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View Diary: BREAKING NEWS: Parliament of Cyprus Rejects "Bailout," Bank "Haircut" (143 comments)

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  •  So you think the people want to default? (0+ / 0-)
    •  Another false dilemma (14+ / 0-)

      Seriously, are you from Merkel's press office?  It's not black or white.  It's not "accept this or default."  That's what the EU was threatening Cyprus with this week.  Their bluff was called.

      By popular demand, here's a few solutions that are applicable to Cyprus, Greece, and other austerity-ravaged countries:

      - Actually prosecute and jail the corrupt politicians from all parties who have any responsibility at all for their countries' current economic woes.

      - Actually prosecute and jail the corrupt and criminal banksters who have any responsibility at all for helping bring about this economic crisis.  

      - Seize the illegally obtained assets of all of the above, no matter where they may be held.

      - Form an independent commission in each country that will investigate the totality of the debt, and immediately write off any debt that is found to be odious (illegitimate).

      - Form an independent commission in each country that will investigate all of the criminal austerity measures and the decisions that were taken which implemented said members.  Prosecute and jail anyone and everyone responsible.

      - If necessary, declare a temporary stoppage of payments on all legitimate debt.  Declare a national state of emergency and pour all available national resources towards helping to restore the economy, instead of to pay interest.

      - Renegotiate the payment terms for all legitimate debt, take it or leave it.

      - Actually give the people a say in their country's financial future, openly and democratically, with an informed national dialogue that is free of blackmail and scaremongering.  Just as they did in Iceland.  How's that for a novel concept?

      - Build up as much foreign currency reserve as possible and return to a national currency, after first formulating a careful plan.  Utilize Euros as part of those foreign currency reserves.  For more details about how this can happen, an interview with economist Dimitris Kazakis (who, by the way, predicted back in December what would happen in Cyprus) is in order: (interview in Greek with translation into English).

      Economists such as Kazakis and Costas Lapavitsas, among others, have provided far more informed analyses as to how all of the above may be achieved.  I recommend looking them up.

      •  Reading your source (4+ / 0-)

        Costas Lapavitsas  writes approvingly:

        Iceland followed a radically different path, as it is free of the troika and not a member of the EMU. It refused to increase its national debt and it thus let banks go bankrupt, shifting the costs on to shareholders, bondholders and depositors abroad. Iceland looked after small depositors, but also allowed its currency to devalue and applied capital controls. The country avoided a deep and protracted recession, and last year the economy grew at 2.5%.
        emphasis mine.

        So the part of the now-scuttled deal that most goes along with Costas Lapavitsas ideas is the part where depositord get the haircut! With the only exception - a poison pill - that it had no "small" depositor safety offcut limit.

        Whereas the part of the EU-cyprus deal that goes most against your economist is where the EU uses 10 billion of european public money to bail out the banks - "In effect, the costs of failed banks were brazenly shifted onto society as a whole", as he calls it for Ireland.


      •  Exactly (3+ / 0-)
        Recommended by:
        mrkvica, yoduuuh do or do not, neo11

        Never understood why in the world this is presented as an all-or-nothing, binary choice between two outrageous, unacceptable alternatives- default vs. utterly screwing over small depositors and shaking faith in the banking system in general (all for the benefit of a few well-connected bankster gangsters).

        As neo11 points out here, a constructive solution is simple, straightforward and far more beneficial to all parties involved. First go after the corrupt 1%ers who are responsible for this, including the corrupt ultra-rich (aka the Cypriot Mitt Romneys) who've been evading their obligations. Seize their assets, and make it clear that the EU law is with the people, not the banksters.

        Even if Cyprus doesn't leave the Eurozone itself- since the prior corruption by Cyprus's 1%ers wouldn't inspire much confidence (or solvency) in Cyprus's own currency- the solution is that the Euro must be turned into a national currency itself for all the Eurozone members, that is, a liquid instrument that allows all of the EU countries to effectively be sovereign in the currency.

        In practice of course, on an economic level, this would in many ways convert the EU states into something like the American states, which although they can't print dollars themselves, are nonetheless able to denominate their debts in what is their own (collectively) sovereign currency, with backing from the federal government itself (whatever the EU's equivalent is).

        And above all, Angela Merkel has to go. She's become ridiculously obsessed with the austerity nonsense and seems incapable of grasping basic macroeconomics. One of the most blindingly simple concepts from Econ 101 is that the entire global economic and financial system depends on people's trust that their bank deposits will be fully honored, thus innovations like e.g. the FDIC. That Merkel doesn't get this (or that she's made herself a tool of powerful banksters) means that she's no longer even pretending to be a representative of the people, her won or any other in the EU.

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