Grand Theft Cyprus
by Stephen Lendman
Plan A failed. Watch for Plan B.
Cyprus is tiny. Its population numbers about a million. Its GDP is miniscule by Western standards. It's 0.2% of Europe's economy. It's entrapped under Eurozone straightjacket rules.
They impose financial tyranny. Dissimilar countries surrender monetary and fiscal control. Doing so abandons effective ways to combat recessions.
They can't devalue their currencies to make exports more competitive. They can't print money freely. They can't spend, spend, spend.
Euro policy expert Bernard Connolly explained more.
His 1995 book titled, "The Rotten Heart of Europe: The Dirty War for Europe's Money" called the euro system a harebrained idea. It's doomed to fail, he predicted.
He's considered the foremost European economic, monetary, and political integration expert.
Before the euro's 1998 introduction, he said one or more of Europe's weakest countries would face rising budget deficits, troubled economies, and a "downward spiral from which there is no escape unaided."
"When that happens, the country concerned will be faced with a risk of sovereign default."
In 1979, Europe's Exchange Rate Mechanism (ERM) was introduced. It's part of the European Monetary System (EMS). It was intended to propel the continent to one European currency unit (ECU).
ERM never worked. ECU failed. Connolly's views were prescient. His book explained.
His "central thesis is that the ERM and the EMU (European Monetary Union, the mechanism which ultimately brought the Euro into technical existence) are not only inefficient but also undemocratic: a danger not only to our wealth but to our freedom and ultimately, our peace."
"As we shall see, in France, the long arm of the authoritarian state pressurized dissident economists and bankers, deployed financial information programs on international TV channels, threatened securities houses with loss of business if they questioned the official economic line, and shamelessly used state-owned and even private-sector banks, in complete contradiction with their shareholder's interests and Community law, to support official policy."
"The economic profession in Europe organized literally hundreds of conferences, seminars and colloquia to which only conformist speakers were invited; and the Commission's 'research' programs financed large numbers of economic studies to provide the right results from known believers."