By Dr. Olga Demetriou*
Dr Olga Demetriou probes whether the apocalyptic scenarios pervading the discourse of ‘surprise’ around the ‘crisis’ in Cyprus are repositioning the sense of self of Cypriots vis-à-vis their institutions, the state, or the future
The Cyprus financial crisis, which unfolded during the last two weeks of March, was surprising on many levels.
For the global stock markets that plummeted on announcement of the terms of the first attempted deal between the Cypriot authorities and its lenders on 15 March, the fact that small depositors had been targeted first was a surprising rewriting of teh rules of capitalist prudence.
The lending Troika institutions (European Commission, European Central Bank, and the International Monetary Fund) had agreed to tax Cypriot bank deposits below€100,000 by 6.75% as a way of raising the amount needed by the Cypriot state to co-finance the loan of 17bln (the Troika providing 10bln). The security of small deposits was flouted in principle (one of the very few assumptions of capitalism that seemed to have remained intact through the global crisis), if not in law (EU Directive 94/19/EC guarantees ‘at least 90%’ of deposits up to€100,000 while its implementation tool in Cyprus, the Deposit Protection Scheme of the Cyprus Central Bank, confirms a ‘maximum compensation’ of €100,000). The surprise that small depositors across the Eurozone could be hit in future bail outs must widely damage trust: it has made bank runs into table talk.
For the Greek-Cypriot public, who had been assured by their recently-elected president that ‘hair-cuts on deposits (understood to mean over €100,000) are a red line that will not be crossed’,the initial deal amounted to an unanticipated sheering of sheep. Sure enough, the first protesters to congregate outside the House of Representatives on 18 March, called on the deal to be voted down by MPs by symbolically dumping a pile of sheepskins in front of the parliament. The amended bill that was eventually rejected the next day had secured the first €20,000 and dropped the initial 6.7% to 3%. By then, the protesting crowd was large and its anger directed against what some argued was a ‘shock and awe’ approach by the dealmakers to stun the populace into submission.
Continue reading “A cultural reading of the Cyprus crisis”
The Eurozone has entered its fourth year of crisis and 2013 has been a challenging year for a large number of Member States, who have been falling into severe debt, requesting bailouts tied to crippling austerity measures. If we thought the issue was namely a Greek syndrome, this year has proven otherwise.