Cyprus Mail
CM Regular ColumnistOpinion

When money flowed like wine

By Hermes Solomon

The enactment of the hotly debated insolvency framework into law last weekend is little more than a cull of the poor and powerless – a round-up of the unemployed homeowner, un-creditworthy and those unable to meet few if any of their financial obligations – a repossession carte blanche for banks.

It has taken the House many months to eke out a bill, that had it been passed in its original MoU (Memorandum of Understanding) form, would have led to a collapsed state.

This present bill with its numerous ‘escape’ clauses does not satisfy terms of the MoU and will be rejected by the troika during the end of their economic and financial ‘health check’ visit.

The troika wants the big boys as well as the penniless.

There are six and half billion euros of non-performing loans (NPLs) owed to banks by developers, but the media and politicians have concentrated on what will happen to ‘the poor’, keeping quiet about the ‘rich’, who’ve milked millions from our banks in unsecured loans and shunted those millions offshore.

You cannot ‘usefully’ foreclose on a man or business that owes hundreds of millions but has few assets held here on the island.

The bill is a naive piece of gobbledygook that will entice, or better still, oblige the hopelessly indebted to face reality with no ‘real’ help from banks which, along with politicians, are responsible for today’s impasse. Just where will the penniless even find the money for defence lawyers, while the rich monopolise courtrooms extending loan repayments ad infinitum?

Civil servants and bank employees will be treated with kid gloves and have their loans restructured, but thousands of struggling shopkeepers and private individuals will lose everything.

It goes without saying how banks will deal with the ‘elite’ (indebted politicians, bankrupt developers, banksters, elite guarantors, etc.) – their ‘obligations’ will be rolled over until better times.

By the end of the year our prisons would be filled with debtors were it not for a bill presented to the House on Tuesday by Justice Minister, Ionas Nicolaou – community service instead of jail in order to pay off fines. Will it be extended to encompass non-performing loaners?

And just how does a 250,000 euro penniless non-performing loaner pay off such a debt – one hundred years of hard labour in a warm climate? And if the indebted dies, will his debt be carried over to spouse or family? Under present Inland Revenue probate rules, it will!

Wholesale repossession of NPLs is the only solution which will satisfy the troika.

Disgruntled demonstrators holding up placards outside the House of Reps stating that banks will sell repossessed property on block to (un-named) Turkish hedge funds does not augur well for this new round of Cyprob talks. And let’s not pretend our rapacious bankers wouldn’t do such a thing given their sole aim is to revitalise balance sheets.

Turkey already occupies 38 per cent of the island and could easily acquire much more legally after the troika rejects this present insolvency legislation.

Is the republic headed in the same direction as Greece?

To avoid a Grexit, Greece is begging China and Russia to invest – Turkey already does, and trade between the two countries has never been higher.

If Greece were to exit the euro, which looks increasingly likely, Greece would be sold off piecemeal at bargain basement drachmae prices to all-comers. Might the same happen here?

If so, our landlords (overlords) might well be Turkish, Russian or Chinese.

The very thought of a Turkish landlord would be abhorrent to thousands of impoverished Greek Cypriots, especially 1974 refugee families. But Turkish, Russian, Chinese or even British landlords, what’s the difference in this globalised world?

We are witnessing the break-up of the republic – the end of History’s hold on what we hold most dear – Greek Cypriot independence.

The Republic of Cyprus has hit rock bottom. Political parties won’t stop bitching, the judiciary is in an absurd state of limbo – nobody knows what to do or where to turn – the place is ungovernable.

We pursue our daily lives totally unaware of what is happening behind the scenes.

When money flowed like wine we were blindly stubborn posturing peacocks. Now it flows no more and we are humbled and vulnerable – anything for a ‘crust’. We see it all the time in far-off lands: ‘Here, take my house, take my wife and kids! Take my cars – everything. Just give me a crust and standing room on a boat out of here!’

Even the CEO of the Bank of Cyprus, John Hourican booked his passage to Ireland after the insolvency bill passed by the House insulted his intelligence.

It’s always the partially innocent who pay for the totally guilty.

Crime is on the rise – burglary, arson, hold-ups and muggings. Drug abuse also – Phaneromeni Square in downtown Nicosia is the heartland of dealers. You can smell it a mile off!

Dogs deserted on balconies bark incessantly, children go hungry and our politicians perfidiously predict an economic upturn.

How long will it be before dogs become food for our children and politicians the targets of increasingly enraged and disillusioned demonstrators?

By the time they have finished, the insatiable offspring of EOKA freedom fighters will have made of this place a prison of debtors far worse than ever it was under the island’s former British or Ottoman rulers.

If the troika had focused two years ago on the big boys and banksters, the republic’s indebtedness would have been considerably reduced.

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