Cyprus Tells The Troika To Take A Walk

Ruling party in Cyprus rejects troika's bailout demands
Cyprus’s ruling communist party, AKEL, rejected key demands in a proposal from international lenders, while pushing for steps that foster growth and for bailout talks to proceed, party chief Andros Kyprianou said on Monday.
AKEL, the party of Cypriot President Dimitris Christofias, cannot accept a proposal by the so-called troika that oversees euro-area bailouts to end the indexation of public sector wages and suspend the practice in the private sector for the duration of the rescue program, Kyprianou said in an interview in the capital Nicosia.
The party also dismissed the troika’s call for a privatization timetable.
“The package, the building blocks submitted by the troika lack proposals aimed at boosting growth,” Kyprianou said. “In all the other countries where the troika’s proposals were implemented, not only have their economies failed to recover, but their recessions have been deepened.”
Officials of the troika, drawn from the European Commission, the European Central Bank and the International Monetary Fund, are unlikely to return to Cyprus to restart bailout talks until at least mid-October, a Cypriot official said last month.
Kyprianou said talks with the troika must begin “without delay” and proceed “as quickly as possible so that we can conclude before Cyprus needs additional funds.”
Kathmerini (Athens), 02 Oct. 2012

The World’s Opinion Page

Help support Project Syndicate’s mission

subscribe now

Why, you might ask, is tiny bankrupt Cyprus quibbling over the terms of the bailout that it needs to avoid complete economic and financial collapse? The answer is: because they know what Greece and Spain know, which is that Europe will pay any price to prevent exit by any eurozone government, no matter how negligible.

Cyprus can play “chicken” with the Troika just as well as Spain. And because the bill is only around EUR 10 billion, they can be pretty confident that Europe will pay it before Cyprus runs out of money. The Cypriots are famously shrewd, and they won’t be rolled. Just ask Turkey.

http://prosyn.org/ktVKeAk;
  1. Television sets showing a news report on Xi Jinping's speech Anthony Wallace/Getty Images

    Empowering China’s New Miracle Workers

    China’s success in the next five years will depend largely on how well the government manages the tensions underlying its complex agenda. In particular, China’s leaders will need to balance a muscular Communist Party, setting standards and protecting the public interest, with an empowered market, driving the economy into the future.

  2. United States Supreme Court Hisham Ibrahim/Getty Images

    The Sovereignty that Really Matters

    The preference of some countries to isolate themselves within their borders is anachronistic and self-defeating, but it would be a serious mistake for others, fearing contagion, to respond by imposing strict isolation. Even in states that have succumbed to reductionist discourses, much of the population has not.

  3.  The price of Euro and US dollars Daniel Leal Olivas/Getty Images

    Resurrecting Creditor Adjustment

    When the Bretton Woods Agreement was hashed out in 1944, it was agreed that countries with current-account deficits should be able to limit temporarily purchases of goods from countries running surpluses. In the ensuing 73 years, the so-called "scarce-currency clause" has been largely forgotten; but it may be time to bring it back.

  4. Leaders of the Russian Revolution in Red Square Keystone France/Getty Images

    Trump’s Republican Collaborators

    Republican leaders have a choice: they can either continue to collaborate with President Donald Trump, thereby courting disaster, or they can renounce him, finally putting their country’s democracy ahead of loyalty to their party tribe. They are hardly the first politicians to face such a decision.

  5. Angela Merkel, Theresa May and Emmanuel Macron John Thys/Getty Images

    How Money Could Unblock the Brexit Talks

    With talks on the UK's withdrawal from the EU stalled, negotiators should shift to the temporary “transition” Prime Minister Theresa May officially requested last month. Above all, the negotiators should focus immediately on the British budget contributions that will be required to make an orderly transition possible.

  6. Ksenia Sobchak Mladlen Antonov/Getty Images

    Is Vladimir Putin Losing His Grip?

    In recent decades, as President Vladimir Putin has entrenched his authority, Russia has seemed to be moving backward socially and economically. But while the Kremlin knows that it must reverse this trajectory, genuine reform would be incompatible with the kleptocratic character of Putin’s regime.

  7. Right-wing parties hold conference Thomas Lohnes/Getty Images

    Rage Against the Elites

    • With the advantage of hindsight, four recent books bring to bear diverse perspectives on the West’s current populist moment. 
    • Taken together, they help us to understand what that moment is and how it arrived, while reminding us that history is contingent, not inevitable


    Global Bookmark

    Distinguished thinkers review the world’s most important new books on politics, economics, and international affairs.

  8. Treasury Secretary Steven Mnuchin Bill Clark/Getty Images

    Don’t Bank on Bankruptcy for Banks

    As a part of their efforts to roll back the 2010 Dodd-Frank Act, congressional Republicans have approved a measure that would have courts, rather than regulators, oversee megabank bankruptcies. It is now up to the Trump administration to decide if it wants to set the stage for a repeat of the Lehman Brothers collapse in 2008.