The passing of Nelson Mandela is as symbolic as his life and legacy. A man who truly fought for justice and freedom. A man who realized that peace and prosperity is above anything else; that to move forward the past must remain a memory.
Listening to the stories of the video, e.g. hearing “I was just a foot soldier taking orders”, we are all reminded of what took and takes place all over the world. Cyprus suffers from similar stories and mythology; a truth and reconciliation committee is a necessary step to acknowledge each other’s pain, heal the wounds and move on. Even if South Africa has not fully recovered (inequality is prevalent everywhere), it has moved on, it has taken a step forward and it is on a path to seal its fate as the most prosperous country in Africa, but it started from here:
Time for Cyprus to take a step forward…
Inspired by the BBC Magazine article “A Point of View: The foibles of four countries” and Nicolas’ “Good Cyprus, bad Cyprus” I bring you my own ranting and commentary on the country I grew up in, live in and society I participate in, for better or for worse. Our own irrationality stems from size – yes, it matters. As a small place Cyprus has the advantages and disadvantages that come with this inherent trait.
All Cypriots are experts and quite happy – almost obliged – to offer their opinion. The best example is when calling up any government service or private business asking for information; electricity connection, visas, bills, directions, etc – Cypriots are experts! Instead of saying: “I am not responsible for this, call so-and-so”, they will ask you one or two questions about your “case” and then state matter-of-factly that “you should not have a problem…” Then you call the same office and you get a different reply, or another person in the same service will tell you another story. Are there no rules, no regulations, a defined/accepted/followed procedure? In general, we love to talk and give our own two cents on everything – even if it is based on a few things we read or heard here-and-there.
Us Cypriots also have a size complex. Instead of realizing – in both definitions: understanding and making reality – that we live on a small island and building on the advantages that provides, we believe that this small island is of great geo-strategic importance (it was in the 2nd century BC) and that everyone is conspiring against us (Brits, EU, Americans, the UN). We have a megalomania and a self-centredness that is evident from the simplest things such as the way we drive, and even the cars we drive, but also in the way we dress, spend and behave. We pursue grand rewards without any planning hoping to get there with the least effort. Part of this is also exressed in a love for motherland which has proven neither rational nor rewarding.
Of course, these traits are what make us friendly and willing to help. After all who more helpful than the person sticking their nose in your “bidness” all the time offering their opinion. All in all, Cyprus and Cypriots are caring and helpful, laid back and calm. We sell sun, sea and good food – we are no bankers. Our self-centredness makes us put family and friends first, going out of way to assist them. Cyprus is about Akamas, siesta, souvlakia, frape in the sun – should also be about research, universities, green energy, agro-tourism, conservation, libraries, sports centres….
Harry S. Truman shouted in despair that he needed a one-handed economist as all of his economics advisers kept on telling him: “On the one hand…, but on the other hand…” Anyone with basic economics knowledge understands it is a social science. When one of your parameters is people you cannot be certain of anything.
For example, a basic economics principle states that: “People are rational agents.”. An assumption of course and the easiest way to refute it is by observing the demographics: women make up 50% of the population and are – obviously – not rational. Yes, I am referring to the 58 pairs of shoes you have in the cupboard – I’m joking of course, but you get my point.
Back to the parameters though. Even with the most advanced econometrics and mathematics you will reflect a situation in society at a specific point in time, but to get there you make assumptions and hold some variables constant. This will be a snapshot of the situation given the constants, which you have to evaluate as well. Then you have to take into account externalities, human behaviour and the specifics of your situation/setting. Therefore, you need to be an economist/mathematician/sociologist/psychologist/intuitive/perspective person with a bit of political science background sprinkled on top…. You can take an issue in economics and take the route of mathematics to analyze it and understand it, or you can take a softer stance via the theory and mix in some sociology/psychology/business all in an effort to try to extrapolate and integrate the issue into the bigger picture. Assumptions are made to help you analyse and measure and then you have to either take each constant parameter and examine for its effects, or change your perspective and look at the micro level.
After the recent events in Cyprus and the agreement with the troika there has been an discussion of whether it is wise for Cyprus to stay in the eurozone or if it would be better off leaving. Paul Krugman has argued for a Cypriot exit now, while Michalis Persianis of Kathimerini argues why that is not feasible. Here is another argument in support of the view to exit now by Matthew O’Brien.
On the one hand, Krugman and O’Brien argue that Cyprus must exit the eurozone since the benefits of a monetary union have ceased to exist, especially with the capital controls that have been enforced (for 7 days – MoFA Casoulides has stated they will continue for a month – Argentina was forced to keep them in place for 5 years!). The point that Krugman makes is for a swift and painful exit in the short term, with the hope of bouncing back sooner than by remaining in the euro and straggling along via cuts and austerity. His main point is: “Leaving the euro, and letting the new currency fall sharply, would greatly accelerate [..] rebuilding.”
On the other hand, Persianis argues that leaving the euro will lead to a drastic devaluation of the new currency and therefore inflation (since we are mainly an importing country and not a producer – fuel imports for electricity generation also will be subjected to this) while he adds that our resulting cheaper tourism will not be competitive in terms of quality. In addition, we have no other liquidity sources other than the ECB and no other means of financing the state or the banks, as Cyprus’s ratings leave out of market financing.
So the dilemma is: remain in the euro and sustain austerity measures and pay cuts which will – in effect – cause inflation since nominal wages will decrease, while the economy remains stunted (actually shrinks) for the next 5 to 10 years, or exit with pretty much similar (or worse) inflationary pressures and begin the rebuilding process and growth. Capital controls have basically taken us out of the monetary union (while also possibly creating a black FX market vs the “real” euro). One of the founding principles of the EU – free flow of capital, has been put on the sideline.
The history of the EU reveals that there has always been a split between North and South, and that further integration has always been a debate. A two-speed EU has always been there. All the euro has done is make this more pronounced and evident to the people. The EU is this far off, distant and complex institution that has no benefit for the ordinary man. There is no vision – no common vision at least – nothing that unites us. The plan was to unite the people of Europe economically to avoid conflicts. A monetary union was a step in this direction aimed to integrate the EU even further and yet it is moving as apart.
Personally, I see the romantic idea of a European Union falling flat on its face. This has mostly to do (as usual) with the politics of the matter and not the economics. The politics shape the economics and there is no common interest. It is NOT one for all and all for one – it has become all for the few. There are NO signs of the crisis abating and no signs of further political integration. Solidarity and pro-EU sentiments are at an all time low among the population (not only in Cyprus, but among the whole of the southern region and even the northern countries have to be wary of the constant bailouts). Politics is the reason after all for the harsh deal Cyprus was given with the elections in Germany close.
So my conclusion (and an opinion I am sure others share): we cannot leave the euro at the moment but within the next few years we HAVE to build up our economy to be able to do it. Even if at the moment we are dependent on the euro due to a lack of liquidity and the problematic banks (which we could not bail out through the ESM for some reason), we have to keep in mind that the eurozone crisis is spreading and even if we do not exit now, we will either have to in the future, or it is very likely that it will simply collapse. Never say never.
As the hashtag #Cyprus has been trending for the past 10 days for us living here it has been a roller coaster of emotions. The plans that you might have made, your job, your family… everything passed through our minds as the idiotic conundrum of saving an irresponsible bank went on…
We are a small island economy with a very short memory. And because there has been already some mention of who is responsible below is a list of things we should not forget:
1. This all began in 2006 when a certain gentleman from Greece Mr Vgenopoulos invested in Laiki Popular bank and renamed it Marfin Laiki Bank. This “opened up the bank” and made it heavily invested and dependent on a seemingly rising economy. At the time the president was Tasos Papadopoulos and the Central Bank Governor was Athanasios Orfanides.
2. As the crisis unfolded and heightened in 2008-2009 Cyprus entered the euro. Although the main reason for joining the EU for a small country was negotiating power for the issue of the Turkish invaded island, somehow it saw that it had to gain from a monetary union… People were talking about rises in prices etc, but almost nobody mentioned that the structure of the euro would not allow for monetary policy from Nicosia anymore.
3. When the next president, Mr Christofias, came in he not only did not enforce more regulations on banks as his “ideology” would dictate, but he managed to spend the surplus that was (randomly) accumulated by the property bubble that was again overseen by the previous president (Papadopoulos) AND give a 4 bln “solidarity” amount to Greece when their loan haircut took place.
4. Over the years people have not said anything – they thought that Papadopoulos was a big brave politician that said no to the Annan plan and guided us into the euro. He was far from it – he oversaw the beginning of the end, his successor only heightened the problem and we were led to the current situation.
5. Let us never forget that the two large banks became over-extended and over-invested in another bankrupt state – that we have always followed from one idiotic move to the next.
6. The government before Papadopoulos is not without blame either – let us not forget the stock market bubble.
7. This is a small superficial list. I have no time to go into more depth or discuss it further. I have never voted (always thrown by ballot blank) and NEVER will vote.
8. We are a country with no plan and no vision. We do everything at random and go for what will fill our pocket today – never tomorrow.
I will never talk again. We all need to talk through ACTION. It is not what you say, it is what you DO.
One more point:
- We always appoint Finance minsters who are ex-bankers (conflict of interest) or that after being FinMins head to banks. We appoint Central Bank governors from academia – with no real experience. In the UK they brought in a Central Bank Governor from Canada to shape things up… maybe we should open the positions up to people with more experience and less political influences from within the country.
Η δουλειά ενός γονιού είναι να καταστήσει ικανό το παιδί του να λειτουργήσει και να σταθεί στην κοινωνία σαν άτομο – δηλ. το μικρότερο άτμητο σωματίδιο της κοινωνίας. Διότι τα παιδιά είναι άτομα και η φράση το «παιδί μου» δεν σημαίνει τίποτα περισσότερο από το ότι είναι ευθύνη μου – και όχι ιδιοκτησία μου – μέχρι το σημείο που δεν επεμβαίνω και δεν επιβάλλω σε αυτό οτιδήποτε. Ευθύνη μου από όλες τις απόψεις: φιλοσοφικά, θρησκευτικά, νομικά, ηθικά….
Γονιός σημαίνει ότι δίνω την ευκαιρία στο παιδί να μάθει, να ανακαλύψει και να μπορέσει να επιβιώσει στην κοινωνία που έχει δημιουργηθεί από το συνολικό άθροισμα των πράξεων και ιδεών όλων των ατόμων της.
Γονιός ΔΕΝ είναι αυτός που μαθαίνει στο παιδί του να είναι με το αποελ ή την ομόνοια, να είναι δεξιός ή αριστερός. ΔΕΝ είναι αυτός που του μαθαίνει να μισά τους μουσουλμάνους ή να είναι καχύποπτος με οποιοδήποτε ξένο.
Γονιός είναι αυτός που μαθαίνει στο παιδί του ότι όλοι είμαστε διαφορετικοί, αλλά είμαστε όλοι άνθρωποι. Γονιός είναι αυτός που δίνει την ευκαιρία στο παιδί του να μάθει ότι οι θρησκείες περιέχουν διάφορα συστατικά, τα περισσότερα από τα οποία είναι παραδόσεις στηριγμένες στην προκατάληψη και ότι τα καλά της θέλουν πολύ ψάξιμο. Γονιός είναι αυτός που θα μάθει στο παιδί του να εξερευνά, να είναι περίεργο, να ψάχνει και να έχει σαν μόνη πεποίθηση ότι είναι άνθρωπος – με δυνατότητες, χαρίσματα, αδυναμίες και ελλείψεις…
Εδώ και εξι μήνες – και για το υπόλοιπο της ζωής μου – θα προσπαθώ να είμαι ο καλύτερος γονιός που μπόρω. Δεν κάνω ποτέ απολογισμό της χρονιάς, αλλά σίγουρα το 2012 δεν θα το ξεχάσω ποτέ… Στα επόμενα χρόνια – l’chaim!