‘Cyprus bailout reminiscent of French revolution and Bolsheviks’

The levy on deposits at the Bank of Cyprus is nothing but an expropriation, analyst, John Laughland, told RT, adding that the bailout deal that the EU forced Cyprus to sign will have a “catastrophic” effect on the island’s banking system.

According to the terms of a €10bn bailout agreement Cyprus struck with the troika of international backers (EU, ECB, IMF) on Monday night, the savers, who have uninsured deposits of over €100.000 at the Bank of Cyprus, will lose from 30 to 40 percent of their savings.

The Island’s second largest financial institution, the Laiki Bank, will also be closed, all to save Cyprus from bankruptcy and prevent the country’s exit from the eurozone.

The director of studies at the Paris-based Institute of Democracy and Cooperation, John Laughland, believes Cyprus was blackmailed to sign an “unjustified” deal, which puts the safety of deposits in banks across Europe in question.   
RT: Cyprus has ducked bankruptcy by signing a last-ditch deal, but it now faces deep recession. Did the country have any other options?

John Laughland: Cyprus is yet another victim of power and ideology-crazed determination of the European elites to keep the single currency intact against all the odds. I genuinely think and I’m not given to exaggeration that Europe today is in a situation comparable to that of the French revolution or the Bolshevik revolution. By that I mean the entire class of people, in this case the so-called rich Russian oligarchs, who apparently have been laundering their money in Cyprus bank accounts are going to be expropriated, not taxed, and treated as if they were criminals. It’s just as in the two revolutions I mentioned aristocrats as a class were hung on the lampposts because it was decreed that their property had been criminally obtained. This is a very bad precedent, because it means that bank deposits, which are private property, are no longer safe in European banks.

RT: The move to raise bailout money by taking what could be up to a third of the savings of some depositors, has received a baffled and outraged reaction. Is the unprecedented motion to tax deposits really justified?

JL: Absolutely not. It’s in no way justified. The only way that money could be raised in a justifiable way would be by tax that is to say by a lawfully approved measure without approved measure without retroactive effect. This, by contrast, is a bank robbery. The British papers are right to call it a bank robbery because the deposits, which are held in Cypriot banks are, of course, private property. They belong to the people, who have those bank accounts.  And the reason, why Cyprus has been forced and I mean been forced to adopt this is that on Friday, following the rejection of the earlier plan, which was substantially very similar, the European Central Bank did something, which it had no legal right to do at all. And that was to threaten to cut al liquidity to Cypriot banks this afternoon today on Monday [March 25] by the end of trading. It has no legal right to do that and it threatened the Cypriot government that if it didn’t agree to an EU and IMF plan than this monetary would be imposed... The European government held the gun to the head of the Cypriot government and told it that it had to sign an EU deal. I suspect, by the way, that’s one of the reasons, why the Cypriot finance minister’s visit Moscow last week ended in failure because the EU told them they have to sign an EU deal – not the Russian deal.

RT: Could we see such methods be applied in other ailing European countries in the future? What’s you’re forecast for the nearest future in Cyprus and the EU?

LJ: I think the people in Cyprus, probably, understand better than most of us what’s going on. Although the propaganda is absolutely deafening, particularly, in the German media this morning about how all the money is held by Russian and how all these Russians are criminals, who deserve to have their money taken away. There will ultimately be other people – Cypriots and other nationals – who also have bank accounts of more than a €100.000. And if that money is expropriated – stolen as it’s going to be – then the effect on the Cyprus’s banking system will be absolutely catastrophic. I don’t just mean in terms of job losses and recession, but in terms of the basic confidence, which is necessary for any country to maintain a banking system. And I think there will also be effect on the banking systems of other vulnerable ‘Club Med’ EU countries. After all, if the European Union can do this to Cyprus, there’s actually, no reason, why it can’t do it to Greece, Italy, Spain or any other country, which is in difficulty.