Now that the crisis in Cyprus has passed, we can finally admit the obvious: The "crisis" it provoked did not deserve the attention it received. Cyprus makes up a fraction of one percent of the European Union's GDP and it's a backwater for sketchy Russian dealings. If Cyprus had drowned in a sea of Mediterranean debt, the Eurozone would not have gone under with it. – Reuters
Dominant Social Theme: Cyprus might have brought down the euro if the crisis were not averted.
Free-Market Analysis: This is a very revealing article posted at Reuters that comes out flatly and says the Cyprus crisis was overblown on purpose because otherwise sufficient pressure could not have been generated by the world community to change Cyprus's behavior.
Yet the campaign against Cyprus was a mistake on many levels, in our view. Top EU leaders are obviously aware that opposition to the euro and even the EU is growing. A recent poll in Germany found a sizeable majority of Germans would now like to leave the euro and perhaps even the EU. But the reaction of Brussels is to become more insistent about the centralization of power and the "implacable rigor" with which austerity and other measures need to be enforced.
Now with Cyprus, these leaders and their globalist allies have taken this policy even further by sending a clear message that European banks are under THEIR control. In the era of the Internet this is a dangerous move. These days, people share information regularly and if they conclude they don't like the banking system, they will doubtless begin to create alternative systems for themselves.
Bitcoin, for instance, (and this is an observation, not an endorsement of Bitcoin) has lately been much in the news for its phenomenal appreciation – and that is only one of a number of alternative monetary solutions that are emerging.
Here's more from Reuters …
But that sideshow is still telling. It spoke to the new reality in the Eurozone: For anything to get done, it has to first generate an unnecessary crisis. There are so many moving parts to European Union bureaucracy that the only way to create action is with dire threats and tight deadlines. Most sane people now understand that the Eurozone is not going to fall apart, so Germany has to ring the alarm more loudly than in the past if it hopes to force change. In the absence of imminent crisis, the only way to implement deep, structural change is by harnessing the pain that market forces can inflict.
The Cyprus affair proves that the European Union has parallel crisis narratives, one that's playing out in the open, and another underlying one that gets less attention but is far more concerning. The Eurozone's existential crisis is over – whenever you hear or read or see a story claiming the Euro might collapse, know that it's 100 percent optics. Somebody (usually Germany) is playing somebody to try to get what it wants. But crisis, manufactured or otherwise, is still the only thing that will bring some change to the continent, and so crisis is what it will get – likely, for the next few years.
Europe, meanwhile, is suffering. Not only is every faux-crisis a distraction that derails policy leaders, it's preventing Europe from asserting itself as a collective whole. What, for example, is the European Union's foreign policy at the moment? The French are intervening in Mali, but more or less unilaterally. The Germans are friendly to the Chinese – some estimates peg Germany's share of China-EU trade at nearly 50 percent – but other key EU players are wary of that budding relationship. Of the 27 EU states, 25 stand in opposition to a French-British push to provide arms to the Syrian rebels.
When it comes to foreign policy, flaws inherent in the EU's design – and distracting debt crises – often leave it unable to operate as a cohesive diplomatic body. So what does all this mean going forward? What hope can we have for a continent and an economic zone that needs to cry wolf anytime it wants to herd the flock? If I were a European finance minister, I'd tell you that the Eurozone is in existential peril, even if that wasn't the case.
That approach allows a debt crisis in the European Union's smallest member to flare into the global spotlight. When another European "crisis" pops up — I hear Slovenia will be next (seriously!) – we'll be thrust back into the same panic we just moved on from. Cyprus may not have been another Greece, or set any precedents for dealing with debt crises going forward. But it did reveal the phenomenon of the "manufactured crisis" of market forces and media frenzy that we are sure to see again.
This is indeed a fairly incendiary editorial. But the conclusion the article reaches is that EU leaders ought to be franker with EU citizens about the reality of the union and its goals. That is not the conclusion WE reach. We think this article, truthful in many of its parts, is not being supportive of the EU even though the author thinks so.
The mistake we are talking about here is one that we have observed and others can make, too. Anyone can do this, can make a projection from Cyprus as a manufactured crisis to the euro crisis itself as similarly manufactured.
Here is the actual projection: What if the whole Euro crisis is manufactured?
Over time, this may be the most significant fallout of all. We've already mentioned on many occasions that top Euro-union pols had concluded decades ago that the only way to create a political union was via deep and agonizing economic crisis.
But if people begin to believe that the larger Euro-crisis is in part a manufactured one – that there are alternatives that could be exercised that are not being currently contemplated or initiated – then confidence in this great centralizing experiment shall crack further.
The author believes he is being wisely cynical and honest about the reality of the EU and Brussels specifically. But if people begin to believe they are being lied to on a fundamental basis about the current agony of the Euro-crisis itself, wouldn't that make things worse not better?