Those who doubt that geopolitics have been at the centre of the Greek debt saga since Day One should read the piece below carefully. The demands being made on Cyprus by Berlin are a thinly veiled attempt to challenge the Greek EZ – and by the IMF, to enhance the American-backed energy/exploitation triad in the region. The Slog outlines the real reasons why Germany and the IMF are at odds.
There can be no doubt that the Cypriot debt (and the dubious nature of the island’s financial dealings) leave much room for justifiable doubt among EU officials. By mid-2012, larger banks like Bank of Cyprus or Cyprus Popular Bank were each reporting loans to Greek borrowers that exceeded the entire gdp of the island. Cyprus is in turn infamous for being a haven in the Turkish half for Islamist refugees – and overall for money laundering, reckless government spending, a disturbingly close relationship with Moscow, and levels of tax evasion that make Greece look like Holland by comparison.
But as I’ve written before on several occasions, Cyprus is the Mediterranean’s Cuba: at the geopolitical level, it is vital for the EU to keep a stranglehold on it….and equally vital for the Americans to be able to use it. Further, the Russians have many business and property interests on the island, and Recep Erdogan over in Turkey would dearly love to grab it for himself, should the region ever be distracted by bigger crises.
The European nation most committed to grabbing the plum prizes down in South Eastern Europe is Germany. Hence the suspicion among Greeks and Cypriots when, DEH (Greek Electricity) having signed a deal last month with Quantum to export cheap electricity via Israel and Cyprus to the rest of Europe, German Chancellor Angela Merkel yesterday conveniently insisted that EAC (Electricity Cyprus, a hot property and central to the DEH deal) must be sold off to pay Cypriot debts. No prizes for guessing who she’ll want to buy it perhaps – but removing a key income stream from Greece and Cyprus also keeps them dependent on Big Mother.
Meanwhile, specialist in surreal mathematics and closet American Cristine Lagarde now says that, as the head of the IMF, she won’t participate in the Cypriot bailout because she doesn’t think the debt repayments would be sustainable. This would be a credible position were it not for the IMF’s involvement in previous Greek bailouts where the repayment terms were equally idiotic.
What’s changed since then is that American foreign policy has gone considerably more hardball in its approach. Since February last year, Washington has been keen at one time or another to decouple Greece from EU influence. Given events in the Middle East, that desire has grown stronger – albeit strictly offstage. So it is that Lagarde insists the ESM must bail out the Cypriot Banks directly. The Francoyank is insisting on this because she knows Berlin will never agree to it. As Spiegel Online reported yesterday, ‘German Finance Minister Wolfgang Schäuble says that a direct bank recapitalization by the ESM would only be possible from March 2014 at the earliest, once a European banking regulatory agency has been established’. That must be why the ECB is currently using a ponzi scheme to directly refill banks all over Spain and Greece, then.
This is all posturing to justify a much larger agenda. The reality is that we have here a continuing tug-of-war over hegemony in the Eastern Mediterranean, where the Cyprus-Greece-Israel axis is known to be rich in energy and rare earths…..and moving ahead swiftly to exploit them in this ‘economic zone’ – or EZ. Indeed, the maintenance of a specifically sovereign-owned Greek EZ is now one of the hottest debates in Athens. Greece has been in talks with the European Commission since last summer to establish several such economic zones offering tax breaks to attract investors and help reinvigorate its economy. But although Greek leader Antonis Samaras emphasised to French and Greek leaders last August that Athens needs a formal EZ, he has since admitted to colleagues in private that Berlin in particular is less than keen on the idea. I can’t imagine why.
Syriza leader Alexis Tsipras at least grasps the importance of American help in getting free from Brussels servitude: he has been moving quietly closer to the US in recent months. This in turn explains why Berlin-am-Brussels would rather eat glass than see a political situation in which Tsipras became Prime Minister of Greece. In the last hour, a Washington source had this to say:
“You can rest assured that State [the State Department] will be pissed about the German move, and that Berlin will be equally pissed that Lagarde is still our gal. It is the easily discernible foreign policy of the United States to create a powerful base plus access to energy and so forth around the Cyprus-Greece-Israel zone, and anyone who believes otherwise is simply asleep.”
Just as Syria is a pawn in the game of controlling Iran and oil access, so too an independent Greek, Greek Cypriot and Israel are vital castles in the chess game of Afro-Mediterranean geopolitics. But this is a chess game being played for inordinately high stakes: Russia will not relish having its nose pushed out of joint, but if the Americans succeed in this regard Putin will have to accept defeat. This will increase his desire for a rapprochement with Germany; and if Merkel starts to see the EU as little more than a money-pit in which access to ClubMed energy has been cut off, she in turn will warm to Russian approaches – and the ready supply of oil and gas from that quarter.
We should never lose sight of the fact that Geli was a keen Youth leader in the DDR who speaks fluent Russian, while Vlad was an agent in that same country who speaks German without any trace of an accent. As with everything in the twilight of fossil-fuel economics, behind every gesture is another move to ensure energy continuity.