6 ms·

> Greek's insolvency impacted Cyprus greatly, because a large portion of the Cyprus population are of Greek descent. Just to add a little context to this. Cypr

by iuguy 14y ago

> Greek's insolvency impacted Cyprus greatly, because a large portion of the Cyprus population are of Greek descent. Just to add a little context to this. Cyprus is a divided country, as a result of a conflict in 1973 between Turkish Cypriots (and Turkey) and Greek Cypriots (and Greece). The Greek Cypriots favoured unification with Greece (Enosis) whereas the Turkish minority felt threatened by this (due to various times in which sectarian violence had spread on the Island, and also due to fears of reprisals for anti-greek pogroms in mainland Turkey). The whole thing is really complicated and basically no-one wins. Fast forward to 2004 and a referendum is held on whether Cyprus should unify. The Turkish north votes yes, the Greek south votes no and Cyprus enters the Euro leaving Northern Cyprus out in the cold. The people with over 100k Euros that are being affected the most aren't the Russian depositors but older Cypriots who rode the tourist property boom. There was a vote on this and it was turned down, and then the Troika (of the Eurozone countries, ECB and IMF) decided they'd sidestep the whole thing and re-arrange the country's banking system for them. The amount the troika were looking for was not a great deal of money to the EU or IMF, about €6 billion. This represents less than the amount spent on administration or internal policies in the last budget, and would be less than a fifth of the Common Agricultural Policy (CAP) budget. This figure was also arbitrarily decided by the troika not based on what Cyprus could actually afford (given the size of it's collapsing economy) but for political reasons because it's politically unacceptable for Germany to be seen by Germans to provide no strings bailouts to another Greece, and the IMF wanted to restructure Cyprus' banking system. The big problem is that with this intervention it sets two extremely dangerous precedents. The first is that exiting the Euro (which would've been better for Cyprus) is not an option for bankrupt Eurozone countries. It's not even on the table. The second is that what's happened in Cyprus this week can happen in Greece, Italy, Spain, Portugal, Luxembourg (where the real Russian money is) or Ireland next week or at any point in the future, and as Shenglong said, banks are the major savings depository for most of Europe. If that doesn't scare my American friends then nothing will.

coldtea 14y ago
>Fast forward to 2004 and a referendum is held on whether Cyprus should unify. The Turkish north votes yes, the Greek south votes no and Cyprus enters the Euro leaving Northern Cyprus out in the cold. This sounds like a mysterious outcome, given what you said above, but one can add that the "unification plan" was to create an old-style colonial protectorate, which, besides giving foreign powers the power to meddle with the new "state" affairs, gave equal political power to the Turkish minority (the majority of which came post-invasion in order to take control of the Turkish side) and to the Greek majority (instead of using legitimate elections). And of course it didn't address any of the violations of lots of UN rulings by the occupying force. So mainly it was just perpetuating the occupation and the injecting, and saying "ok, now you both have half-half stakes at a new country".
- iuguy 14y ago
  As I said, it's all really complicated and no-one wins. In the end Cyprus loses, Greek Cypriots lose and Turkish Cypriots lose too.
danmaz74 14y ago
You forget that Cyprus' banks are bankrupt because the did bad investments; it's not as if "the IMF wanted to restructure Cyprus' banking system" because they woke up one morning and just felt like that.
- iuguy 14y ago
  I didn't mention it because the previous poster made a very valid point about ethnic Greeks speaking Greek next to Greece investing in Greek assets. However there was no reason as to why a country with such a small economy should come up with an arbitrary 6 billion euro for a 10 billion euro bailout beyond forcing political will over a small country to send a signal to others. If you need 10 billion euros, you're not going to be able to find a quarter of your peak GDP at a time that your banks are screwed by yourself.
  - danmaz74 14y ago
    Unless there are very very big deposits in your banks relative to your GDP... I'm not saying that this solution is ideal or "really fair", but when you deposit your money in a bank that gives very high interests compared to other banks in the same currency, you should know you're assuming higher risks. And it isn't fair that if everything goes well you keep the interests, if it goes bad someone else pays for the risk.
    - iuguy 14y ago
      > And it isn't fair that if everything goes well you keep the interests, if it goes bad someone else pays for the risk. If you sincerely think that Cyprus doesn't set a precedent putting everyone in the Eurozone at stake you're wrong. My issue isn't that Cyprus should or shouldn't receive a bailout, it's the undemocratic way the Troika have gone about it and the punitive requirements foisted on them for a bailout when they knew full well that Cyprus didn't have the money. I'm bookmarking this in the hope that Italy never gets screwed over the same way.
      - mafribe 14y ago
jacquesm 14y ago
Cyprus is historically a part of Greece but on a map it is closer to Turkey, Syria, Lebanon, Jordan, Israel and even Egypt. It is just like the Falklands in that respect, an outpost of one nation that is going to be geographically contested and eventually (just like the Falklands) it will probably be annexed by one of the countries above (most likely Turkey). The only reason these situations persist is because the nations involved are still able to wage war at a distance, if Greece should go bankrupt (or even if the Greek-Cypriot part of Cyprus would go under) there would likely be a re-alignment of interests such that the cost of maintaining the outpost by force no longer outweighed the benefits. Cyprus is also one of the reasons why Turkey has not been added to the EU, and why their relations with Greece are as poor as they are. If Greece and/or Cyprus would end up being unable to maintain the status of the Greek portion of Cyprus Turkey would have to weigh the advantages of going all in on Cyprus versus the disadvantages of cutting a lot of ties with the EU, which arguably has been stringing along Turkey with the promise of membership without the intention of actually following through on that promise for a very long time now. Turkey is a very important country in the sense that it is the European gateway to the middle east, it has been instrumental as an ally in many military operations over the last two decades and there are large numbers of Turkish emigrants living all over Europe, which means any decision going against Turkish interests has the possibility of mobilizing a substantial number of people in other member states. But there are a large number of member states that do not actually wish Turkey to join the EU on equal terms, at the same time they don't want to see Turkey join the middle-East.
- iuguy 14y ago
  > Cyprus is historically a part of Greece but on a map it is closer to Turkey, Syria, Lebanon, Jordan, Israel and even Egypt. Actually aside from a small part of the Bronze Age, Cyprus was never a part of Greece. It had been Ptolemaic Egyptian, Byzantine and changed hands between Knights Templar and various others before becoming Venetian then finally succumbing to Ottoman invasion in the 1570s. The Ottomans leased Cyprus to the British in exchange for guarantees of support against Russian invasions of the Ottoman Empire, but the successor state of the Republic of Turkey relinquished all claims to Cyprus, leaving it a British Crown Colony. Many of the Turkish Cypriots originally came in the Ottoman period and the idea of Enosis was formed under Greek nationalism (Hellenism had been promoted throughout Cyprus long before modern Greece's existence) during this period before and just after the Greek independence war. It is this, the subsequent neglect and the approach taken under British rule (and subsequent independence) that led to the problems of a divided Cyprus today. In this respect, it is absolutely nothing like the Falklands whatsoever. If anything, the situation between Greece, Turkey and Cyprus is more like the situation between the UK and Ireland with respect to Northern Ireland. Modern Turkey has no interest whatsoever in annexing Cyprus, only protecting ethnic Turks (which it is bound to do by it's constitution). > The only reason these situations persist is because the nations involved are still able to wage war at a distance, if Greece should go bankrupt (or even if the Greek-Cypriot part of Cyprus would go under) there would likely be a re-alignment of interests such that the cost of maintaining the outpost by force no longer outweighed the benefits. You're really off the mark here. Greece in general has no interest in enosis. It's generally been something pushed by Greek nationalists both in Cyprus and Greece but both countries have their own problems at the moment that wouldn't be solved by unification with each other. To be clear, Greece and Turkey were both dragged into conflict because of the Treaty of Guarantee agreed in Zurich, making Turkey, Greece and Britain the guarantors of certain elements of Cyprus' status as an independent country. > If Greece and/or Cyprus would end up being unable to maintain the status of the Greek portion of Cyprus Turkey would have to weigh the advantages of going all in on Cyprus versus the disadvantages of cutting a lot of ties with the EU, which arguably has been stringing along Turkey with the promise of membership without the intention of actually following through on that promise for a very long time now. Turkey would not go all in on Cyprus. They don't want a war. To be honest if TRNC told Turkey they wanted to join Cyprus, I'm sure Turkey would welcome it with open arms. Turkey wants whatever the people of TRNC want, just as the UK would support whatever decision Northern Ireland would make on self determination. As for EU membership, I go to Turkey quite often and I've seen no interest in EU membership for a very long time at the political and street level. Most Turkish businesses like the common market but don't see why Turkey should join the Euro (and think they've dodged a bullet), and resent France's anti-Turkish posturing.

by iuguy 14y ago

coldtea 14y ago

>Fast forward to 2004 and a referendum is held on whether Cyprus should unify. The Turkish north votes yes, the Greek south votes no and Cyprus enters the Euro leaving Northern Cyprus out in the cold. This sounds like a mysterious outcome, given what you said above, but one can add that the "unification plan" was to create an old-style colonial protectorate, which, besides giving foreign powers the power to meddle with the new "state" affairs, gave equal political power to the Turkish minority (the majority of which came post-invasion in order to take control of the Turkish side) and to the Greek majority (instead of using legitimate elections). And of course it didn't address any of the violations of lots of UN rulings by the occupying force. So mainly it was just perpetuating the occupation and the injecting, and saying "ok, now you both have half-half stakes at a new country".

iuguy 14y ago
As I said, it's all really complicated and no-one wins. In the end Cyprus loses, Greek Cypriots lose and Turkish Cypriots lose too.

danmaz74 14y ago

You forget that Cyprus' banks are bankrupt because the did bad investments; it's not as if "the IMF wanted to restructure Cyprus' banking system" because they woke up one morning and just felt like that.

iuguy 14y ago
I didn't mention it because the previous poster made a very valid point about ethnic Greeks speaking Greek next to Greece investing in Greek assets. However there was no reason as to why a country with such a small economy should come up with an arbitrary 6 billion euro for a 10 billion euro bailout beyond forcing political will over a small country to send a signal to others. If you need 10 billion euros, you're not going to be able to find a quarter of your peak GDP at a time that your banks are screwed by yourself.
- danmaz74 14y ago
  Unless there are very very big deposits in your banks relative to your GDP... I'm not saying that this solution is ideal or "really fair", but when you deposit your money in a bank that gives very high interests compared to other banks in the same currency, you should know you're assuming higher risks. And it isn't fair that if everything goes well you keep the interests, if it goes bad someone else pays for the risk.
  - iuguy 14y ago
    > And it isn't fair that if everything goes well you keep the interests, if it goes bad someone else pays for the risk. If you sincerely think that Cyprus doesn't set a precedent putting everyone in the Eurozone at stake you're wrong. My issue isn't that Cyprus should or shouldn't receive a bailout, it's the undemocratic way the Troika have gone about it and the punitive requirements foisted on them for a bailout when they knew full well that Cyprus didn't have the money. I'm bookmarking this in the hope that Italy never gets screwed over the same way.
    - mafribe 14y ago

jacquesm 14y ago

Cyprus is historically a part of Greece but on a map it is closer to Turkey, Syria, Lebanon, Jordan, Israel and even Egypt. It is just like the Falklands in that respect, an outpost of one nation that is going to be geographically contested and eventually (just like the Falklands) it will probably be annexed by one of the countries above (most likely Turkey). The only reason these situations persist is because the nations involved are still able to wage war at a distance, if Greece should go bankrupt (or even if the Greek-Cypriot part of Cyprus would go under) there would likely be a re-alignment of interests such that the cost of maintaining the outpost by force no longer outweighed the benefits. Cyprus is also one of the reasons why Turkey has not been added to the EU, and why their relations with Greece are as poor as they are. If Greece and/or Cyprus would end up being unable to maintain the status of the Greek portion of Cyprus Turkey would have to weigh the advantages of going all in on Cyprus versus the disadvantages of cutting a lot of ties with the EU, which arguably has been stringing along Turkey with the promise of membership without the intention of actually following through on that promise for a very long time now. Turkey is a very important country in the sense that it is the European gateway to the middle east, it has been instrumental as an ally in many military operations over the last two decades and there are large numbers of Turkish emigrants living all over Europe, which means any decision going against Turkish interests has the possibility of mobilizing a substantial number of people in other member states. But there are a large number of member states that do not actually wish Turkey to join the EU on equal terms, at the same time they don't want to see Turkey join the middle-East.

iuguy 14y ago
> Cyprus is historically a part of Greece but on a map it is closer to Turkey, Syria, Lebanon, Jordan, Israel and even Egypt. Actually aside from a small part of the Bronze Age, Cyprus was never a part of Greece. It had been Ptolemaic Egyptian, Byzantine and changed hands between Knights Templar and various others before becoming Venetian then finally succumbing to Ottoman invasion in the 1570s. The Ottomans leased Cyprus to the British in exchange for guarantees of support against Russian invasions of the Ottoman Empire, but the successor state of the Republic of Turkey relinquished all claims to Cyprus, leaving it a British Crown Colony. Many of the Turkish Cypriots originally came in the Ottoman period and the idea of Enosis was formed under Greek nationalism (Hellenism had been promoted throughout Cyprus long before modern Greece's existence) during this period before and just after the Greek independence war. It is this, the subsequent neglect and the approach taken under British rule (and subsequent independence) that led to the problems of a divided Cyprus today. In this respect, it is absolutely nothing like the Falklands whatsoever. If anything, the situation between Greece, Turkey and Cyprus is more like the situation between the UK and Ireland with respect to Northern Ireland. Modern Turkey has no interest whatsoever in annexing Cyprus, only protecting ethnic Turks (which it is bound to do by it's constitution). > The only reason these situations persist is because the nations involved are still able to wage war at a distance, if Greece should go bankrupt (or even if the Greek-Cypriot part of Cyprus would go under) there would likely be a re-alignment of interests such that the cost of maintaining the outpost by force no longer outweighed the benefits. You're really off the mark here. Greece in general has no interest in enosis. It's generally been something pushed by Greek nationalists both in Cyprus and Greece but both countries have their own problems at the moment that wouldn't be solved by unification with each other. To be clear, Greece and Turkey were both dragged into conflict because of the Treaty of Guarantee agreed in Zurich, making Turkey, Greece and Britain the guarantors of certain elements of Cyprus' status as an independent country. > If Greece and/or Cyprus would end up being unable to maintain the status of the Greek portion of Cyprus Turkey would have to weigh the advantages of going all in on Cyprus versus the disadvantages of cutting a lot of ties with the EU, which arguably has been stringing along Turkey with the promise of membership without the intention of actually following through on that promise for a very long time now. Turkey would not go all in on Cyprus. They don't want a war. To be honest if TRNC told Turkey they wanted to join Cyprus, I'm sure Turkey would welcome it with open arms. Turkey wants whatever the people of TRNC want, just as the UK would support whatever decision Northern Ireland would make on self determination. As for EU membership, I go to Turkey quite often and I've seen no interest in EU membership for a very long time at the political and street level. Most Turkish businesses like the common market but don't see why Turkey should join the Euro (and think they've dodged a bullet), and resent France's anti-Turkish posturing.