tried to balance the impossible task of representing its own people whilst bending to the merciless will of the troika, one Eurocrat after another went to great lengths to explain how ‘unique’ the Cyprus situation was. No sooner was the blood dry on the decree legitimising the deposit raid, however, than Eurogroup President Jeroen Dijsselbloem shocked the world’s financial markets by labelling it a ‘template’. Europhiles may choose to believe that what happened in Cyprus could only happen in Cyprus, and that Mr. Dieselboom (as the inimitable @zerohedge soon took to calling him) merely misspoke. But precedents are like bear traps: once they’ve been set, it’s very difficult to step over them. What happens when an economy the size of sunny Spain or government-less Italy finally goes belly up – which is surely only a matter of time. There isn’t enough firepower left in the ECB bazooka to neutralise that kind of economic assault.
Property rights are the backbone of libertarianism; from them, pretty much every libertarian concept is derived. That such rights could be batted away in Cyprus, as if they were no more significant than a bothersome bluebottle, is bloodcurdling. Cyprus was the Petri dish in which the EU cultured a dangerous strain of precedents. It is only a matter of time before they go viral.
Chi The Cynic – 15th April 2013
Follow me @chithecynic