At least that’s the hope of Ambrose Evans-Pritchard, a quasi-liberal writing for a clearly liberal British newspaper, the Telegraph. He called the stunt that was tried and failed, at least for the time being, of robbing people point-blank in daylight, saying that the banks need their money more than they do, could be the final straw. Not because Cyprus has all that much clout in the European Union – it is, after all, a very small island, with just a million people, generating just $25 billion an annual GDP – but because of the signal it sends to all the other EU nations whose people were persuaded that the promises made by politicians could be counted upon. One of them of course being that their funds were safe in their banks.
One’s first reflex is to gasp at the stupidity of the EU policy elites, but truth is that most EU officials handling the Cyprus crisis know perfectly well that their masters have just set the slow fuse on a powder keg – and they can only pray that it is slow…
The EU creditor states have at a single stroke violated the principle that insured EU bank deposits of up $100,000 will be guaranteed come what may…
Well, “may” has arrived, and the lie has been exposed:
They have demonstrated that the rhetoric of EMU solidarity is just hot air, that they will not force their own taxpayers to share a single cent of clean-up costs for the great joint venture of monetary union – in which northern banks, insurers, pension funds, and indeed governments, were complicit.
He thinks the desperate economic conditions in Spain, Italy and Portugal will trigger something similar as each tries to bail the other out of their difficulties. He thinks the best and ultimate answer is to take the EU apart, disassemble the puzzle pieces, and let sovereignty reign once again. He is optimistic:
The danger may not be immediate but if the economies of Portugal, Spain, and Italy languish through this year in deep slump with no green shoots of recovery starting to sprout in the second half – as many fear – this new dispensation will be tested. The fatal precedent of haircuts for depositors will start to matter a great deal. Hell hath no fury like a saver robbed.
I think Evans-Pritchard is excessively optimistic. The goal in Europe is political union as part of the plan to unite the world under global government. The powers-that-be aren’t going to let a few disgruntled depositors in Cyprus stand in their way.