By Andreas C Chrysafis
September, 2014 (No60) ©
The most important thing to remember when dealing with banks it’s a simple rule; banks are a business motivated by profits; banks are not sensitive to social needs; banks do not take risks and bank managers are not your friends. In fact if banks loaned money at their own risk, there would be far less reprehensible moneymaking in the world today, but this is the real world; banks now rule nations and not the governments as people they so think! Too much power has been allowed to blossom in the hands of a select few.
Sir Josiah Stamp, – Governor of the Bank of England 1928-1941 and the 2nd richest man in England, stated: “if you want to continue to be slaves of the banks and pay the cost of your own slavery, then let bankers continue to create money and control credit. Take this great power away from them, for then, this world would be a better and happier world to live in,” and this is from a man who knows all about the banking industry!
Actually, a handful of banking dynasties dominated finances for centuries – notably the Medicis, the Fuggers, the Welsers, the Bernbergs and the Rothschilds – they have all played a central role over the years to develop a system that forever generates greater accumulation of wealth for themselves. Dynasties rarely fade away and today, the oldest bank in existence is Monte dei Paschi di Siena, which has been operating continuously since 1472.
Bank dominance grew powerful because governments failed to introduce laws to protect unsuspecting citizens from the banking elite. In its place, they adopted accommodating policies such as allowing them to “control credit” and “create money” as well as a horde of other powers. Fearful that banks may turn off the financial tap of political support, politicians bend over backwards to grant their every wish and banks today have infiltrated every nook and cranny in society.
Fortunately, people have finally woken up to the fact that banks are not squeaky clean as their public image portrays. In fact their behaviour often borders on criminality. Now that citizens started to speak out things are beginning to take a turn for the better but not enough has been done as yet to curb questionable banking activities and to have their wings clipped.
Bank of America for example was forced to pay 16.65 billion for fraudulent business transactions – the largest civil settlement ever between a single firm and the U.S. government. The Swiss Bank Corporation has also been prosecuted and found guilty of fraudulent activities while Barclay’s Bank was slapped with a 38 million fine for “irregularities” including the TSB Bank and others. It came to be that many other bank institutions did not escape the heavy hand of the law; a procedure long overdue! Financial penalties are not severe enough or a deterrent for such powerful institutions. They can afford it. Prosecutions and incarceration should follow them from top down. So if one thinks that banks are honest pillars of society one should think again!
Undeniably, Cyprus is one of those nations whose destiny now depends on the will and whims of banking organizations – and a most shameful situation indeed! For a 10 billion Euro loan approval to save the failing banking industry (of all people) Cyprus not only sold its soul to EU-Troika but like a thief in the night the government also robbed its citizens’ bank accounts as a precondition of the loan. A Europhile president did not object and signed the dotted line without negotiations for better terms or even consultation; just like politicians acted when Cyprus joined the EU – people were sidelined and had no say in that decision!
In the case of Cyprus, the loan agreed is not a conventional loan like all others – one that generates interest for a predetermined period at a fixed rate and once paid off it ends there! No. Troika’s loan conditions (Mnimonio-Resolution) become an integral part of the law of the land; they dictate the terms and conditions in return of cash.
The type of agreement Troika introduced in fact is a surreptitious way aimed to colonize nations. Cyprus was the perfect candidate to test their pet project; the country was deeply in trouble financially; a small nation with no teeth to fight back; enjoyed a strong financial sector; had a receptive Europhile government; it was close to bankruptcy through incompetence and greed; corruption was rife in the chambers of power and nepotism was like a weed in all sectors of society. Cyprus was ideal for the taking.
Troika’s experiment worked beyond expectations; citizens did not object to having their money stolen; depositors cowered and kept silent; political parties accepted Troika’s demands and voted in favour of its Mnimonio programme; the mass media remained unmoved and the select few clandestinely transferred their billions abroad into European banks while many Russian companies and depositors moved their funds elsewhere. It was a perfect manipulative ploy and a win-win situation for the EU-Troika bankers.
IMF EU-Troika’s success has now set a precedent of things to come; Economic Colonization of weaker nations for maximum control and long-term gains. Unaccountable faceless bankers are now in a position to rule nations through loans!
In the case of Cyprus Troika’s economic domination over the island is supposed to expire in 2035 – not in 2015 as the government attempts to spin. This timetable also depends on whether or not additional loans are needed; the chances of that are more likely than unlikely. The performance of the economy will be the measuring stick of such a decision! Meanwhile, the European Bank for Reconstruction and Development (EBRD) predicts zero growth for 2015 and a 3.5% fall of GDP in the current year.
The fact is, Cyprus is in a deep financial mess with staggering debts and an annual over spend of public expenditure. Politicians speak of debts in excess of 35 billions shortfall and to service those debts and loans, it will cost taxpayers over one billion annually. In financial terms this is absolutely madness. It does not take a rocket scientist to figure out how much Cyprus is in trouble.
Meanwhile, banking institutions unrepentantly continue with their bad practices and the government seems entrapped (or unwilling) to stop the ongoing hemorrhage in the economy. While the European Central Bank base interest rate is set at 2.6% across the Eurozone (customers can borrow at 4.3%– 5.0%), yet banks in Cyprus are allowed to rip-off customers as much as 10-12% and even higher by those notorious credit card companies. With such high interest rates there is no hope in the world for the struggling economy to recover.
There are three types of leadership that determine the fate of a nation: one that takes the bull by the horns and gets things done for the benefit of the nation; the other buries its head in the sand unable to face the truth hoping things will sort themselves out; and the last one makes shallow promises and always seeks ways to pass on the blame to others. The present government can be categorized as the last of the three.
In fact, Troika’s Mnimonio has become the government’s manifesto if not its gospel. The government is so obsessed by it’s implementation that the president recently refused a Parliamentary majority decision to amend the Troika inspired Mnimonio bill; a bill (among others) giving more powers to the banks to repossess people’s homes and sell them “en-block” at auction to third parties.
Parliamentarians voted against such a dangerous bill, which could have triggered a domino effect of homelessness and sleeping rough for the very first time in Cyprus. Not pleased by the outcome of the vote, the president transferred the bills to the High Court to determine its constitutional validity. Meanwhile, Troika is blackmailing the nation that no additional funds will be released unless its demands are met. This raises the question as to who runs the country today?
What is most worrisome is the fact that the president decided not to accept a parliamentary majority decision. This undemocratic behaviour indicates that elected dictatorship is slowly creeping in through the back door. Between the banks’ shenanigans and government political dogmatism void of social consciousness, Cyprus is entering into a new unpredictable era; an era of uncertainty dominated by EU and banking institutions.
The country would have been in a better position if governments had, had the resolve to deal with banking practices and corruption long ago in ways as Sir Josiah Stamp advised: “take this great power away from them’.
Cyprus can do that but which leader dares to take such a Herculean political task to clean out the stables of greed – certainly not the present government, which believes banks are God’s gift to Cyprus.
Unless inward investments start pouring into the country to boost up the economy and trigger a reduction in the unemployment there is the likelihood that additional Mnimonio will be required – just like Greece did. It now owes 240 billion to IMF EU-Troika. A staggering figure indeed for a small economy! The expenditure of interest payments alone is enough to cripple the nation and reduce citizens to utter poverty. That is a classic case of Economic Colonization and it’s absolutely insane for a government to reduce its citizens down to such a state of affairs!
Cyprus is the next victim unless the government makes a U-turn and seeks out ways to get rid of Troika and the EU. There are always options available; one only has to change one’s frame of mind and do the right thing and call in the experts to seek out better ways to save the nation. Taking the word and the advice of banking institutions is a fatal mistake.
Exit from Euro will be a good starting point.
That will then allow the Central Bank of Cyprus the freedom to make decisions for the good of the nation without the constraints of the ECB. It will also regain the ability to fluctuate its own currency as needed; set up interest rates to meet the economic demands of the day; introduce new and radical banking regulations and tough laws to protect businesses and citizens alike from banking exploitation; set up an inspection system with legal powers to charge offending banks and their managers; prosecute those banks of fraudulent activities and incarcerate wrongdoers; make bank fraud a criminal offence that carries stiff penalties and imprisonment; have the right to revoke bank licenses.
One thing must be remembered: banks are not above the law and neither are they indispensable on the presumption they can do no wrong. They have done a great harm to Cyprus and continue to do so and yet no one has been prosecuted. Where is the Justice in that or the Rule of Law that supposedly protects citizens? Probably in a fantasyland!
Andreas C Chrysafis
Author – Writer – Artist