The Great Cypriot Bank Heist: a moment in the crisis

Two months ago, perennial optimists were telling us that the worst of the Eurozone crisis was probably over. Then came the Italian election. Now the great Cypriot bank heist.

By Sunday morning it was dawning on tens of millions of people what had happened, as the news spread from the specialist financial commentary to front pages and top television news across the continent.

At one stroke, the Troika of the Eurozone finance ministers, European Central Bank and International Monetary Fund had, with the new right-wing Cypriot government, stolen between 6.7 and 9.9 percent of the money of all depositors in Cyprus’s ailing banks. All in the name of a bank rescue.

When the leading capitalist states moved in 2008 to rescue the banks it was through taking on debt themselves and guaranteeing small and medium deposits in order to prevent a run on the banking system following the collapse of Lehman Brothers. The public, of course, was then to be squeezed in the name of reducing the debt that was now on the public books. Now, nearly five years on, rescue means direct robbery of the depositor.

It’s as if as the crisis has continued and deepened the capitalist system has become auto-cannibalisitic. What was meant to be sacred — private property and the essential private contractual relationship — has become profaned; not at the hands of some North Korean communist terror, but by the partisans of re-turbocharging the neoliberal model, which is what the austerity is all about — via

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