ARBITRARY EURO-CONFISCATION. GERMAN DICTAT AND THE CYPRUS DISASTER
Fascism is about State POWER, arbitrary power. Nothing is more arbitrary than to take from personal bank accounts CASH at a SPECIFIC but ARBITRARY point in time.
But what is “fate” for the German State is always fatal for everyone else.
The evil of the German inspired confiscation of bank deposits in Cyprus is NOT that it is a wealth tax (because it is NOT) but that it is a CASH tax – and CASH AT A PARTICULAR MOMENT IN TIME which is totally unrelated to wealth.
A Billionaire with 90,000 Euros in a Cyprus Bank lost nothing. A small trader with 150,000 to pay his staff lost thousands. A man with a million Euro house lost nothing but a man who had just sold his million Euro house lost at least 400,000 Euros.
A man with a million Euro debt just raised from a bank and put in that bank in cash lost at least half of it even though his NET position (his cash minus his loan) was ZERO.
A man who had just sold 500,000 Euros of shares in order to, say, give his children money to buy a house lost at least 200,000 Euros.
Company A which had just paid an invoice for materials bought from company B for 500,000 Euros would pay nothing (although he has stock of that value) but company B which has received the cash will lose at least 200,000 Euros.
Indeed by signalling to those in power the probability of the cash confiscation occurring major companies and rich individuals were able to escape before the axe fell. The Cyprus National Electricity Authority withdrew its entire Cyprus Bank holding of Euro 19.5m just in time! A classic case of the arbitrary power of corporatist State fascism.
For the first time within a currency there are two regimes, indeed two Euros! The Cyprus Euro is worth less than the Euro elsewhere because it has been debased and cannot be moved abroad. But for those who got out quick the exact opposite applied. They were greatly aided by the Euro being valid without devaluation throughout the Euro-zone and EU rules ensured no capital controls were applied!
Of the many buffoonish utterances of German and EU “leaders” about this crisis the absurd and dangerous Jerom Dijsselbloem was the worst when he said the cash theft was a “model” for future bail-outs! The new paradigm for bank rescues, now that (after the first crisis) Governments are now bankrupt is that Banks are responsible and their shareholders and their bond holders have to carry the can for the mistakes – because they can stop the stupidity before it happens and therefore must bear the cost when it does. Fair enough. They can make alternative investments. But bank depositors, as in Cyprus, could hardly put their money anywhere else – it is in fact illegal to open an account in another country if you don’t live there! (So much for the “country called Europe”!!!)
The disgraceful role of German politicians in this debacle must not be forgotten. Their aim was to rescue their own finances and the German Euro, not Cyprus. Germany was the second biggest lender to Cyprus with German banks placing nearly 6billion Euros there. Germany would also have lost billions in Portugal, Spain, Italy, Ireland and Greece if Cyprus had collapsed.
German insistence on private bond holders losing in the Greece rescue meant the loss to Cyprus of 25% of its annual GDP. Having accused Cyprus of being a haven for Russian mobsters the German Finance Minister then admitted he had no proof for such an accusation. And it turns out that Luxembourg has a massively greater exposure to foreign “wealth management” (20 times GDP) than Cyprus.
An agreement in November 2012 (Memorandum of Understanding) from the international Troika negotiating with Cyprus was vetoed by the German Finance Minister Wolfgang Schaeuble so valuable time was lost. That MOU would not have demanded a deposit robbery nor indeed a Cyprus national contribution to its own rescue of 5.8 billion Euros. It was the Germans who demanded those – in breach of the Europe wide Deposit Insurance Guarantees.
As in the whole EU saga and the Euro disaster the driving force is the German political class, knowing that their own people (not understanding anything of what has happened to other countries nor why) will tend, despite their own rejection of the Euro, to demand “German discipline” from other members. The truth is that the “points were set” many decades ago and German politicians are blindly pursuing their “Schicksal” as Hitler and then Helmut Kohl used to say. But what is “fate” for the German State is always fatal for everyone else.