A clever question finds answer

 

November 5, 2008

That exact day, Queen Elizabeth II visited the London School of Economics.

In the aftermath of the 2008 financial crisis, she asked a question that cut through layers of expertise and authority:

-        - why did nobody see it coming?

It wasn’t just a question—it was a quiet indictment of an entire system of economists, regulators, and institutions that had collectively missed the warning signs.

The moment exposed an uncomfortable truth: that complexity, confidence, and consensus can sometimes blind even the most sophisticated minds.

Worst days would follow and that question would coming back to my mind, again, again and again..

--

During the summer of 2012, at the height of financial uncertainty, the Cyprus Ministry of Finance quietly reached out all parliamentary political parties for ideas—ideas that would confront what many already feared but few were prepared to articulate: the possible closure of Laiki Bank. It was a moment that demanded clarity, courage, and technical understanding. Yet, paradoxically, it was also a moment marked by hesitation and a lack of readiness.

Laiki was bleeding. At the time, there was a striking absence of individuals equipped to tackle such a complex and sensitive assignment. The scale of the problem—deeply rooted in systemic banking weaknesses and the broader European debt crisis—required not only technical expertise but also the ability to think beyond conventional solutions. Few possessed both. Fewer still were willing to engage with the political and economic consequences that such proposals would inevitably carry.

Once again, that huge “why” came to my mind..

--

That night, that discussion, that level of information was shocking.. That was the moment I became certain Emma Zeniou was stealing the students’ grants. It had been going on for years, quietly, almost invisibly, and yet no one ever spoke about it. The silence felt deliberate, as if everyone understood more than they were willing to admit. Whatever was happening clearly involved too many people to be a simple case of misconduct—it was structured, coordinated, both inside the University of Cyprus but also within the National Office. The patterns, the missing pieces, the way transactions seemed to circle back without raising alarms—it all pointed to something far bigger, involving also the European Commission. To me, it no longer looked like isolated theft, but a perfectly engineered money laundering mechanism, both in Cyprus and Brussels, hiding in plain sight.

That moment, instead of “why” I started wondering “who” implemented that scam?..

--

As the investigation went deeper, a series of striking red flags began to emerge. Key European directives appeared to have been deliberately kept out of sight, while lawyers insisted in formal statements that no such regulations existed (Case 1562/2014). At the very same time, however, those same lawyers were presenting internal emails that clearly referenced directive-based claims. The contradictions became even more troubling within the two courts themselves: one judge (Marika Kalligerou) was formally informed that no directives existed or applied, while another (Myria Loizou) received submissions explicitly citing those “not existing” directives. Both statements originated from the same law office (Argentoulla Ioannou)—and remarkably, from the same lawyer (Stavrina Karakatsiani)—raising serious concerns about consistency, transparency, and the integrity of the entire process.

At that moment, the only question was “ how many are involved? ”

--

The way the Cyprus Cooperative Bank was ultimately shut down raised serious concerns and, to many observers, appeared deeply unjust. Closing the Coop in that manner felt almost criminal, as the approach of separating and merging so-called “healthy” and “unhealthy” firms  lacked clear logic and transparency. Rather than providing clarity, the process created the impression that decisions were being made to protect certain interests rather than to ensure accountability. Whatever was truly happening behind the scenes, it seemed as though those involved were more focused on erasing the traces of their own actions and shielding responsibility, leaving little evidence behind and many unanswered questions for the public.

At that moment, I had no question, I was just seeing it happening, once again..

 

Nicos Rafidhias

Book title: All the DOTS you have connected..

 

Order your copy here

 

 

 

 

Trading Game - Part III (Last) - Why Gary Stevenson matters..

During the periods I was studying for my Bachelors' degree in Athens, it was extremely obvious that the monetary policy was wrong in too many ways. I attended the University of Athens for free, I got free books and the bus ticket was extremely cheap. I also couldn’t explain why this personal observation was not relevant to the average Greek student. That was part of their own normality.

As I was born and raised in Cyprus, I was familiar with a different world. We were closer to the English system, our companies were more interacting with England and our financial model looked more like England. That gave us some extra benefits, English style knowledge, more money-making opportunities. When I first visited London, back in 1995, the whole experience was like moving to a bigger capital of Cyprus. There was something extremely awkward. The prices were too cheap for me. That of course was part of a monetary miscalculation that was eventually explained during the bust of 2013/2013.

The model of Athens was different. The people had lower wages and less money to spend, in comparison to a Cypriot. Everything was extremely cheap for myself, in Athens, based on my own salary. And because of that reason, the streets of Athens were full of Cypriot visitors, shopping cheaper than in Cyprus. Soon, many Cypriot companies went bust. There was an increased cost they couldn’t afford..

It took me a couple of years to do the math in detail. The Greek government was indirectly supporting the Greek citizen, for many years, in order to make life look affordable. This observation is identical with what the situation is in the UK. The governments make living affordable, through loans that the people will have to repay later.

Both Athens and London were also contributing to the European budget. That means that both countries sent money to Brussels, in order to support the EU mechanism. Salaries, projects, expenses. That is not necessarily bad, but in addition it’s not necessarily good.

If projects work, there is a benefit for the average citizen of the EU. If projects are implemented for laundering purposes, the bill will be revealed sooner or later.

By 2013 I was able to monitor and keep records on how the EU design was laundering funds for the oligarchs of the member countries. In the exact same pattern that the UK did during COVID. By 2015 it was too late for the people of Greece to prevent what was really happening.The country collapsed. Too identical to the existing trend in the UK.

By 2015 the situation was also really bad and extremely obvious for the UK residents.

People paid a bill that went to a black hole. This is an extremely simple explanation for the BREXIT results. Whoever paid and couldn’t afford to continue paying the on-going scheme, had to put an end to it because they couldn’t afford the continuous, increased bill.

The exact same situation was too obvious after I permanently moved to England. I was not able to clearly understand the “why”, but I could notice that there was an indirect support to the businesses that caused increased instability. Main key point, the extremely low taxation for those who controlled the profits in comparison to extremely high taxation for the lower incomes.

When the Conservatives lost their seats and the Labour Party won the majority in the parliament it was too obvious that the damage to the economy was irreversible. The past governments (Conservative/LibDem) lowered the taxation to the business world and at the same time provided financial support to the general public in need through increased loans that we will have to pay in the future.  This combination of low taxation for the profit making industries in addition to an indirect but continuous support to the problematic financial model and the direct benefit would explode at some future time. IT happens at this time, as the late Hyman Minsky perfectly explained decades earlier.

This explosion occurred during Boris Johnson, Liz Truss and Rishi Sunak. That was the simple reason the Labour Party won that huge majority of seats. The problem was that the Starmer administration was not experienced enough or prepared enough to fix the long-term problems.

I have to be fair on that. My own studies and research allow me to understand and identify early enough. Too many of the politicians (applying to any country of course..) don’t really have any similar studies and experience to do the job. A perfect example is the United States. Trump keeps trying every possible methodology he thinks, in order to hide the increased instability. Yet, it still is not working..

Most of the current team administration and the previous of course (both in the UK, Cyprus and many other countries of course..) are there for the pay check and the benefits they forward to their own peers. They make it too obvious if we closely observe the OPEKEPE scandal in Greece.

So, just to reward Gary Stevenson, since my article started with Gary Stevenson in mind. He explains in amazing detail why the past administration failed and why the current administration still follows an expired methodology. Although Gary Stevenson is described as Leftish, I personally disagree. He is a good thinker that notices what goes wrong. I believe I do the exact same for my own clients..

I am not considering myself as a Leftish. I am not considering myself as a Rightish. I consider myself as a person that identifies early enough what the administration should do and I prepare myself and my clients for the bad scenarios, if and when they appear.

I was doing the exact same thing when I was working in Greece and also when I was working in Cyprus.

The forecasting is a service to prepare the mass of the population and the business world  for the periods the administration will fail to do the right things. 

This is the reason I decided to explain, on my own approach, why everybody should read “The Trading Game” and watch the “Gary’s economics” channel on YouTube.

Our job, as the normal people, the professionals, the business owners is to protect ourselves from the malfunctions of the administration. Every time they occur, every time they become too obvious.

Whoever wants to reach the extra mile on the topics, do please get in touch and message me for more details.

Nicos Rafidhias

https://www.linkedin.com/in/nicos-rafidhias/

Trading Game , Part I : The times when memories bring also valuable facts from the past

I have to admit that I am a great fan of Gary Stevenson and his podcast series called “Gary’s Economics”. Gary Stevenson was a Citigroup trader. He was extremely successful, according to his own words. I am not able, of course, to verify whether he was a successful trader as it is not relevant to my own purposes or research. Stevenson speaks clearly for the “Whom you know” bubble. The people in the bubbles that control the game. This is my primary interest. The people that play the game, too many times without any valuable skills.

I have also noticed a few third-party posts saying that his claims are not always accurate and that there is a different story in many of his own claims. This is not something I would be interested in investigating further, since it’s not part of my interests or capabilities. My own research involves Gary Stevenson as a book author. Gary Stevenson wrote a book called “The Trading Game”. I was amazed to notice too many little details that allowed me to understand the period that Lehman Brothers, Cyprus and Greece went bust. As a well prepared book, it allowed me to bring back memories related to the Lehman Brothers bust, the stock market industry, the Northern Rock boom and bust, the RBS boom and bust, what happened before and what followed that period.

What is the most interesting issue for my own research and book writing is that he mentions and also explains too many things that I started studying thirty years earlier ; wrong doing and money laundering implemented by the National Governments and their private sector peers and in addition the effects they cause to the increased financial instability of the public economics and the Ponzi financing patterns they create. Greece, Cyprus, Ireland, the UK, France or Germany, they all play the game badly. In the end, every time, the general population received the bill.

In addition to this information, there is great detail regarding the financial markets inside stories and the side effects they cause to the normal and basic economic operations. I was part of this “game” around fifteen years before Gary Stevenson. The story was then exactly the same. Some privileged people, as Gary Stevenson mentions, earned large amounts of money from extended speculation. As happened a few years later with the Greek economy. The Greek economy was “stable” for a decade but the real truth was that it was in a very bad situation for many decades. The Greek governments were borrowing massively. A very common practice of almost every government. The interest during the first period of the Euro was equal to Germany’s for some years but when things went really bad, it was way above the average and that activated and increased the financial instability, also known as Ponzi finance. We all remember what followed.

During the last act, the Greek government had to ask for a bailout from the TROIKA.

The TROIKA approach failed exactly like any IMF approach in the past.

You need extremely high skills to design and implement a viable restructuring model and according to my own research both TROIKA and IMF have no interest in that. Their goal, at that moment, was to save the exposure of France. A combination of failures including the trading giants and the public sector inner gang. The government of Greece played the game. Also badly.

The instability in Greece eventually caused a hidden instability for both Germany and France. Here is the main observation I was interested in. Under the normal and basic operations of any unit, meaning a house or a company, you need to have balanced economics and limited exposure. It is not possible to keep imbalances for long. Eventually, you will be out of the economic circle and the competition will buy your business or steal your market position.

This is why “The Trading Game” is an exciting reading. We can see when the traders take advantage, the time the circle of a company or a country is completed and how much hidden cost the ordinary people have to pay without even noticing it. Both directly and indirectly. Yesterday was Portugal, Italy, Ireland, Greece and Spain. Cyprus followed. Today we have reached the core of the problem, the UK, France and Germany. What happens at the moment and what I expect to follow will be explained in the following part where I will remember the days of the Yellow vests..

Nicos Rafidhias studied Political Science and European integration before and during the creation of the European Union and the Euro Zone. 

LinkedIn: https://www.linkedin.com/in/nicos-rafidhias/

Personal page: www.nicosrafidhias.co.uk

Business page: www.officeofis.co.uk

This article is part of his recent book regarding the boom and bust of corporations and countries. 

 

END OF PART I

Why France is the new domino effect victim of the Eurozone collapse..

In a recent edition of atlantico.fr there is a very interesting article about the new patient of the eurozone, France. Not a surprise for whoever read my previous blogs or understands the basics about macro-economics. France is obviously collapsing and this is not a surprise. Al least is you are not another boiling frog.. The majority of the eurozone members are currently facing situations between the "Bubble" and the "Ponzi" pattern and this proves that the collapse of the Monetary Union is much more possible, due to the continuity of the past mistakes. But, why is it so obvious, especially for France? France is currently extremely expensive, as a destination, has low productivity and offers overvalued quality in most sectors. So, the only possible way for France is to rightsize. The rule of the economy pattern is stability, growth and normality while correct measures are adopted, becoming a bubble when you fail to act effectively on time and if you still pay no attention to the problems it is converted to a Ponzi scheme and finally collapses. This is the fact and France is currently between the "Bubble" and the "Ponzi" since no correct measures are adopted.

After the the Latin Monetary Union and the Scandinavian Monetary Union break up, the Eurozone collapse is for me so obvious due to the irregularities the monetary systems create to their members. Different countries, adopting the same currency but still choose to act individually, enhancing inequalities within their borders and within their trades. The truth is that today's eurozone, instead of a single currency, still has national euro currencies "pegged" and every time each country fails to follow the rest needs to find ways to debase the national euro. As the member countries of the 19th and 20th century needed to have enough gold and silver to support their national currency and circulation and forced to leave the union the time of the shortage, today we still haven't realised that nothing has changed since then. We need a surplus to support our inner economy or we need to sell something (such as the public property) in order to find new income, the time we fail to achieve a surplus or at least a break-even point.

Cyprus had serious macro-economic problems for decades, especially due to the increase in salaries and benefits. Being "pegged" with the British pound had to keep harmonizing the local economy with the British, in order to have the British tourism and real estate investors, two of the island's most important incomes. Every time the cyprus pound was becoming expensive, for the island's major visitors, Cyprus was losing tourists and investors, forcing the country to find some ways to become more attractive again and, of course, cheaper. The cycle was doing the same round. Being cheaper, attracted more tourism, again becoming more expensive for a few years and need to follow the same patters once again. Until Cyprus entered the euro zone area and the basic rules changed. Cyprus continued to give raises to the public sector and benefits that couldn't afford in euro terms, any longer. Since the system was impossible to follow the local pound cycle, in 2013 after receiving loans that couldn't serve any longer, was forced to the bankruptcy, the haircut and the Troika memorandum. At that time, the only alternative was the return to the Cyprus pound. But, of course, it was not a serious solution since it could create the same pattern Greece followed during the Drachma period. That time, i remembered Karl Marx's statement, history repeats itself, first as tragedy, then as farce.. And within the euro area, too many farces will follow..

Greece had almost followed the same pattern, during the Drachma period. Unfortunately, Greece had higher levels of corruption and lower productivity within the past decades. Greece has a serial default problem because productivity was never positive, the public money vanished as the icebergs do and Figures were always misleading, as the Greek officials had to admit in the last years. So every few years Greece had to lower the drachma currency. The measure proved that Greece has no positive income, and continued transferring the massive debt to the people, without officially admitting it. The time Greece adopted Euro, nothing really changed but the rules, as happened in Cyprus after. Productivity remained low, corruption continued, donating even the european funding to specific people and finally Greece had to find new ways to rightsize the inner economy, remaining in the Euro area. Troika had no experience to understand what was really happening, as few years later also faced in Cyprus. The fact is that if any country has no willingness to fix the long-term internal problems, no Troika nor international institution is capable to do it. Instead of believing that Cyprus, Greece or any other country is today in austerity procedures, we have to admit that all these countries have to follow an one way road, the right-sizing procedure, away from the "Bubbles" and the "Ponzi" . Some people, in these countries, stole so much money during  the previous decades and today the rest of the population are forced to pay the bill.

So, as a general rule of economics, each country that creates or chooses a fake prosperity model, and designs a non viable environment, sooner or later needs to find ways to become attractive once again. And till that time, there is no alternative than the road to the bottom. The situation affects foreign investments to these economies, as well. The billions invested in the Cyprus banks by the Russians in the last decade and the billions invested to the Greek banks in the last two decades, by the Cypriots and the French, were transformed to billions of losses for all those foreign investors. Today Austria faces the same problem in Hungary and the story goes on since many other countries, banks and enterprises will follow. When the Cyprus and French banks entered the Greek market they did nothing to help the market become more efficient. They decided to copy the same pattern the greek banks adopted in the recent decades. High interest rates causing low or fake productivity, Bubble and Ponzi results. It was impossible to hide the truth for ever. It was impossible to keep that system live either. They kept lending the greek market with high interest rates, as they used to do in the Drachma times, enhancing inequality with the countries that adopted the real eurozone rates. That market was neither competitive nor profitable, it was converted to a bubble and then to a Ponzi, waiting for the collapse of the cycle.

Failing to harmonize the eurozone economies will continue creating bigger problems. Greek companies simply couldn't compete the German, in the long term. French markets can't compete the Italian at the moment, as well. After a few years, the current problem will be even bigger, more dangerous and definitely non viable. Returning to the local currencies is a kind of solution but not viable as well. Leaving the euro sends us back to the system that hides the problem and creates the serial default pattern of the Asian tigers and the Latin economies. The truth is that a common currency reveals and exposes the national fraud and illusions. So, as a primary rule, being in the common currency forces us to become transparent and efficient.What we hoped for European integration was a European Family where transparency and equal rights exist. What was created was a long-term party for very few organisations and banks. 

The most tragic issue is that i keep finding too many similarities between the Greek and the French administration and many other similarities between the Cyprus and the European authorities. Since we all know the current situation of Greece and  Cyprus we may easily simulate what follows for France and Europe as well.


Nicos Rafidhias (official page) is a political scientist and a corporate consultant at TANTAK Ltd (based in Cyprus). The above data are part of his upcoming PHD research for the possible collapse of the Eurozone.

Ponzi schemes, white-collar crimes and the Eurozone failure..

A few days ago, an old professor of mine posted the following message on her facebook page :

" Those who don't study history are doomed to repeat it.

Yet, those who do study history are doomed to stand by helplessly while everyone else repeats it. "

It is quite easy to enter the second group by reading Paul Kennedy's masterpiece " The rise and fall of the great powers ". Although, you have to be prepared that you pass to a group of a distinctive minority, the people who know but can't fight the majority in any way..

One year ago, Cyprus got bankrupted. People lost huge amounts of money, younger generations lost the majority of their pension funding and the island's economy might recover sometime but only after many decades. For the majority of the people this was something strange and unexpected. Those people never investigated what was really happening in the last fifteen years or what the norm in small and isolated societies like Cyprus is. I believe that it was not a surprise for everybody. It is totally different to say that it was a surprise and totally different to pretend that it was a surprise..

Last year, we were officially bankrupted. But in the last fifteen years we had two other, "unofficial" bankruptcies. It is quite impossible that last year's incident was a surprise since an important number of people in Cyprus have Bachelors, MBA and/or PHD degrees. Although, it is quite possible that people in charge pretend that everything was ok since those people were receiving huge salaries based on their degrees and expertise. But it is also totally different to have the expertise and totally different to pretend that you have the expertise. You can separate the two by reading Paul Krugman's classical article "A country is not a company". Krugman remarkably separates a person capable to do the job from a person that pretends to be capable to do the job. Last year's bankruptcy reveals that we had more actors and less skilled people in our government.

People of my age (39 years old, more or less) were raised in prosperous times. For many years, we had enough money, really good money.. It was just after the Turkish invasion (1974) that the new Cyprus miracle started to happen. At least that was what we thought we had.. An important number of British tourists were bringing part of their profits and prosperity to Cyprus for many years, enhancing our as well. During my Bachelor degree studies, in Athens, and the collapse of the Cyprus Stock Exchange bubble i learned how to discover the healthy environments and separate the Ponzi schemes and the white-collar crimes. I was lucky because i used this knowledge to protect my friends and family from time to time. They still believe that i am extremely smart. The truth is that even some people can separate healthy economics from fraud nobody dares to notice it in public.. During my MBA studies and my Erasmus period experience in Paris i was lucky to separate the healthy environment of studies in a european country from the fake and over-priced knowledge of an isolated island. It is totally different to truly study a field and be capable to notice and fix a problem from buying a degree in class where the professor is not able to be listened if she forgets her whistle at home (this is how things are in Cyprus..)

How can you separate a healthy environment from a Ponzi scheme or a white-collar crime ? In a company, you just count the earn per share, whether it is a repeated pattern or a one-off profitability. Additionally, you observe whether the company has enough reserved profits for an unexpected situation. In a country, it is not that simple. You have to compare the salaries, the taxes, the pensions, the quality of life. A simple measure is the "homeless factor". In Cyprus, we had no homeless people. At least, in the recent decades.. This is a proof that the country can manage their people, rich and poor. First time i saw homeless people was in Athens, in 1995, then in UK, Germany and France. Seeing homeless people is for me a proof that a country is not able to handle a simple problem ; create prosperity for their people. Because (in a political scientist's mind) if you can't find a solution for a few people, the problem becomes bigger until the whole system collapses.

In the existence of the "homeless effect" you have to decide whether you fix the problem or you hide it. By fixing it, you create stability and you put these people back to the circle of economy. They produce and they spend. By hiding the problem, many people (mostly in government and big corporations) are allowed to get huge salaries and bonuses. The problems is not so obvious or important for them. You get the extra money by hiding the problem, you exclude the homeless, you dot't count them so one day they become a mass. Some years ago i was shocked watching on TV people putting fires in every corner of Athens. But i knew what was going on there and that that the consequences revealed.. Some months ago i was shocked watching on TV people putting fires in every corner of Paris. After my last trip there, it was obvious that they copied the steps and results of Athens.

In the recent years, the public sector and the big corporations of Cyprus used to receive raises and bonuses that the system couldn't handle any longer. Especially in the annual reports of the public companies, it was more than obvious.. In the recent years we faced the fact that many higher government directors received around 100.000 per year, some of them 160.000 and more (bonuses excluded). How reasonable is for a small country like Cyprus paying monthly salaries of 10.000 euros or even 5.000 the same time an important number in the private sector were losing their jobs or part of their salary? What if we were in the middle of a crisis no-one could really imagine or care for. It is more possible than you can realize, but only if you know how to observe and analyze the numbers. Even worse, the merge of Bank of Cyprus and Laiki Popular Bank last year, as a solution to the problem ! Since those two institutions were both dangerous for the stability of the financial system, how was possible for anyone to decide that their merge was a healthy step and a vital solution ?

Why the above data remembers me the PONZI schemes? Because the PONZI schemes use other people's money to get their salary and a raise as long as they can.. But.. PONZI schemes always collapse as Cyprus did..

Why it remembers me the white-collar crimes? Because the white-collar crimes use other people's money (in this case, the taxpayers social insurance funding) to pay their debts and legalize their illegal actions in a country that the financial crime is legal. 

Our banks used to give huge salaries and bonuses their annual reports couldn't justify, our governments used to give raises our National Audit report office couldn't explain and one year before the Cyprus taxpayer had to pay the bill for them.. Even worse, the european funding, designed to improve local competitiveness and expertise can't always go to the beneficiaries. They remain in the government bank accounts and the banks as interest-free cash! Hyman Minsky described perfectly the development of a PONZI economy in the '80s. He was unlucky to describe it in a period of prosperity so nobody paid attention. It took us three decades to accept the existence of the Minsky moment and that "IT" happens all the time and everywhere, all over the world!

Another extreme PONZI method in Cyprus was the COLA (Cost Of Living Allowance) bubble effect. COLA was designed to give extra financial support to low income people and not to people already receiving thousands of euros as monthly salary. COLA in the beginning was supposed to protect people that needed food, milk and bread for their daily needs. At the end of the PONZI, COLA was a financial benefit for high income people who wanted to buy a new beach property.

What is the biggest problem in modern societies? Corrupted people, or even worse, corrupted governments or / and parliaments. Political parties dealing with unions in order to buy their vote and become government, banks financially supporting political parties in order to protect and legalize their individual interests, political parties dealing with black money, parliaments refusing to vote against it. The last fifteen years, the Cyprus house of parliament tried to create openness to the parliament parties funding (revealing who - how much - how often was giving financial support). These last fifteen years, our political parties couldn't (or wouldn't..) vote for the openness for their income! Even though we can't say that specific members of our parliament are corrupted it is quite obvious that the House of Parliament in the majority tends to cover and protect corruption ! Even worse, our Government. In the Cyprus constitution, both the government and the parliament are entitled to pass a legislation. Both denied !

Cyprus was a prosperous country as long as the inequality was managed. The time the governors decided to allow few people to become the robber barons of the 21st century (see "Plutocrats" by Chrystia Freeland), the time they decided to give extra raise to people that had no need by stealing from the people that needed support the new Ponzi scheme design and collapse was unavoidable. Cyprus became Greece as France is nowadays becoming Cyprus.

The current Cyprus administration has to deal with a very serious dilemma, fix the problem or hide it. Based on my experience, every new administration covers the problem. The majority of the government and parliament can't (or won't..) understand it so the problem is always there until the next official of unofficial bankruptcy.One year after the new administration took over, they problem is still there. One year after, nothing was fixed. So we know what will happen again, sooner or later..

This distinctive white-collar crime is a reason why the Eurozone can't be vital for long. Since some countries tend to support and protect corruption more than others and the Eupopean Union as a body pays no attention to the issue, it will enhance the inequality withing the members until it will lead to the Eurozone's "perfect storm" day.

In the next post, we will examine how the problem is created and why nobody wants to fix it..

Nicos Rafidhias (official page) is a political scientist and a corporate consultant at TANTAK Ltd (based in Cyprus). The above data are part of his upcoming PHD research for the possible collapse of the Eurozone.

  

Still looking for sustainability..

Hello. I am Nicos, blogging again but.. tonight i feel like a writer !
Since i joined Coursera i am a little bit of everything and honestly, i love it.
I feel that life-long learning helps you complete a puzzle that can't be completed if you are not well prepared and ready to accomplish it.

At present, i study "English composition" and as the instuctor states, if you write then you are a writer.. Well, actually i am a blogger for about three years, blogging in Greek for whatever happens around me, critisizing governmental policies, local (district) issues happening in my municipality. Since last March i decided to share my knowledge in English. The bankrupcy of Cyprus was something i expected but since i have some answers for what happened i have to share this knowledge with people that might find the same problems in the future. Like the French..

Bankrupcy in the Eurozone countries is something that should be expected as norm due to the inequalities of the Euro-system. For example when Greece joined the Euro, was forced to devaluate the national currency by 15%. This was the start for the collapse of the whole Greek system due to an obvious fragility nobody analysed. They entered the Eurozone but kept the lending interest extremely high. Imagine that you are a company that produces jams in Greece. You have a bank loan with 10% interest rate. Now imagine your uncle who lives in Italy owes a factory that produces jam in Italy, working with a bank loan of 7%. And to make the case more ineresting your cousin who lives in Germany, works for a factory producing jam (WOW!) and they have a loan paying just 4% interest. You all are part of the Eurozone but someone is lucky to have a low interest and be more competetive! Well it's just a case study.. but.. it seems that the factory in Greece will start loosing clients due to lower cost prices in Cyprus and Italy. After a few years, the factory in Italy will start losing clients due to the fact that the German factory sells cheaper. Finally, the German factory will be the only one that sells the jams but.. the people will not be capable to buy jam since they are unemployed ! So... they import jam from Bulgaria. It's cheaper due to the currency difference.. Let's pause the case study for a while..

The first exersice of this class was to create my timeline and by creating my timeline, i realised that my life makes circles. In 1995 i went in Athens for studies. I wanted to become a political scientist. Actually, i remember that when i asked my school councellor, back in 1992, whether i should study political science she replied that it was the best study she could think for me. What a normal wannabe political scientist does? Well for me was to ask for a meeting with my favoured politician which was Antonis Samaras (back in 1995 he was a wannabe prime-minister..). I was happy the day i was finally meeting him. Big disappointment followed since i was informed that our appointment should be postponed due to a funeral of a lady. I couldn't understand why he had to go to the funeral or who the dead lady was.. As i realised a few days later that lady was one on the most powerful and respected newspaper editors in Athens. Eleni Vlachou was a legend in the country but.. a 19 old year boy, living far away never heard of her..

Days later, i finally met Antonis Samaras. I was amazed. He seemed a nice guy. I still believe he is. But.. after i started analysing the Greek political system i found out that you can't really change anything.. The system was so complicated designed that it was already half dead. It was too obvious that this system could never work so i decided to study but not to enter politics. That time the Albanians gained the priviledge to enter the Greek market and work. Greek businessmen could hire Albanians insted of Greeks and pay them lower wages due to the huge black labour market Greece had. Well.. eventually, this gave to the Albanian people money and sent Greek people to unemployment. Ten years later the same pattern was adopted in Cyprus. After entering the Eurozone, Cypriot employers could hire cheaper hands from Bulgaria and Romania. Those people came to Cyprus and entered every sector since they were cheaper labour. The same result happened to Cyprus. Cypriots were unemployed, they stopped spending and the system crashed.

As it appears nobody analysed what inequalities cause. The people designed the Eurozone hoped that they could achieve higher quality in living and education but... they forgot to create the proper legitimate system in order to make the vision successful. In countries where law is not respected, you have to expect a continuous downgrade. A downgrade that will be spread all around the rest of the same system countries.

I left Greece in 2007 knowing what will happen. In 2013 i decided to leave Cyprus and move to France.. Cyprus is dead because of those hidden inequalities no one wanted to fix. The stockmarket collapsed in 2001. Nobody wanted to discover why. That was a sign of corruption. The scandal was forgotten and nobody found guilty for the crime.. The bubble party moved to the real estate and the banking sector for a few more years.. BUT.. when you hide or backsupport the criminals, the crimes continues..

In Paris, i tried to contact the politicians i hoped they cared. This time, i was not so lucky. I got no appointment.. But.. i found a similar system, like in Athens and Nicosia. Inequalities in Paris are too obvious. Too expensive accomodation cost, expensive transportation, average salaries.  Is France the next victim of the domino effect? It is extremely possible.. Why? A significant explanation is because they have too many homeless people. As i saw in Athens, back in 1995, nobody cared for homeless people. Nobody cared to find a solution for them, a house, a bed, a way to make them useful again even in order to help them start spending again. Paris in 2013 gave me the same picture as Athens in 1995. Many people live in luxury, other just handle it roughly. But.. if you lose your job, you are just another homeless guy and nobody cares about you.
Last shock was the collapse of Fagor. This was something i couldn't really imagine of although it is part of the domino effect. Having no extra money, having no savings, you have no luxury to buy a new fridge.. So.. since a country can't give a solution to simple problems like finding solution for the homeless people, what will do in a more complex situation as the increase of unemployment?

Don't think of it.. Because it is a nightmare scenario.. In my experience, people without strategy and vision eventually lead to a mess. Especially the "leaders".. So.. It's the time to find a solution for the problems or.. the time to expect the upcoming nightmare..

* 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. This article was written hoping that some "leaders" will read it..

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.