The Eurogroup’s new Bolsheviks

Cyprus Bank Crisis(Voice of Russia – D.Babich) The banking crisis in Cyprus became a real eye-opener for a number of  business people both in and outside Russia, providing an unexpected answer to a previously undisputed question – who is Bolshevist, East or West of Europe? For decades, it was an undisputed fact that the vestiges of Bolshevism are to be found in places like the former Soviet Union or its former allies in Eastern Europe. But the solution suggested by the Eurogroup to Cyprus – to slap a sudden levy of 10 percent or more on deposits of more than 100 thousand euro and a smaller ones for deposits of 20-100 thousand euros – was purely Bolshevist. And it clearly indicated the place where the modern Bolsheviks have built a nest for themselves. Most likely for conspiracy reasons, modern Bolsheviks chose the holiest of the holy of modern capitalism – the EU headquarters in Brussels and the German chancellor’s office in Berlin.

How else can one explain the logic behind the formula which the Eurogroup used  during its negotiations with the Cypriot president Nicos Anastasiades? The formula, most aggressively pushed by the chancellor Angela Merkel and especially the German finance minister Wolfgang Shauble, boiled down to taxing rich Russian oligarchs instead of poor German taxpayers. (Taxation looks very much like confiscation here, since a sudden shrinking of deposits of which the depositors had not been warned can hardly be called a tax.) Nothing would please the late Russian Bolshevist leader Vladimir Lenin more than this urge “to expropriate the expropriators.” The fact that Russian oligarchs could actually allocate this money to employ poorer people or to pursue some charity activities (a frequent occurence, rarely covered by the mainstream press in Europe) did not count for the Bolsheviks in Brussels and Berlin. Shauble is even reported to have pushed for a 40 percent levy instead of a 10 percent one.

The response to this new Euro-bolshevism was something that Lenin would have probably called “anti-Bolshevist solidarity of international bourgeoisie.” Russia’s political leaders and the European business press suddenly denounced the Bolshevist tendencies in Brussels and Berlin in exactly the same words, and sometimes with greater zeal. For the first time in 20 years, European press sided with the Russian government in criticizing the EU, instead of, as usual, shielding Brussels from Russia’s “old thinking.” 

If the Russian prime minister Dmitry Medvedev likened the “Euro-plan” to confiscation, London’s “Financial Times” accused the Eurogroup of “putting a millstone around the neck [of Cyprus] instead of throwing it a lifebuoy.” If Russia’s president Vladimir Putin called the plan “unprofessional” and “dangerous,” Der Spiegel’s financial expert Peter Bofinger called it “the worst of all possible solutions.” The Western experts and Russia’s leaders cited the same reason for their criticisms: a precedent of a “forced levy” would jeopardize investor confidence everywhere, setting off a sort of a “chain reaction” in Europe.

Not surprisingly, this position is shared by the Cypriot press and public opinion, which were clearly behind the Cypriot parliament’s refusal to ratify Eurogroup’s plan.

If this decision is accepted, not only all foreign investors will leave the banks in Cyprus, but also the Cypriot investors will withdraw their money,” said Stattis Kittis, a former member of the Cypriot parliament, in an interview to the Voice of Russia. “Why should they trust that there will not be a second “haircut” of their deposits. But worse, this contagion will not stop in Cyprus. It will have a domino effect on countries like Italy, Spain, Portugal. Investors will think: if these countries get into the same situation as Cyprus and if they apply for financial aid from the EU, they will most likely get the same answer – do your own haircut. But if we are supposed to get this money from the pockets of our own investors, why do we need the EU?

This is a legitimate question: why does Europe need this kind of the Union? For decades, the image of the EU in Europe and in the world as a whole was a positive one. The logic was simple. If two plus two makes four, then 27 nice countries put together would make Europe a 27 times nicer place. Or, probably, several times nicer.

Alas, the EU quickly revealed itself to be a cumbersome bureaucracy, which instead of helping Europe’s development, hampers it in a lot of spheres. One of such spheres is the external relations of the EU, particularly its relations with Russia. While individual European countries invite Russian capital and businesses, the EU devises more and more methods of discriminating against the Russian business. The “third package” of the EU energy legislation restricting Gazprom’s investments in Europe is just one of the examples. The drive is purely ideological, since one cannot see economic logic behind it. The fears of Europe’s becoming “energy dependent” on Russia, which in translation from Russophobic Newspeak means just receiving cheap energy from Russia, are indeed irrational. Even in the times of the communist Soviet Union this “dependence” was a boon for the European economy, why should it be an impediment with a non-communist (and, as we have seen, anti-Bolshevist) government in Moscow. 

Dmitry Afanasyev, a partner to the law firm “Yegorov, Puginsky, Afanasyev and Partners,” one of the largest consulting companies on Cyprus, sees a racially driven political motive behind the EU’s attitude. “In fact, the levy is illegal from the point of view of the EU law, and talk about “dirty money” from Russia smacks of pure racism,” Afanasiev said. “Bearing in mind that Germany spent tens of times more money bailing out Greece, it becomes evident that the motive for the levy is not an economic one, but rather a political one. The aim is to shut Russia’s window to Europe.

Indeed, this is probably the most Bolshevist thing about the Eurogroup’s initiative. Bolsheviks also wanted to shut Russia’s window to Europe – and they did it first thing when they came to power. 


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