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Well, a run on the banks, the imposition of capital controls in a eurozone country and the ground cut from under its economy.
Some ‘bailout’. Some ‘partners’. Exiting the euro would have been costly for Cyprus. But not nearly as costly as remaining in a currency union now marked by the exercise of brute economic power and political hegemony.
The ‘Troika’ — peddlers of myths — leaned on Cyprus to such an extent that one of its most senior figures asserted that leaving the euro would have required Cyprus to leave the EU. Who could have peddled that myth?
It was hardly in the best interests of the Cypriot people that were at the heart of the pressure exerted on them by the Troika. It was, in fact, the self-serving interest of Germany and its institutional satellites, which had much to lose from an exit by Cyprus.
Still, Cyprus could have left — it was not ‘unthinkable’ and it is bad economics to suggest otherwise. The strength of an economy and its currency ultimately depends on its resources and the credibility of policies to leverage these resources. What is being imposed on Cyprus and the peripheral countries lacks all credibility.
The fact that the crisis is still metastasising after five years demonstrates that ‘Troikanomics’ simply has not worked. Exit would, in the medium term, be less damaging for countries impaled on the eurozone’s ‘one size fits all’ policy— one that is wholly lacking in symmetry between the strong and the vulnerable.
The debacle recalls The Eagles’ nightmarish ‘Hotel California’ where “you can check out anytime you want/ But you can never leave.’’
The Troika are not accountable to the peoples of the eurozone —and yet it continues to cut economies, and countries, off at the knees.
Italy should be afraid—the treatment of Cyprus is a shot across their bows too.
Professor Ray Kinsella
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