Kings of Brussels may empty their fiefdoms

The other day, a European politician suggested the integrity of the euro was being called into question by the troika’s response to the crisis in Cyprus.

He fell short. The integrity of the EU is being called into question.

It is clear that the citizens of EU member states are simply cannon fodder to be used and abused as required by the needs of those ‘masters of the universe’, the international financiers and bankers. The euro, the illegitimate offspring design of the denizens of the Berlaymont and Frankfurt, is to be saved at all costs, irrespective of the implications for the citizenry. Rather than go after the gamblers who made billions and, worse still, those who lost billions of others’ money, they and the IMF have decided that the ordinary citizens of Europe must pay.

In the case of Cyprus, its government blinked first. Agreement, under the threat of total bankruptcy, has been finally reached between the lame-duck Nicosia government and the troika on the basis for a bailout. In some respects, it is better than the one put on the table last week. Thankfully, at least the small savers are not being gouged. Unfortunately, that is cold comfort because of the precedent created.

It has reluctantly been agreed to take somewhere up to €5bn from those customers with more than €100,000 on deposit in the Laiki Bank. That would appear to be a gouging up to 50% of depositors’ savings. This bank is apparently a total basketcase and is effectively to be wound up into a good bank and a bad bank.

However, those with savings of over €100,000 in the Bank of Cyprus are to have their accounts temporarily frozen so they, too, can be raided if the Laiki Bank raid does not give up enough goodies. However, it is not just Russian oligarchs and mafiosi who have over €100,000 on deposit. Many thousands of Cypriots are now going to have their life savings, their savings for retirement and old age, their nest eggs, saved over many years, robbed to pay for the sins of others.

It has been argued again and again that Cyprus is a special case and that similar circumstances do not exist elsewhere. After all, where else have the banks grown to many multiples of the domestic economy? Our politicians and those in Europe have insisted it will not happen elsewhere, but we all know what a politician’s word is worth.

So far we have had claim and counter-claim as to which genius came up with the idea to raid ordinary citizens’ and depositors’ accounts. Suffice to say that, whoever did come up with the idea, it was agreed to by the others.

Given the number of bailouts we have had to date, it would appear that those who come up with the bailout rules are flying by the seat of their respective pants and hoping that it will all be alright on the night. However, this time, they have gone too far.

Given the lame way that the EU has dealt not just with the Cypriot financial collapse but also with other parts of Europe, it’s anyone guess what is to happen next. Suffice to say that, rather than accept the word of politicians that this was a once-off, people in other dodgy economies will be taking measures to protect the few bob that they have. Clearly, property rights are not for the ‘little people’.

Those with serious money and inside knowledge will have — or already have — moved their money into safer environments — anywhere outside the EU.

Those without that inside knowledge will simply take their money out and keep it anywhere from the grasp of our governments, even if it means keeping it under the mattress. Will it bring down the euro? It will certainly raise all sorts of question marks over it. And if the euro collapses, will the EU follow soon thereafter, as others discover that those who would be kings in Brussels are not the geniuses that they pretend to be?