What’s Up With Cyprus? (Updated)

Maybe cozying up to Russia is not such a good idea if you’re a member of the EU :

Emergency loan (2012)

Since January 2012, Cyprus has been relying on a €2.5bn (US$3.236 billion) emergency loan from Russia to cover its budget deficit and re-finance maturing debt. The loan has an interest rate of 4.5% and it is valid for 4.5 years.[19][20] It was originally expected that Cyprus would be able to fund itself again by the first quarter of 2013.[20]


On 13 March 2012, Moody’s slashed Cyprus’s credit rating to Junk status, warning that the Cyprus government would have to inject more fresh capital into its banks to cover losses incurred through Greece’s debt swap. On 25 June 2012, the day when Fitch downgraded bonds issued by Cyprus to BB+, which disqualified them from being accepted as collateral by the European Central Bank, the Cypriot government requested a bailout from the European Financial Stability Facility or the European Stability Mechanism.[16]

So Moody’s, which is at this point little more than an enforcement arm of the Fed, the ECB and the IMF, upgrading and downgrading pretty much as they see fit, tightens the screws on Cyprus and fucks up their relationship with Russia, whereupon the Cyprus government inexplicably begs its tormentors, those same internationalist bullies – amazingly operating under the foreboding handle of the “Troika” – for “help”.  The Troika then steals from depositors in Cypriot banks and confiscates the country’s gold.


Power and money seem so closely connected some days.

Meanwhile, even as the Troika seems desperate to get its hands on some gold, the price of gold plunges amid much breathless fanfare and media coverage.  Perhaps the Troika’s impressive show of force in the Cyprus fiasco has people thinking that the banksters are firmly in control for the foreseeable future.

Update:  Meanwhile, Greece has been such a good, good little boy that there’s even some debt relief dessert on the table! Yay!


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Filed under financial crisis, Media incompetence/bias

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