Friday, 28 October 2011

Cyprus unfazed as Greece sinks further into the mire

Although Cypriot banks continue to be downgraded by ratings agencies due to their exposure to Greek debt and despite these banks effectively being denied access to international capital markets, Cypriot economists – at least the two I heard on RIK earlier today (Marios Mavrides and Alexandros Michaelides), both of whom seemed quite normal and sensible – appear calm about the situation, asserting that the Cyprus economy and its banking sector is just about healthy enough to survive the Greek haircut, and excluding the possibility of Cyprus going the same way as Iceland and Ireland.

However, I was struck by one thing Marios Mavrides said, which was that Cypriot banks, awash with money, decided at the beginning of 2010 – i.e. when Greece’s debt problems were the talk of the world – to invest their surpluses in Greek bonds. In 2010? How stupid was that? Surely, that wasn’t a business decision; surely, that was the Greek government telling the Cypriot government to tell the Cypriot banks to join in the national suicide, which, being patriotic Greeks, they duly did.

And as if we didn’t know already that Greece has still a long way to go before it reaches the bottom, today we saw the Ochi Day parade cancelled in Thessaloniki and disrupted in various other parts of the country by anti-government demonstrators. Apparently, in Thessaloniki, when retired army officers tried to march, they were spat at by anarchists.

According to the Washington Post: ‘The protesters included leftists, anarchists, neo-Nazis, people fed up with the government’s austerity policies, and fans of the local soccer club Iraklis, which was pushed out of the top division because of financial irregularities.’


lastgreek said...

In 2010? ... the Greek government telling the Cypriot government to tell the Cypriot banks to join in the national suicide, which, being patriotic Greeks, they duly did.

Meanwhile, over the same period, "patriotic" Greeks in Greece, especially of the rich kind, were pulling out their money from Greek banks.

The Greek banks are not only insolvent, but if it were not for the good grace of the ECB -- and the drug money laundering, of course :) -- the ATM's would be empty.

... the Ochi Day parade cancelled ...

No problem. They can hold the parade in Cyprus.

John Akritas said...

Yes, LG; Ochi parades were held throughout the free areas of Cyprus today, με κάθε λαμπρότητα, as they say, and I'm sure Papoulias would have been more than welcome to attend the parade in Nicosia. I'll try and post a clip later of how the parades were reported on RIK news.

Hermes said...

The cancellation of the Ochi Day Parades is really the logical outcome of the cheap populism that has ruled Greece for 40 years. A 40year Junta of the Rabble. The one big message that ancient Greece has for us is to enschew demagogues and demagoguery. The Byzantines also had mechanisms such as the monasteries, the Akrites, the Senate to ensure demagogues did not get out of control. However, in modern Greece we love the pill of populism. And now we are paying the price.

John Akritas said...

Although, if the reports I saw on Greek TV news are anything to go by, it wasn't a 'rabble', i.e. ordinary folks hacked off, but the usual suspects from Syriza and trade union militants. They're quite a specific group of people with a specific ideology and aims. I reckon the vast of Greeks would like to see these people crushed, but the fact that the state won't/can't do it tells us much about the condition of Greece and why things will only get worse.

lastgreek said...

I came across this article today in one of my favourite financial sites

Another Eurozone Country Bites the Dust

The country in question is Cyprus. Notwitstanding the Cypriot bank losses on Greek sovereign debt, there is also the "little" problem of a real estate bubble in Cyprus -- and ... the title-deed scandal.

John Akritas said...

Beware, LG, of British expats and the Anglo-Saxon media running down the Cyprus economy. It serves their political interests for Cyprus to go belly up. Weak Cyprus economy equals less resistance to British plans to force Cyprus into some form of Annan-style partition. And god forbid, from the Anglo-Saxon point of view, that Cypriot peasants should have a viable economy or that these Cypriot peasants should prove capable of making money in any way other than graft and pulling the wool over the eyes of honest Anglo-Saxons. They've been bleating for years about title deeds.