The Cyprus government has extended the bank closure until next Tuesday, suggesting that the bailout plan proposed by the president is running into really heavy weather. The European Central Bank has apparently given the government a deadline until Monday to accept the deal or go bankrupt, so you can expect the Cypriot parliament to come under great pressure during the next few days.
Since people need money for everyday life, ATM machines are apparently being replenished. I am not sure how the broader electronic banking sector is operating. For example, I hardly ever use cash anymore and so rarely withdraw money. My salary goes directly to my bank account, I pay for almost everything with a credit card, and then pay the card bill by electronically transferring money from my bank account to the credit card company. I am not sure if such electronic transfers are still possible when the banks are closed because that would mean that better off people who can do such things will be hardly affected by the closure while those who primarily work in the cash economy will be harder hit. For example, we have the bizarre spectacle of the UK government sending a military planeload of cash ($1.3 million) to its troops in that country.
There was some strong disagreement with my earlier posts on this topic (see here and here) that had condemned the proposal by the Cypriot president to garnish some of the savings of ordinary Cypriots as part of a deal to get bailout funds from the European Central Bank in order to repay the large hedge funds in full, saying that it was unfair for Dutch and German taxpayers to foot the bill for the profligate ways of the Cypriots.
These comments show precisely how the global financial oligarchy works. Ordinary Cypriots, like ordinary citizens in the Netherlands and Germany and anywhere else, had little or no say in how their governments and banks operate. They just go about their lives, working and putting some money away in savings. But governments and big banks set policies that favor the global financial oligarchy and enable them to send vast amounts of money rapidly around the globe in order to get high returns, by lending to governments through the banks.
But when things go sour and governments cannot repay, what they do is pit ordinary people of the donor countries against the ordinary people of the recipient countries in their efforts to make sure that the oligarchy in untouched. By causing people to think that ‘hardworking’ Dutch and Germans are subsidizing ‘lazy’ Greeks and Spaniards and Cypriots, and throwing in ‘greedy’ Russians into the mix, they manage to obscure the fact that they are all getting exploited because the allegiance of all their governments is to the big banks, and that the global oligarchy is really calling the shots through its puppets in the IMF and the ECB.
Once sees this over and over again in other contexts. In the US we see how the oligarchy pits Chinese or Mexican workers against American workers, making them see each other as the enemy and fight with each other, when the real winners, all the time, are the global oligarchy, while the real losers, all the time, are the workers in each country.
If we cannot see through that charade and unite against it, we will continue to be the losers.