German Finance Minister Wolfgang Schäuble said: "This is bitter for Cyprus, but we now have the result that the (German) government always stood up for"So now up to 40% of bank deposits above €100,000 will be expropriated to bail out Cypriot banks? But hey, at least Schauble got what he wanted. No matter that 70% of Cypriots work in finance and this is going to annihilate the island's banking system and cause widespread unemployment and poverty. The damage will certainly not be restricted only to Cyprus. Anybody considering parking significant funds in a Eurozone bank will require industrial quantities of misplaced optimism after the alarming precedent set in Aphrodite's birthplace. An exodus of expat capital from PIIGS, who are in desperate need of foreign investment, is inevitable. Meanwhile Medvedev compares the Troika to the Bolsheviks:'the stealing of what has already been stolen continues'... The seemingly clumsy phrase was in fact a sharp reference to a quote attributable to Vladimir Lenin, who used it to justify the confiscation of capitalists’ property Cyprus. Make a desert. Call it Peace. All hail the Troika:This is what Christine Lagarde, managing director of the International Monetary Fund, had to say overnight about the Cypriot settlement. “We believe the plan provides a durable and fully financed solution to the underlying problems facing Cyprus and places it on a sustainable path to recovery". How anyone could make such a statement with a straight face is a mystery to behold, for none of its claims bear scrutiny. Durable? How can this be durable when it offers no way out of the economic ruin that the single currency has visited on the island? Nor is there a snowball’s chance in Hades of the Cypriot economy being able to shoulder even this comparatively limited addition to the national debt. Further significant default at some stage in the future already looks inevitable. Sustainable path to recovery? Yes sure, if you count an immediate 5-10 per cent collapse in output and massive surge in unemployment as a sustainable path to recovery.... Jeremy Warner http://blogs.telegraph.co.uk/finance/jeremywarner/100023690/...
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