Monday, February 25, 2013

Cyprus in the News

It has made onto page one news for Germans several times over the last two months.  Cyprus is in serious economic woes, and they'd like to have a "sugar-daddy" to sweep in and loan them some money for the current mess.  Later, they won't mention this part....but they'd like for part or most of the loan to be forgiven.  Germans aren't exactly eager to play this role....since they've been helping several other European countries out over the past year.

The elections in Cyprus yesterday....laid out the future for next couple of years.  A conservative party came to win the election results (around fifty-eight percent of the national vote).  There is some belief that some budget cuts, and improved spending habits....might lay out the way toward a small loan of sorts from the Germans to simply get the Cyprus folks clear of the immediate mess.

What everyone generally talks about (various media organizations) that the Russians have turned Cyprus into a money-laundering operation.  For this reason, German economic experts are against any help toward Cyprus.

The truth to the matter?  The Russian bankers in Cyprus could loan enough money and get various inside deals to make Cyprus another Switzerland in ten years....if they desired such an atmosphere.  I don't think the Russians are that stupid.  They probably see a very loose government with bad spending habits, and easy situations for Russian mafia giants to roam at well.  Why help them?

Connections from Cyprus back to Greece?  Yeah, it's not commonly mentioned in the press....but Greece's current economic mess is simply a magnet to their buddies in Cyprus. Both governments are free-spenders and highly corrupted.

My humble guess is that the CDU-led government in Germany will work up a very minor loan....which eventually comes from the EU....which might run from ten to fifteen billion Euro.  None of the money moves unless Cyprus does several major changes to their tax structure (hint: the Russians might have to clean up a bit).....and I doubt if more than a quarter of the loan will ever be forgiven.

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