As you may have noticed Cyprus is currently in the grips of political turmoil over plans for the government to seize 10% (the exact figure is under negotiation) of privately held bank accounts as a condition of a European Union (EU) bailout.
Whats actually happened is that the EU agreed to give Cyprus a bailout on condition they made a contribution of their own choosing thinking they would raise taxes or cut public spending. However exploiting a relationship that really dates back to 1878 when Britain effectively purchased Cyprus from the Ottoman Empire the UK somehow convinced the Cypriot government to go ahead with this crackpot asset seizure plan. What probably sold the Cypriot government on the idea was the opportunity to show solidarity with Greece (don't get me started on the Greek Cyprus V Turkish Cyprus argument) by provoking discussion about EU austerity measures versus currency devaluation via leaving the Euro. Although neither of these directly raid someone's savings accounts through things like stagflation and straight out devaluation they reduce the value of those savings having, in practical terms, exactly the same effect.
Britain's real reason for pushing the Cypriot government into the plan was to provoke the Russians who have substantial assets in Cyprus. To give you an idea of the scale of Russian investment in Cyprus showing incredible chutzpah a single Russian company (Gazprom) today basically offered to just buy Cyprus as an alternative to the EU plan. This was a nice little reference to 1878. The UK's plan being to remind Russia and everybody else how much money Russia is being forced to spend propping up the Syrian government. As Qatar has promised to pay the UK some USD15bn to bring down the Syrian government their primary objective is to provoke Russia into withdrawing their support. However their secondary objective was to find out if the US has done a back channel deal with Russia to help meet the cost of prolonging the conflict until the US can get a foothold. By putting the subject up for discussion they also reduce the possibility that the US could do such a deal in the future.
What's interesting is that following a conference call this evening the Eurogroup (basically the EU minus the UK) has recommended that savings below E100,000 are left untouched. This would obviously help ordinary Cypriots but probably end up hitting the Russians even harder. Following some mixed signals on the Syrian arms embargo issue this is the Eurogroup sending a clear message to the US that if they continue to protect Chris Brown from prosecution the price it will be forced to pay is Russia dropping it's support for the Syrian government, the Syrian government collapsing and the US being left out in the cold.
On Wednesday (20/3/13) US President Obama is visiting Israel and all the game he's got to take with him is the issue of isolating 'Iran' (Hello There!). Hopefully then Nentanyahu will be able to knock some sense into him because Obama most certainly has the authority to call Chris Brown's handlers to heel. After all if the US thinks it can win influence amongst Syrian Jihadists by trying to appear more anti-Semitic then the Gulf Monarchies they're going to have to start building gas chambers.
23:40 on 18/3/13.
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