Tuesday, 16 October 2012

Cyprus told to plan for austerity

A meeting of €urozone finance ministers last week told the Cypriot government that it wasn't doing enough to get emergency aid.

The EU isn't happy with Cyprus for going to the Russians more than once for bailouts rather than submit to the EU's repressive and regressive austerity measures that are attached to a €uro bailout and the terms of any possible bailout will be punishing to send a message to any other €urozone country that is thinking of suckling at another teat.

The Russians were happy to lend €2.5bn to Cyprus a year ago but when they asked for a €5bn loan this year the Russians wanted preferential creditor status which Cyprus was unable to offer as the EU must be the preferential creditor under EU law so they said no.  This means Cyprus must now go to the EU for a bailout unless it can find another rich communist government to lend it some money and pay the price for disloyalty.