Wednesday, 27 March 2013
Pissarides questions Cyprus’ future in the euro
Above is another video clip of Christophoros Pissarides, the Cypriot Nobel prize-winning economist and head of the island’s Economic Policy Council, this time explaining to Bloomberg TV the ramifications of Cyprus’ bailout deal and wondering whether Cyprus should now abandon the euro. Pissarides is clearly furious and incredulous that Germany (essentially) has decided at a stroke, disdainfully, unnecessarily and unjustifiably, to terminate Cyprus as a financial services centre, without any apparent sensitivity to the fact that much of Cypriot society – particularly the education system – was oriented towards accommodating the economic model the country had developed over a period of 40 years.
Below are a couple of things Pissarides says in the interview:
‘The implications for the Cypriot economy will be a disaster. The only good thing about it is that the uncertainty has been resolved. But that’s like saying, “I’ve got a pain in my leg”, I go to the doctor, he cuts the leg off and we say “it’s good that you don’t have the uncertainty about that pain anymore”.’
‘Cyprus developed as a small economy with a highly educated labour force – the most highly educated labour force in Europe in terms of university degrees – and concentrated on business and financial services. And now the German finance minister and others are telling Cyprus, “This is not a good model of economic development for you. You have to think of something else”. Now, what do those qualified people do – all those people who have degrees in accounting, finance and banking studies from British universities? They become unemployed or leave the country.’