At the end of March, wealthy depositors with banks on the Mediterranean island of Cyprus had their accounts “levied” as part of a bailout deal for Cypriot financial institutions by other European Union members.I delved into the news for an update on how the bribe plan worked. Admirably, as Cyprus receives EU-IMF bailout funds!
Cyprus has received the first installment of a 10bn-euro bailout package from international creditors, which was agreed earlier this year.
Cyprus received 2bn euros (£1.6bn; $2.6bn) in loans, said a statement by the European Stability Mechanism.Another 1bn euros will be transferred before 30 June, the ESM said.
It’s a veritable bailout bonanza!!! While the repercussions of the Cypriot bailout are still not clear, it is worthwhile taking a look at the recipient of another bailout deal: Greece. Three years after their “rescue”, the Greek economy is still full of fail. In Mindful Money, economist Shuan Richards has this analysis:
It is now over three years since the bailout of Greece which if we recall was supposed to provoke “shock and awe”. Ironically it has followed the path of the original shock and awe claims of the attack on Baghdad where initial claims and boasts then became bogged down in an insurgency. In both instances reality proved inconvenient and we now see that Greece is bogged down in an economic decline rather than seeing the fruits of a “rescue” that was supposed to see her growing at 2.8% per annum right now. If that now sounds insane well it was supposed to rise to 3.1% next year on its way to 3.8% in 2015. Or we note it was put this way.
Richards actually has some information on Cyprus as well, and it is none too good:
You might think that something at least would have been learnt from this and yet what is beginning in Cyprus looks even worse.
For the period January-February 2013, the (Retail Sales) Index is provisionally estimated to have a decrease of 8,5% compared to the corresponding period of 2012.Based on the seasonally adjusted data that shows the trend of unemployment, the number of registered unemployed for April 2013 increased to 44.043 persons in comparison to 41.413 in the previous month…….In comparison with April 2012, an increase of 9.803 persons or 27,7% was recorded
Sound familiar?
Both countries are faced with daunting unemployment numbers. However, at least one Cypriot industry is poised for a boom if the island follows the Greek economic model:
With Greece suffering the biggest economic depression in decades, all so a few rich men can preserve their wealth and not have their EUR-denominated savings wiped out (even if the alternative means finally being able to rebalance externally using the Drachma instead of forcing internal rebalancing via unemployment and plunging wages), it was only a matter of time before we found out just how humiliating the conversion of the entire economy to a “gray”, non-tax paying one would be for the citizens of Greece.As the NYT reports, in just the past two years, the numbers of Greeks engaging in prostitution as a last course source of income has more than doubled: according to the National Center for Social Research, the number of people selling sex has surged 150 percent in the last two years.
George Washington once said: “Some day, following the example of the United States of America, there will be a United States of Europe.” Too bad our modern leaders decided to reverse roles, and use Europe as a template for our economic system.
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