By Andreas C Chrysafis
April, 2015 (No 73) ©
Pick up a stone off the ground, turn it upside down and one soon discovers another thriving virus of corruption lurking under it. To the dismay of citizens, a fine web of dishonesty has deeply infiltrated into the social structure of the island. In the absence of Rule of Law, and left untapped, corruption grew into gigantic proportions. It has touched the basic fabric of the nation and tainted government officials and the executive.
When the highest authority in the land, as the president, publicly tries to influence the course of justice by attempting to instruct the Attorney General how to deal with the findings of an official inquiry in an alleged case of corruption that involved the Assistant Attorney General, and where the same assistant-general in response, lashes back and launches his own corruption charges for investigation by the police against his own boss – the AG – then, one recognizes how corruption has lodged itself deep into the chambers of the executive and those in authority, who are meant to uphold the law.
The revelation of such behaviour by the three highest constitutional authorities in the land means there is little hope for the Republic to operate on the principle of Rule of Law but rather on elected dictatorship or Rule of Man driven by political cronyism.
Looking at the string of scandals of corruption one cannot help but ask: what has gone so badly wrong in Cyprus to reach this low state of affairs?
There are number of factors at play but in the absence of law and justice anything is possible. In preparation for EU membership the opening of the financial market – which would allow the free movement of capital without restrictions – transformed society forever. At the launch of the Cyprus Stock Exchange, cleptaucracy instantly dug its snout deep into the trough. Bad financial practices ultimately triggered the Cyprus Stock Market scam at the start of 1996. Without proper legislation in place to stop thievery, it was the beginning and the end of the Cyprus economy. The government and the Cyprus Central Bank, proved incapable (or unwilling) to regulate properly either the financial sector or the Stock Exchange.
A wild frenzy ensued: insider-trading tips for shares and promises of instant riches infiltrated most households. Credit went wild and intoxicated by the nectar of wealth the banks and the government took an active role and campaigned to encourage citizens to invest their life’s savings on buying shares. The slogan was “ buy, buy, buy” and soon “financial consultants” went door-to-door peddling riches to unsuspecting citizens. Naively, people borrowed heavily from willing banks and put up their homes as collateral to purchase shares – after all, the government assured them it was safe and investing into “Cypriot companies” would also help the country prosper – so they were told!
Without too many questions asked, money was handed out like candy. The irresponsible financial practice generated obscene profits for the banks and massive bonuses for managers and others – the sky was the limit!
When the hype was ripe for the kill, the banks and an elite cleptocracy dumped their over-inflated shares forcing the market to take a nosedive and crash; a crash that left citizens holding useless certificates with billions of debts to those same banks. The trapped was then sealed – banks were in a position to control an entire nation through economic bondage generated by crippling debts. It was a perfect ploy of domination based on pure greed!
Sir Josiah Stamp, Director – Bank of England 1928-1941 and the 2nd richest man in England at the time stated: “Bankers own the Earth. Take this great power away from them, for then this world would be a better and happier world to live in. But 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”.
Across the Atlantic, Thomas Jefferson, the author of the Declaration of Independence (1776) and the third President of the United States, stated: “If the American people ever allow private banks to control the issuance of their currencies, first by inflation and then by deflation, the banks and corporations that will grow up around them, will deprive the people of all their prosperity until their children will wake up homeless”.
No wiser and farsighted words have ever been spoken! Banks in Cyprus had become the new masters of the country and as long as they controlled credit; interest rates; and money supply; they were untouchable and no government dared to stop them. But the insatiable desire of banking greed did not stop there. The property market provided the greatest windfall yet to come.
A collusion between the banks, solicitors and land developers (Cyprus Golden Triad) established their own financial rules and terms of execution based on fleecing the market. In fact the Cyprus Golden Triad was borne out of pure gluttony and the hysteria of instant richness became unstoppable. Cyprus has changed from a land with principles to a land of connivances! Even grandmothers with a piece of land soon turned land developers and the 15% Man appeared everywhere; in restaurants; offices; hotels and in the streets. Nothing moved unless cash in brown envelopes was handed over! A black market economy reached new heights.
Unsuspecting homebuyers – mostly foreign nationals – became the prime targets. The trickery as not to issue title deeds on completion of the property sale was a well-orchestrated cunning scheme of the entire devious plan of action. The Golden Triad and sales agents convinced buyers that that was how things were done in Cyprus; as long as the sale was recorded with the land registry, title deeds were not mandatory and unsuspecting buyers become perfect victims for exploitation.
Today there are in excess of 100.000 properties without title deeds. Some homeowners end up losing their homes, which have already been paid for or they are asked to pay for them again due to the developer’s trickery and bank’s involvement with the scam. Yet banks do not accept any responsibility or blame for encouraging such deviousness that went on for years. To this day the government is unwilling to take on the banks and has failed to rectify this immoral practice.
Equally, the Cyprus Central Bank on the other hand, together with the European Central Bank both turn a blind eye to the mounting fraudulent banking activities that went on the island. A Deloitte EU Report on the Cyprus bank sector reported that: “there were very compelling cases and suspicious transactions” that involved billions. In fact, the banking establishment and prominent law firms became the hub for illegal money transactions and yet none were ever questioned or prosecuted.
But there were worse things to come. Cyprus became the perfect candidate for IMF EU-Troika’s initiative to introduce “bail-in” – a pet project of the international monetary establishment. If proved successful, the same blueprint of action was to be used against other countries in demand for EU-Troika loans.
The Cyprus government did not object to the Eurogroup “bail-in” conditions and without consultation after the Anastasiades election win, he signed on the dotted line for a 10 billion IMF EU-Troika loan. He adopted EU-Troika’s austerity plan as his own party manifesto; he shut the banks and like a thief in the night he went on a thievery spree and emptied people’s bank accounts; cropped the salaries of workers; put hundreds of people in redundancy; emptied pension funds and much, much more. No economic thievery on such a massive scale has ever been attempted before by an elected government to save a corrupt banking system!
The robbery went even one step further.
Eurogroup demanded that Cyprus Laiki Bank (bad bank) be put into bankruptcy and all its debts be transferred to the Cyprus Bank (good bank). Under normal conditions, once declared into bankruptcy debts are erased and all remaining assets or cash are shared between all creditors; not in this case! Laiki’s 10 billion ELA debts to the ECB were not erased but instead, passed on to the Cypriot taxpayer. That was a perfect mousetrap and the government injected billions (from Troika loan) to shore up the new “good bank”. In fact this sleight of hand has cost the nation and taxpayer over 50 billion Euros; debts that will take generations to repay – if ever!
If that was not ruinous enough, the banks (with government support) now demand to have the legality to make mass repossessions and sell properties as “toxic loans” to hedge funds on the international market. Just like the Lehman Brothers 600 billion frauds did in the USA that forced millions of homeowner into the streets. Many homeowners in Cyprus would soon join them and turned homeless!
It is hoped that one-day common sense will prevail and finally clip the wings of the banking institutions. Putting in place proper legislation to protect citizens against bad banking practices would be a good start, but no such revolutionary leadership exists on the island – it’s not born yet!
The final curtain on Cyprus would fall when banks start home repossessions and entire families are thrown out into the streets. The outcome of that it’s very unpredictable but equally, violent mass uprisings cannot be excluded!
Andreas C Chrysafis
Author – Writer – Artist
ADDITIONAL ARTICLE COMMENTARY: TURKISH CYPRIOT ELECTIONS
I find it difficult to understand one thing!
Today, pseudo-elections will be held in the Turkish military occupied part of Cyprus. All the candidates are aiming to form a pseudo-government with all its implications. Turkey has also put its own party candidate! Our President on the other hand, has publicly announced that negotiations will start soon after the election results on the basis of the proposed BBF.
No Mr. President! There is this small matter of Turkey’s military invasion of Cyprus and not a matter for holding negotiations to partition the island. Have you forgotten that? Unless the Turkish Cypriots and Turkey both abandon their ambitions for a separate “TRNC” state there is nothing to be discussed.
If any discussions are to be held they should be on the basis to either scrap or revise the existing flawed Cyprus Constitution to serve all citizens of the Republic fairly and equally and not to divide the island. Foremost, work together and develop a unified effort on finding a way to get rid of the Turkish troops out of this country of ours. To negotiate terms for a new state within the state would bring suffering for years to come for both communities.
How can the Cyprus government negotiate with someone who’s main objective is to form their own separate pseudo-government by carving up the country into two separate states? No Mr. President, people will not allow petty-politicians to destroy the Republic of Cyprus for political expediency and dogmatism
Andreas C Chrysafis Author – Writer – Artist April 19, 2015