The entire bailout of Cyprus
is essentially a wholesale theft of national assets
The Cyprus Political Crisis post-1974
In July 1974, in
the face of an airborne invasion backed by the armour of NATO member Turkey,
200,000 Greek Cypriot citizens ran from their homes with only the clothes on
their backs. The Greek Cypriot armour and infantry were no match for the second
largest standing army in NATO, equal in size to the British and French forces
combined. The Greek Cypriots were easily routed. The victors conducted summary
executions of thousands of their prisoners and threw some of the bodies down
wells to hide their crimes.
37% of the island
of Cyprus was taken; 50,000 Turkish Cypriots fled north and took shelter in the
homes abandoned by the Greek Cypriots; 200,000 Greek Cypriot refugees fled
south and were housed in tents, in the same way that hundreds of thousands of
Syrian refugees are now sheltered by the Turkish Government in 2013.
Yet so began the
housing boom in Cyprus. Refugees in the Turkish-occupied North had the pick of
thousands of abandoned homes. Refugees in the South had to build their own. The
Cyprus Government parceled out plots of government land. The banks would not
give mortgages on state land so the Cyprus Government stepped in and funded the
construction industry.
Political
opportunism was not far off. During his election campaign Former President
Glafcos Clerides allegedly promised to give Greek Cypriot refugees temporary
title to thousands of Turkish Cypriot homes and land. Once he was elected, the
program was halted. He handed out 8,000 Government jobs to party cronies in his
10 years as President, perhaps by way of consolation.
Patronage,
cronyism and clientelism have been the hallmark of government control in both
the South and occupied-North of Cyprus. Since the Turkish occupation,
employment in the State sector in Cyprus has been used to reward party loyalty
(and to incentivize elections). The civil service in the free Republic of
Cyprus has grown from 18,000 workers in 1978 (costing €36 million in annual
salaries and benefits), to 70,000 workers in 2012 (costing taxpayers and
business €2.8 billion per year).
One in six workers
out of a total workforce of 440,000 are employed in the public sector. The
government controls an empire of 63 Semi-Government Organisations (SGOs) plus
the Cyprus National Guard, an army of conscripts headed by a permanent officer
corps. Officials in charge of the SGOs are appointed by party affiliation. SGOs
are monopolies and can set their own tariffs.
State teachers
have become the highest paid in Europe, with top teachers earning almost three
times (282%) the salaries of their counterparts across Europe. In January 2013,
state teachers went on strike because they were required to work one extra
lesson per week, 40 minutes. Electricity prices skyrocketed to the second
highest in Europe, to fund the pensions of the broader state sector. Between
2009 and 2011, the price of domestic electricity doubled. A clerk in government
with a High School Certificate could earn the same salary as a Professor in a
private university.
In December 2012,
the pension funds of the Telecommunications, Electricity and Ports Authorities
were raided to pay State workers their 13th cheques. In May 2013, the workers
of the Ports Authority downed tools because their 14th cheque was reduced by
half.
All political
parties have been complicit in the transfer of wealth from the private sector
to the public sector. In 2009, 98 shipping containers of Iranian armaments on
their way to Syria, were intercepted by the US Navy. On 11 July, 2011, they
exploded while being stored at the Cyprus naval base. The island’s main power
station was destroyed and 13 lives were lost. Insurance companies paid out the
first claims within weeks. The Cypriot Parliament charged the taxpayers €99
million to cover claims for “Public Liability”. The item was slipped in as the
last entry of the 2013 State Budget.
The DIKO Party is
the government’s coalition partner (and coalition partner of most of the
previous governments). While in power from 2003 to 2008, is alleged to have
amassed €18 million of Party funds by endorsing a contract to buy two
additional Airbus planes for the loss-making Cyprus Airways.
In 2007, the DIKO
government asked parliament to approve the construction of a multi-billion Euro
offshore floating Liquefied Natural Gas (LNG) terminal. The gas was meant to be
used to power the Vassilikos Power station (destroyed in July 2011, as
mentioned above). Parliament questioned why such a massive construction was
needed when a few storage tanks would suffice. The government failed to tell
the nation that trillions of cubic feet of gas had been discovered offshore.
Politicians had set up a front company to take a cut of the billions of Euros
taxpayers would contribute to build the plant and to ensure they received an
annual dividend from the profits of selling millions of cubic feet of LNG to
Europe.
Government debt
has been compounded because Cypriots generally avoid paying taxes. Indeed,
there are only 52 tax inspectors in the whole country. In her report to
Parliament in April 2013, the Auditor-General noted that Cypriots owed their
government €1.6 billion in back-taxes and fines, enough to pay off all Eurobond
debt due in 2013. She pointed out that failure to collect taxes meant that €300
million of State revenue had been irretrievably lost.
At the end of
December 2012, ex-President Christofias vacated the rotating Presidency of the
European Council. For 6 months work, he would receive an EU pension estimated
at €10,000 per month, courtesy of European taxpayers. For his 17 years as an MP
and 5 years as President of the Republic of Cyprus, he would receive a State
pension of €22,000 per month, a brand new BMW limousine costing €43,000, a
driver, a secretary and 15 body-guards, courtesy of Cypriot taxpayers.
Just one month
before Cypriot Presidential elections of February 2013, the Trade Union-backed
Communist regime of ex-President Christofias was assiduously appointing party
apparatchiks to all key State posts, such as to the Central Bank of Cyprus and
the newly-formed State Hydrocarbons Company (theoretically a private company).
This guaranteed that the looting and pillage of the Cyprus economy could
continue, long after President Christofias had left power.
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