The Greek Crisis Bankrupts Southern Cyprus
Southern Cyprus is always afraid of Turkey. Southern Cyprus always hates Turkey. Southern Cyprus is always angry at Turkey. In fact, Southern Cyprus always refers to Turks with racist labels such as “the black beard”, “the black head” or “Attila”.
Southern Cyprus enjoys being in a fight with Turkey. Southern Cypriot politicians thus attract more attention on the world stage than they would under normal circumstances. The world press gives than more coverage than it would. Therefore Southern Cyprus always talks about the political and economic damage Turkey has caused it. It claims that Turkey has occupied a part of their territory through military intervention. The only coup in the history of Southern Cyprus took place on the 15th of July 1974, when Nikos Sampson overthrew Makarios, under the command of the Greek junta leader Dmitri Ionidas. The only foreign armed force in Southern Cyprus is the Cyprus Greek Regiment (ELDYK). These are not matters of interpretation or opinion but facts with legal validity.In any case, no one can change another. The only thing someone can change in the world, is themselves. Let us hope Southern Cyprus decides to change. The hardest wall to topple in the world is formed of prejudices, so let us hope that Southern Cyprus overcomes its own prejudices. Let it stop calling Turks “Attila”. Is this very important? Actually, no. However, it is important for Southern Cyprus to start seeing the truth.What will happen if Southern Cyprus decides to change and overcome its prejudices. It will come to see the facts. One of these facts is that Greece has hurt Southern Cyprus more than Turkey has.The entire Southern Cypriot economy produces EUR 17 billion worth of goods every year. It might not be a great amount but nevertheless significant for a country the size of Southern Cyprus. So the entire production of Southern Cyprus is worth EUR 17 billion a year.It deserves respect, even if it is no major economy. So, how much did Southern Cyprus, with its GDP of EUR 17 billion lose to Greek banks? It lost EUR 23 billion!An amount of EUR 23 billion, from Southern Cyprus, which has a GDP of EUR 17 billion was received by the bankrupt Greek banks. That money is long gone. It has not gone because of Attila though, it is gone because of Iorgos.The Cyprus People’s Bank held 42 percent of its bonds in Greek bonds, while the Hellenic Bank held 1 percent and the Bank of Cyprus 34 percent. Southern Cyprus did not profit from the last year’s “haircut” in which Greece exchanged debts with foreign banks. Southern Cypriot banks, which held the bonds of bankrupt Greek banks lost out. The three banks named make up 97 percent of the finance sector of Southern Cyprus.Southern Cyprus, which is currently the term president of the European Union, has requested urgent aid from the very union it heads. Southern Cyprus, which is in the grip of a crisis is supposed to lead the struggle against the crisis in the Eurozone and the European Union.Southern Cyprus, which is one of the rare countries in the world which has the Communist Party in power, is struggling with unemployment. The unemployed, who are fleeing bankrupt Greece are hoping to find work in Southern Cyprus. On the other hand, the Southern Cypriot economy, which is in a crisis due to worthless Greek bonds, is experiencing contraction and a fall in employment. Southern Cyprus has an unemployment level of 10 percent. Meanwhile, youth unemployment stands at 29 percent. 40,000 people have lost their jobs in the last two years due to the economic crisis. The system in Southern Cyprus which ensures that pay is raised in line with the expense of living has been halted for two years and the prices of fundamental goods and services have risen by 50 percent. The economic crisis has seen the price of oil rise by 43 percent, electricity by 33 percent, LPG by 27 percent and food and other basic goods by 29 percent. The one piece of news, which shows how frightening the situation in Southern Cyprus is, regards refugees.According to the Politis newspaper from 2009, when the crisis began to be felt in Southern Cyprus, until April 2012, 860 refugees have withdrawn their refugee status application “due to unemployment, economic crisis and the new social conditions” and have left Southern Cyprus of their own accord. In previous years, not a single refugee had withdrawn their applications. There were nearly 10,000 applications for refuge in Southern Cyprus in 2004, while the number had fallen to 1,770 in 2011 and to just 510 in 2012.Although the Southern Cypriot youth may have been scared with stories of Attila their entire lives, it is due to Iorgos that they are now unemployed. They might find work due to Attila in the future, but it is certain that Iorgos will not provide for them for a century. International credit ratings agencies have lowered Southern Cyprus’ rating. The prevailing economic conditions in Southern Cyprus show that this will not be the only time. It is not only the banks which are in difficulty in Southern Cyprus. The country’s budget practices have also been unsuccessful. The European Central Bank, the IMF and the European Central Bank have once more joined forces, this time to look for a solution for Southern Cyprus, after having failed at saving every other European country. However, the task is more difficult than it looks. The European Central bank can only assist those banks which are experiencing liquidity problems but are structurally sound. The Southern Cypriot banks are not in this category. In other words, the three Southern Cypriot banks are as good as bankrupt.The Fileleftheros newspaper has reported that the Troika found the Southern Cypriot economy to be in worse shape than expected. According to the newspaper, the Southern Cypriot government is on the verge of being unable to pay public employees. Southern Cyprus will necessarily implement tough austerity measures. Among them are a reduction of public personnel, wage cuts, scrapping bonuses, cuts to pensions, a reduction of education and healthcare budgets and a lowering of public expenditure. Why all this? Was there a war with Attila which left the country devastated? Not at all; on the contrary, Attila is far away and Iorgos is close by. It is due to Iorgos that all this has happened. It is because Southern Cypriot banks collected individual savings and lent to Greece.All this goes on while the people of Southern Cyprus follow negotiations with Northern Cyprus and find comfort in news that Turkey will open its ports to Greek Cypriot shipping and statements calling for a halt to negotiations between the European Union and Turkey. If in a country of 850,000, 190,000 people live below the hunger line and 47,000 people are unemployed, according to the statement of DISI MP and Head of Committee for National Education Nikos Tornaridis; this can have little to do with the Cyprus talks or with Attila.