Cyprus Mail
CM Regular Columnist Opinion

The thieving continues

By Hermes Solomon


EDEK chief and House speaker Yiannakis Omirou seems convinced that Cyprus will never exit this economic downturn, never again enjoy the high standard of living it became accustomed to under the AKEL government, intimating that it was a mistake for Cyprus to have joined the Eurozone and that we should get out, return to the Cyprus pound and devalue.

AfD (Alternative for Europe), a German political party that won five per cent of the vote at last Sunday’s general election, seeks a two-tier euro Europe – south and north. It would mean the euro would be split into two zones, a Mediterranean euro worth perhaps half that of a northern European euro.

There is a real concern among senior diplomats, decision-takers and policymakers in Brussels that the proposed institutionalisation of the Eurozone will lead surreptitiously to a two-tier or two-speed Europe – not as if it hasn’t surreptitiously already!

In 2003, Turkey was close to bankruptcy. The Turkish government devalued its currency by 30 per cent and today their economy is booming, ‘stealing’ manufacturing and tourism from its neighbours.

We are not all Russian millionaires and many visitors from England only come to Cyprus to visit family here, but it’s cheaper to fly to the States; blatant hiking of fares by airlines during summer and mid-term school holidays is tantamount to theft.

Tourism this year is expected to fall by between six and eight per cent. Much of this can be put down to a general economic malaise throughout Europe and more particularly to price slashing competition between popular destinations. It seems we are not yet poor enough to slash prices enough to attract ‘floating and fickle’ tourists.

The Cyprus Tourism Organisation must intercede and again make Cyprus an attractive destination. But how, when the troika insist on cuts in all public services, loading our economy with unsustainable debt repayments thus causing the disintegration of the country’s infrastructure in a climate of rising unemployment. Motorways, town roads, pavements, parkland and public gardens are falling into disrepair and there is no sign of ongoing upkeep.

Is Cyprus heading for the rubbish tip? Omirou certainly seems to think so.

Angela Merkel‘s conservatives (CDU) won a resounding victory last Sunday despite a surge by the AfD that helped push her junior coalition partner out of parliament.

Merkel’s veteran finance minister, Wolfgang Schäuble then said on public television, “We have a broad fundamental consensus regarding Europe policy. We will continue to play our part as an anchor of stability in keeping Europe together.”

And what exactly does he mean by keeping Europe together when Germany has 24 per cent of her citizens living below the poverty line (on less than €800 a month income)?

Germany’s miraculous economic recovery from the ‘sick man of Europe’ in 2003 to become the EU’s richest country with a low unemployment rate by 2013 is based on government policies directing the well qualified unemployed to take any job on offer, whether part-time or lowly paid.

Perhaps our minister of labour could take a leaf out of ‘Austerity’ Angela’s book. Our private sector has already cut wages by up to 40 per cent in some cases. Nobody earns today what he/she earned prior to the collapse of our banks.

Reorganisation of the public sector and privatisation of SGOs will lead to similar cuts in wages and benefits. There will be much less money in circulation as SMEs close down and unemployment rises. Bank interest rates will fall to EU levels and taxation equate to EU standards; those relying on unearned income (savers) will also be hit hard.

Government has been ‘talking’ about dropping interest rates to borrowers from 8/10 per cent to five per cent for over a year, yet savers’ interest was cut from 4/5 per cent to 2/3 per cent six months ago, income tax on interest earned (defence) raised from 10 to 30 per cent! The stealing goes on…

Why does this government paint false pictures of an economic upturn and gas/oil future wealth when queues for food hand-outs grow and repossessions of the homes of the ‘insignificant’ proceed quietly and unannounced?

Don’t underestimate the resourcefulness of practiced thieves. A developer owes 200 million to the banks yet has ‘hidden assets’ worth much more. His various companies own vast areas of undeveloped land, probably worth 50 million, several hotels collectively worth over 50 million, a hospital, a university and thousands of properties split between Cyprus, Crete and Paros, mostly unsold. His family is worth on paper perhaps half a billion or more.

Surely putting people back to work should be a priority and not whether this government should dismiss the Central Bank Governor or save bankrupt property developers, which are beyond redemption anyway and likely to cause a second wave of bankrupt banks.

The troika is simply prolonging the agony by lending billions to unsustainable banks/developers, who are being kept afloat at the expense of jobs and investment.

Who do we expect to occupy the thousands of empty properties, and those still under construction, if not foreign investors?

We must import people, industry, tourists and financial services or die. And above all, stop building concrete skyscrapers without stating who we expect to fill them, or extolling pie in the sky dreams of an economic upturn without stating how it will happen. The disillusioned unemployed are already leaving the island, especially the young.

Construction sites and banks became ‘ghost towns’ until that first tranche of the agreed upon nine and a half billion euro troika loan arrived from Brussels. Now they are busy again.

This is a bad omen! It simply means that they are digging the debt hole even deeper. And just who will end up paying the bill if not this and future generations? Banks must foreclose on bankrupt property developers when ‘hidden assets’ exceed liabilities, namely land and property which have a real value even in a depressed market.

If banks auction off bankrupt developers’ housing/land stock, worldwide bargain hunters will arrive here in droves! The alternative is permanent indebtedness and yet more ghost towns like Famagusta – decayed and empty!

Finance Minister, Harris Georgiades said on Wednesday, “The worst is behind us as far as the banking system is concerned. We have exited the danger zone and we are now on a correction path.”

Many would say, “Oh, do shut-up! Just look at what’s happening in Greece!”

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