EUROBLOWN: Could little Cyprus cost Merkel the German election?

How odd it would be if Cyprus was the straw that broke Merkel’s electoral back

Suddeutsche Zeitung is reporting this morning that the SPD may block a Cyprus bailout on the grounds that it refuses to support tax dumping and money laundering. SPD chief Sigmar Gabriel is quoted as saying that the SPD could not approve a package for the Cypriot banks on the basis of current information available. If Angela Merkel were seeking SPD support (which she will need to get the package through the Bundestag), she will have to come up with good reasons, he said….a scenario he clearly considers implausible.

As the Greens have the same reservations about Cypriot banks, a Bundestag majority is not guaranteed. The article also quotes a German CSU MEP, who demanded a guarantee that the money goes to help the citizens of Cyprus, and not the oligarchs of Russia. The paper quotes government sources as saying that Merkel will only accept a package unless Nicosia accepts radical reforms (but did not say what that meant in practice). Cyprus has asked for a package of €17.5bn, of which €12bn is earmarked for the banking sector. The timetable is for the package to be approved by the eurogroup on February 10th.

There is of course a great deal of geopolitics involved in the Cyprus issue, concerning Turkey, Greece, Israel, the US, Russia, rare earth minerals and of course not forgetting oil. However, from a German social democrat perspective, the potential for Merkel-mashing in this situation may yet bring alive a BundesRepublik general election that was threatening to be the most one-sided affair in history.

In a SudZeit editorial, Claus Hulverscheidt writes that the Cyprus issue comes as a stroke of luck for the SPD and its struggling candidate, Peer Steinbrück. He notes how the party had been searching for a showdown with Merkel for years, and that this is politically an ideal, almost too good to be true-type of opportunity. Considering that the SPD’s reservations are shared by the vast majority of the German population, this may well have important political resonance for the German mild Left.

Earlier at The Slog: Is Cameron under siege?

32 thoughts on “EUROBLOWN: Could little Cyprus cost Merkel the German election?

  1. Let the people starve, suffer and be reduced to the level of dark age surfs as long as the banks are OK.

    How long will the German people hand their hard-earned over to keep ‘Le Project’ staggering along and the banks well fed? Until they to are reduced to starving, suffering dark age surfs…. stunning what stupid people will put up with.


  2. ‘The Project’ will keep going. The yanks have just told us to keep at it.’


  3. “The article also quotes a German CSU MEP, who demanded a guarantee that the money goes to help the citizens of Cyprus, and not the oligarchs of Russia”.

    Hear, hear! Politicians are beginning to ask what all these monies are being used for. They want to see that the monies go to help the citizens and certainly not the Russian oligarchs.

    If they had only taken this stand from the very beginning (add banks, hedge funds, etc. to Russian oligarchs), the Eurozone would be a lot better off today. However, it’s never to late!


  4. Oh, just business as usual, how many times have we been here before with the Bundestag? They will all acquiesce when push come to shove, just a bit of showboating along the way. Merkel will get her own way.


  5. @kfc. I agree with you. This charade will continue until the perceived problem changes from a “euro-survival” crisis to the economic and fiscal transfer crises that are the real problems. At present, the euro’s continued existence is deemed proof of its success but in reality this “success” is only making the real problems worse. Like you, I think patience is required to see the end game.


  6. yeah too true, so who are they bailing out then?
    …and why does a laundry need a bailout, they should be going there to help Greece.


  7. My hope for the year is that one country is ground so badly into the ground that decent people will rise up. I also hope Saint Merkel gets her richly deserved comuppence.

    My apologies to the country concerned, but this neocon sh1t must stop.


  8. Pingback: John Ward – Euroblown : Could Little Cyprus Cost Merkel The German Election? | Lucas 2012 Infos

  9. The irony of course is that Merkel created 100% of the problem in the sense that the whole PSI idea was a German avoidance scheme of refusing payment at all cost and instead using Greek banks to pay the bill. This scheme had the following unintended consequences: During the initial PSI 1 the Greek banks were raided to the tune of 55 Bil. euros.

    As if this was not enough they were raided again in December 12 for an additional 32 Bil. euros. Add to that a deposit flight due to Grexit terror of 82 Bil. and a 55 red loan provision, because now Greek citizens in a “monkey see, monkey do” format want the same haircut from the banks that their government so easily received. You may yawn at these numbers but their summation happens to be greater than the entire GDP of Greece and the loses all happened within a year.

    In the Cypriot case the damage was already done from PSI 1 due to the small size of its economy.

    So there you have it: Germany raids foreign assets to avoid payment herself; in addressing the ensuing economic collapse Germany wants to “reform” you instead of paying for the damage created. It all sounds like a pretty respectable Broadway show to me and I would be laughing if I were not knee deep in it.



  10. It really does have to be one of the most disingenuous plays in history. Hope you’ve got a decent pair of waders; we’ll all need them soon enough.


  11. If anyone actually believes that there is a two-way “special relationship” any more, then they are delusional. All treaties with the US exist for the benefit of the US. Even the abbreviation “US” tells you in a Freudian way who it is meant to serve.

    In any case, the American sales forces would not leave us alone, in or out of the EU. I myself, would rather like to see non-EU goods on the shelves once more; NZ butter, lamb, jeans at £5 a pair?


  12. Nothing new here. As the CIA’s dirty-tricks squad was behind our initial entry to the EEC and manipulated the 1975 Referendum, the only difference now is that the USA feels confident enough to be more open about applying its pressure in public.
    All the more reason to get the f*ck out of the EU to stop us being shafted by all sides.


  13. @Marie
    The City of London (via the Crown dependencies and British Overseas Territories) is the grand daddy of money laundering.
    Cyprus’s money laundering is minuscule in comparison (their GDP is only 0.2% of the Eurozone)


  14. If you do a search for “Lord James of Blackheath” + “Foundation X Speech” (01/10.2010, I think), you will hear Lord James admit money laundering and it no good calling the police, ‘cos he done it’ at the behest of the Bank of England


  15. Pingback: BRAVE CYPRUS POKES EC IN THE EYE, POLS FLY TO MOSCOW | The Slog. 3-D bollocks deconstruction

  16. Pingback: John Ward – Brave Cyprus Pokes EC In The Eye, Pols Fly To Moscow – 20 March 2013 | Lucas 2012 Infos

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