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Saturday 23 March 2013

Is a new domino effect, born in Cyprus ?

These last days are quite interesting for both Cyprus and Europe. Cyprus faces a haircut on deposits, the possibility of losing the competitive advantages had as a business center and exiting the Eurozone. Why? Because for many years local governments were spending more than they should, without worrying for the consequences. A significant annual amount was going to the huge public sector for raises and other benefits in order to secure their vote for the following elections. Was that fair or logic? Of course not. Money is scarce, coming from the public and should be managed for the public prosperity. It seems that the Cyprus politicians were so interested in buying votes that they finally left the rest of the island’s people broke. And now, it’s time for Cypriot people to pay an enormous bill.

Unfortunately, it seems that many other European countries are facing common (and possibly) worse issues. Politicians all over Europe failed to work, in the recent years, for their people’s prosperity. Greece is another example, worse than Cyprus. Adopting a political system where presidency has no real authority, having a parliament for both voting laws and executing decisions (against the Montesquieu’s tripartite system), Greece had to pay much earlier than Cyprus the lack in democracy and transparency. Even Italy, seems to follow the same path.

Both financial and public sector in Cyprus (and Greece) need restructuring. We desperately have to enforce law and elect visionary leadership since we failed to do it in the past years. As a reporter mentioned yesterday, Cypriot politicians (and Greek) were so interested for their public picture (in Radio and TV channels) that they finally didn’t do the job they were paid for. It reminds me Italy too, isn’t it? Is Europe responsible for this? Of course..

I was at High School when Toto Cutugno was singing “Insieme”, a song inspiring for a united Europe. I was dreaming for the day i could go across Europe, without my passport. The time has came but when i finally went, i realised the poverty, inequalities have caused for the majority of the european people. Dream had become a nightmare.. European people invested in a common future where their leaders never cared, designed or invested for. This, allowed international investors to manipulate the different regulations between Euro countries and create a huge systemic gap, finally leading to collapse.

It’s a common secret that Cyprus, Greece and many other European countries have to re-invent their model and strategy in the common market. For example, you can’t invest only on tourism and services for Russians and offshore companies. You need a much wider dispersion, in several other sectors, giving job and security to as many people as you can and allowing the others to innovate and create sustainable companies. Cypriot inhabitants need to have equal rights to remain and work in their island, for their island. So do Greeks, Bulgarians, Romanians, Spanish, Italian and Portuguese. The failure and inequality of the common market has to be eliminated in every European place, otherwise the gap will finally shake and the rest of the Eurozone.
The domino effect has started in Greece, created the PIGS effect, now passing over Cyprus and goes directly to the last two pillars, France and Germany. We can’t expect prosperity in European territory where Bulgarians are forced to work in Cyprus, Cypriots to England and Spanish to Germany or France for minimum wages. Fair labour should become a right for everyone and everywhere across Europe. In the recent years, people from Greece, United Kingdom, Bulgaria and Romania came to Cyprus, seeking for a better future. Cyprus gave job to almost 100.000 people from Europe but now many of them and around 60.000 Cypriots have no job and they must seek for new jobs in other countries.
Cypriot politicians, have their own, huge responsibilities for this. Counting so much on the Russian, British and other foreign capitals, they paid no attention on education, investments, entrepreneurship and innovation, for the local sustainability. Even know, many of them send their savings to other destinations, just before they voted for the haircut. The same lack of public interest is proven to happened to Greece, Italy, Spain and Portugal. Many countries are facing the same consequences due to their national lack of leadership. Even Ireland, which was the entrepreneurial leader,  the last decade! What is going on?

Europe has to re-discover a new model for the following years. Today, we need a strong answer, whether we should proceed to a common market by enforcing common laws and minimizing any inequalities were caused or, whether we should go back to our national currencies. It is not possible or acceptable to force the European people pay for their leaders’ mistakes, personal interests or/and stupidity. Neither we can accept this financial and social deregulation take us back to 1929. European people are demanding for answers. Everybody should have the right and chances for education, work and prosperity.

Now, it is the time to end the lack of supervisory and the increasing deregulation wherever was created and send whoever is guilty to the jail. Cyprus authorities found no guilties after the Cyprus stock market collapsed in 2001, vanishing billions of euros. What was saved then, having no other alternatives, was driven to the real estate sector, building a greater bubble. Now, we have pay the bill for those years. Billions of euros are also expected to leave Cyprus for other offshore destinations. I strongly believe that this is the least. A new systemic danger will occur because new territories are expected to welcome all these money and possibly repeat Cyprus’ mistakes.

After the years, where a common Europe was our dream, we discovered that today’s Europe has nothing common with what we expected. We have a place where the winners take everything and leave chaos for the rest. It is, today,  the time for Europe to create equal rules and measures for the European people, for the common future. If our leaders don’t or won’t, maybe it is the time for Europeans to return to their national currency and fight for their personal and national prosperity..

* Nicos Rafidhias, is a corporate consultant. He studied political science and international affairs and continues studying business administration. He is a member of the Cyprus Green Party and his personal positions are given to the party’s committees of Commerce and Tourism, Transportation, Communication and Finance.