Wikipedia nails it: “Cyprus is an island country in the Eastern Mediterranean Sea, east of Greece, south of Turkey, west of Syria … the third largest island in the Mediterranean Seas, and is a member state of the European Union.” My emphasis is to make the point that that’s why they are in trouble and are asking for a bailout from the EU.
They benefitted greatly when they joined the EU in 2004 with cheap money available for government projects, all in the name of “stimulating the economy.” Now they’re in trouble, they can’t pay their bills, and they need help. In exchange for such “help” they’re willing to drill their hapless inhabitants with higher taxes along with political control. It’s all part of the plan.
Cyprus needs up to 17 billion euros ($22 billion) – almost as much as its annual gross domestic product – in emergency loans, mostly to recapitalize its oversized banking sector, hit by a Greek debt restructuring, but also to service debt and government expenses.
Part of the deal is to get assurances from Russia that they will be glad to help fund the bailout, but with certain provisos:
Cypriot President Nicos Anastasiades is to travel to Russia to meet President Vladimir Putin in the coming weeks to discuss possible Russian help, officials said. He will seek a 5-year extension of an existing Russian loan to Cyprus of 2.5 billion euros that matures in 2016 as well as a reduction in the 4.5 percent rate of interest.
Reuters makes it sound like he’s just going to the bank to renew a loan and, oh by the way, add on a little more just to get over the hump. But Nicos Anastasiades has no idea who he’s dealing with, or else he wouldn’t be so willing to fly up to Moscow to meet with Putin. Putin worked for the KGB for sixteen years. He rose through the ranks to become a Lieutenant Colonel. You don’t get there by being nice to people.
The quid-pro-quo is quite simple: Putin and the EU want more taxes placed on the island’s inhabitants just to make sure that the loans get paid back. Actually, they don’t want the loans to be paid back. All they want is the interest on the loans, and the leverage that those loans give the EU and Putin politically over Cyprus.
Here’s the deal: raise corporate taxes, introduce a capital gains tax, and institute a financial transaction tax (see Tobin Tax), and the deal is sealed. There’s no way Cypriots will be able to pay it back: $22 billion is equal to one year’s GDP, and that doesn’t count the previous loans that Cyprus can’t pay back.
It’s all part of the plan. In 2004 John Perkins wrote “Confessions of an Economic Hit Man” which he followed with “The Secret History of the American Empire: The Truth About Economic Hit Men, Jackals, and How to Change the World.” The idea is simple: invite naïve customers to get so far in debt that you own them. Here’s a summary of the strategy. Keep in mind that this summary has to do with the United States and the World Bank, but the strategy is the same:
In the most common scheme, staffers would identify a developing country possessing resources our [US] corporations desired (eg. oil), arrange a huge loan for it, and then direct most of the money to our own corporations and a few collaborators. Infrastructure projects (eg. power plants, airports, industrial parks) would then spring up – however, they seldom helped the poor, and the nation was unable to be able to repay the loan [only] about 50-60% of the time. The [economic hit men] could then demand eg. cheap oil, U.N. votes on key issues, and/or troops for eg. Iraq.
Reuters says that once Anastasiades returns from his trip to see Putin, the rest is just details:
Euro zone finance ministers pledged this week to agree a bailout for Cyprus by the end of March, but details of how the rescue will be financed are yet to be sorted out.
It’s too bad that Anastasiades hasn’t read Genesis 25: 29-34 or he would know about Esau.