Cyprus European Union and the return of the Middle Age

A week was passed but we are stupefied with the events happened in Cyprus. Euro-group wants to pay Cyprus citizen part of rescue of their banks from their bank deposits. Today (25/3/13) at last there are a solution of problem, or so it seems. BCE pressure with to close credit line at Cyprus banks, Cypriot parliament refuses to make pay citizens the bankruptcy, Cyprus's government tries to sell the soul in Russia if UE turns back, and Euro-group saw that it just jump by a precipice where the end of which there is always a crash. Final solution tries to maintain alive Cyprus and getting hurt in the attempt, but it could avoid the markets down and capital flee.

 

Cyprus is failure. This was evident a year ago where its banks, over-dimensioned for the size of the country, experienced the pardon of a portion of the Greek debt. This may be a perfect excuse but not so sure if the Greek state can pay what it owe, even the pardon of part of the debt; so certainly the end result would have been the same or worse without reducing. Finally like all the states within the EU have failed due to the rescue. But to get the ransom money should be put guarantees, but Cyprus only has a weight of 4,800 M €, including natural gas deposits, and the rest to 10,000 M € has to provide other one. Public debt when state is rescuing is discarded, and the only solution that thought EU is to take the money from savers bank deposits.
Cyprus is a peculiar land. Even to belong to the Eurozone, it still having a glamorous as financial paradise. It having banking exaggerated by the size of the country due to foreign deposits that they are the majority of the money that this measure would take. Switzerland also has an oversized banking sector; but unlike Cyprus, this is a country with a strong agricultural sector, a powerful industry, quality tourism consolidated, energy sources and the seat of multinational global icons. In Switzerland a bank shock would do hurt, but behind there is a country that can reverse the situation, which Cyprus without their banks would be Greece in poor. We should not be surprised that in this unusual decision to take the money of savers has played an important role the fact that most of the money is foreign; which makes it even more stupid decision, because the day that banks reopen foreign money remaining will move to safer places becoming in spurious the sacrifice do it today.
But more worrying is the decision itself. EU guarantees deposits up to 100,000€. They hadn’t to do it, in fact it has the power to tax the money on deposit, and not only that they can impose a tax of 100% of the assets and income. But you cannot do is change the rules in middel game and less legislate in form retroactively.
Let me give an example: Suppose that some people consider opening a public park and decided not to charge entry in it. But when a year has passed, they realize that the costs are unsustainable and decide to put post, something logical. So one morning put a poster at the entrance warning of to start to pay for entry. But what isn’t done without notice to put the ticket office and forced who is into to pay the ticket or fine if they haven’t; and less they search everyone who has entered and they charge them or their heirs in case of death, the entry every times that they are entered.
All people act in accordance with the rules in force at the time. If these savers had said that money was not insured they might have spent on other things or hidden under a tile, and who knew the money had been exposed. We are in a clear case of defenseless law. And just so you can get a tax retroactively who says tomorrow decide to charge a tax on car that has had the last three years, or cancel pensions who hasn’t contributed fifty years despite being currently retired. I'm not talking acquired rights, I'm talking about a practice that starting today it is a crime don’t punish those who practiced it before to be a crime; you might be fine for smoking in a public place but they can’t fine for smoking before the rule was imposed.
This practice brings us back to the dark period known as the Middle Age where the fickleness of the feudal lord could ruin anyone. Sometimes to know a little history would be fine for decision makers. For some strange reason people associate the French Revolution with thirst for freedom when in fact in face the Bastille had only hunger for bread. They demanded freedom because absolutism arbitrary generated a series of stupid rules that changed as the monarch who spoke on and that paralyzed the economy. Not knowing rules of the game does not take risks, knowing that perhaps all your effort disappeared to legislate against shakes you don’t try and know that nepotism and bribery can change things makes you don’t to commit. First EU and the governments that support it favored fraudulent practices by economic forces that have led us to the current crisis, later it has imposed unfair laws and measures to combat the crisis and then it’s directly plundering its citizens like mere medieval tax collectors when it fails in its economic policies.
EU has passed a border that can cost it very expensive. Final agreement has saved the savings of small depositors but oppose an effort by major. To steal savers Cypriots until become a Somalia or European Middle Age there are a long path, but every path for more along that would be always must start by the begin.