All that is wrong in the Cyprus crisis

Pavlos Agios at In Defense of Marxism, explains from a socialist perspective the Cypriot financial crisis. Some most interesting excerpts:

On the partial defeat of Communist AKEL in the elections:

It was impossible for AKEL to enthuse voters with a programme that keeps Cyprus within the straight-jacket of capitalism, and particularly casino capitalism!

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With the announcement of austerity measures as part of a package to re-negotiate the loan with Russia, many just lost faith in the ruling Communist Party. But it is also true that less than 25% of the voters that had supported AKEL in 2008 abandoned it. Many stayed at home not willing to vote for the “solutions” of the Cypriot right wing and not happy with the chauvinist position of the nationalist party (DIKO). 

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The result in the second round of voting gave the right-wing DISY, led by Nicos Anastasiades, 57.48% of the vote. The level of abstention (18.42%) was the highest in the history of presidential elections in Cyprus. AKEL's candidate, Stavros Malas, got 42.67%.

On the banking crisis:

Over a year ago the government had to bail out the Laiki Bank (Popular Bank) with over €1.8bn due to the Bank’s greedy policy of buying Greek bonds cheaply that after a few months, and due to the Greek crisis, were worth nothing. The Government should have nationalised the bank paying no compensation and tackling the problem there and then. Accepting the rules of capitalism meant that they had to accept its dynamics and after that, cuts had to be made. So the government started to cut.

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Under this – capitalist – system there is no other option. Many will now raise the issue of leaving the euro (and the Eurozone) as a solution but this policy, without the nationalisation of the banking and insurance system, is just calling for a huge reduction in wages, even bigger than that proposed by the Troika.

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It seems, however, that none of these lessons have been learnt by the AKEL leadership. Although they correctly voted against the deal, they then advocated a referendum on the country’s euro membership. The solution is not a referendum! They should issue a call to take over the banks under workers’ control!

... full article at IDOM.