Howard Wheeldon wrote: "…the tragedy that is Cyprus today and specifically of how joining the European Union in 2004 and the Euro currency area in 2008 has in such a short space of time brought this divided island nation to its knees.
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Joining the EU meant that not only could the import of cheap vegetables and other goods from fellow member states not be prevented neither could the Cyprus government prevent the influx of cheap labour from Eastern Europe coming in. This meant that locals were pushed out of working in hotels, bars and restaurants – a big source of employment as Cyprus has long been a big tourist destination. This gave rise to huge unemployment – something that had been unknown in Cyprus until then. Indeed, even before the current crisis began and that will probably double unemployment over the next two years I am told that in the Paphos region unemployment jumped from near zero in 2004 to 15% of the population in 2009.
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There you have it. There may have been some kind of agreement that will resolve the problems of Cyrus for the rest of the world but for the Cypriots themselves pain that began when they joined the EU is just about to get very much worse. Today Cyprus has become a virtual cash only country. I am told that use of cheques and debt cards that most people use to buy there daily requirements is very difficult because of the problems of inter-bank transfers. Clearly with unemployment probably set to double again a great many small and medium sized businesses will fail.
I will not go into the issues surrounding the two principle Cypriot owned banks – the Laiki [Popular] Bank and the Bank of Cyprus here as this has already been much discussed except to remind that before the EU came along these were very fit for purpose entities.
As to the future – there is no immediate way out for Cyprus. The problems are immense and even if this much troubled divided island nation could turn the clock back – meaning bailing out of the EU and the Eurozone – it could remove neither the damage that has already been done or the expectation of the next generation of its people." (…)
