Angela Merkel said last year, if The Euro collapsed "there might not be peace
in Europe in sixty years"....Sounds like a threat...The Germans are sending out a clear message. Get your finances in order if
you want to be treated as a Eurozone member. There can be no sound money
unless and until all the member states of the Eurozone play by German
rules. Cyprus are disposable when it comes to German exports.
Strange how they didn't send out that message so clearly fifteen years ago
when Kohl rejected economic advice and insisted that Italy must be allowed to
join the euro on political grounds.
"Operation Self-Deceit: New Documents Shine Light on Euro Birth Defects Newly revealed German government documents reveal that many in Helmut Kohl's
Chancellery had deep doubts about a European common currency when it was
introduced in 1998. First and foremost, experts pointed to Italy as being the
euro's weak link." Well....
The eu allowed countries to break the entry conditions of joining the EZ.
They then allowed countires to break the ficsal stability pact that was suppoed
to hold everyone together. Germany were the first to break the deal, so you cant
blame the med countries from realising that the rules do not apply.
I do not support the incompetatance theory. The EU knew exactly what it was
doing. By providing enough rope the smaller weaker countries have been allowed
to hang themselves. If there was any real motive to have all the EZ countries
performing the EU would and should have stepped in long before the situation
became serious. They had the law in the terms of the treaties to force the med
countries to comply, but did not take any action. They are complicit in problem
that these countries face and are now taking advantage to destroy competition
and asset strip where they can.
Meanwhile : The central bank in Cyprus imposed a €100 a day withdrawal limit at cash machines for all local banks on Sunday to avert a run on lenders, as the island's leaders meet its international lenders for last-ditch talks to avert a financial meltdown.
Meanwhile : The central bank in Cyprus imposed a €100 a day withdrawal limit at cash machines for all local banks on Sunday to avert a run on lenders, as the island's leaders meet its international lenders for last-ditch talks to avert a financial meltdown.
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The eurogroup is not currently meeting, as the Cypriot president holds fresh talks with Van Rompuy and Barroso -- Ian Traynor reports from Brussels.
Reuters is now reporting that Cypriot President Nicos Anastasiades threatened to resign during a heated exchange with European Union and IMF officials this afternoon.
This confirms the rumours that engulfed Cyprus earlier this evening (see 6.39pm onwards).
Here's the full story from the terminal, by Luke Baker:
Cypriot President Nicos Anastasiades threatened to resign during a heated exchange with European Union and IMF officials over a rescue package for his country, a senior official taking part in the negotiations said on Sunday.
Anastasiades objected to a proposal that two Cypriot banks be shut down if Cyprus is to meet the terms of the bailout being offered by the EU and IMF, the official said.
"He offered to resign," the source said, describing the meeting, which included IMF Chief Christine Lagarde, European Central Bank President Mario Draghi, European Council President Herman Van Rompuy and other top officials, as tense.
The EU and IMF are offering Cyprus a 10 billion euro bailout package as long as the government can come up with 7 billion euros itself, largely through the restructuring of its banks, a process that will mean imposing a big levy on deposits over 100,000 euros.
Once full capital controls are imposed, a Euro in Cyprus will no longer be the same as a Euro anywhere else in the Euro area. It cannot leave the island. The Cyprus Euro will in effect be a new domestic currency. The imposition of capital controls in Cyprus is therefore the end of the single currency in its present form.
Yes, the Eurogroup will claim that it is "business as usual" in the Euro area. Draghi will continue to claim that the Euro is "irreversible". Eurostat will continue to produce statistics for E17 and E27 including Cyprus. But the reality will be that the Euro will be broken in two. There will be the Cyprus Euro, and the "mainland" Euro (if we can call it that).
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