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Schäuble: Cypriot anger at Germany will pass

Published: 28 Mar 2013 14:01 GMT+01:00

When times are very tough "then you look for someone to project your anger onto," he told local radio broadcaster SWR2, when asked about public ire in Cyprus against Germany, the European Union and the International Monetary Fund.

"That will pass. It is of course completely unfounded," he added.

He described as fair the terms of the rescue, which will see depositors with more than €100,000 ($128,000) in the island's top two banks face losing a large chunk of their money.

He also came to the defence of the head of eurozone finance ministers, Jeroen Dijsselbloem, for his handling of the Cyprus bailout and his suggestion it might serve as a model for other stricken states.

"Cyprus was a special case, everybody knew that," Schäuble stressed.

"I think Dijsselbloem was misunderstood," he said, adding that the Dutchman had only repeated a mantra intoned since the start of the financial crisis in 2008.

"If you have a debtor who at the end of the day can't pay and you have outstanding claims then you can also lose money."

Dijsselbloem had suggested that the Cyprus approach, with its provision for major depositors to take losses, could be used again to avoid having taxpayers carry the burden, as they have done up to now in the crisis.

Rising anger against Germany as the paymaster for eurozone bailout packages and its most influential member state has rattled officials in Berlin.

Demonstrators on the streets of Nicosia brandishing posters depicting Chancellor Angela Merkel as an Adolf Hitler figure bent on European domination have received wide media coverage.

German Justice Minister Sabine Leutheusser-Schnarrenberger was quoted Wednesday as saying that European Commission chief Jose Manuel Barroso and EU President Herman Van Rompuy ought to help rein in anti-German sentiment.

"Germany is showing solidarity so that in the end the crisis countries have a future," she told Munich's daily Merkur.

"So I would indeed ask that the people at the top – the Commission president and the Council president – demonstrate solidarity with us and defend the Germans against unjustified accusations," she concluded.

AFP/mb

The Local (news@thelocal.de)

Your comments about this article

16:22 March 28, 2013 by Andreas77
I am LAUGHING at Frankfurter Allgemeine said. ¦quot;Because Germany¦#39;s economy is so strong and because the distance between it and its partners is growing, so is the jealousy.¦quot;LOL - I am Greek Cypriot and I have lived both in germany and the US of A. Cypriots are usually NOT jealous of other countries but IF there is ONE country they area bit jealous of, that is America! Beautiful country, well organized, nice people, diverse, and cool. Not too many sketchy issues and past like the germans. I can assure you that NO ONE is jealous of Germany. I mean, why would anyone like the gray streets of berlin, looking at scary faces like Schäuble (who, you have to admit, looks schockingly identical to Gollum from the Lord of the Rings) and eating sausages at 7pm? Yiaiiks! If we could pick a country to mess us up, we would IN A HEART BEAT prefer to have Obama do it in a suave way or a tall, blond sun-burned cowboy take our gas reserves. Not Gollum! Wouldn't you? Jealous of Germany... LOL.

(P.S. I hope my comment does not get moderated because I am Cypriot bashing Germany. By publishing my comment The Local will show that it allows balanced opinions to the comments bashing the Greek lazies etc. BTW, it is a bit sad that no one recognizes that Cyprus has managed to survive so many years of oppression, wars etc given its size and the non-existent industry. Really, people, we are VERY small with NO political influence. And Cypriots are really very different from the Greeks in Greece. But you wouldn't care. So I stop here.).
18:11 March 28, 2013 by chris berlin
haha, your comment makes me laugh, is it serious or do you really intend to be funny? I also do not believe that Cyprus is jealous about Germany but Germany is not in charge of the problems in Cyprus and also not alone in charge for the "bail out". Germany is just the scapegoat. Dutsch and Finsih officials say really tough things about cyprus but Germany is blamed... And what would have been the alternative to the "bail out" of Cyprus? All the banks would have crashed and no one in Cyprus would have any Cent left anymore...

btw: in my view berlin is a wild, colorful, multi-cultural party city with a high and fast growing share of southern europeans - and people eat rather döner, pizza or sushi than sausages ;)

happy easter!
19:15 March 28, 2013 by sonriete
They have the best diner in Berlin
21:55 March 28, 2013 by Andreas77
Chris Berlin, I know you don't believe that Cyprus is jealous. I dont think the people of germany believe this either. But it is just not cool to hear this from one of the country's high level reps. It's like when the french MOF said that Cyprus is a "casino economy". Ouch. It just relegates all the efforts ordinary people made to rebuild their livelyhoods after the war in 1974, which they did successfully with more than 30 years of consecutive economic growth. Small, medium-sized businesses that flourished and brought earnings to those who lived through rough times so that their kids can have access to good education and other advanced citizenship benefits their parents lacked. Yes, there were bad decisions made that "gambled" the banks away - e.g. when Cyprus purchased massive amounts of greek bonds after trouble to help them (because this is what we thought was the right thing to do for our "brothers" - oh how wrong we were) and with the 50% haircut, our Banks collapsed. And dont think that Cypriot citizens like Rrrrrrusians too much either - culturally and morally, Russians go against everything we ever stood for. But to call an entire economy a "casino economy" is not professional for someone like the french mof. It is more appealing to the german taxpayer but it is not true. :(

You are absolutely right: unfortunately, no alternative to the bail-out and I can see the german, dutch, finnish fatigue in bailing out countries. But in CY's case, the bail-out was very unfair. Cyprus was basically forced to change its entire economic model overnight! Yes, reforms are needed but done step by step. We had already started austerity to cut spending. But to make an entire country, switch from one day to another, it is simply not sustainable. With Cyprus' finance sector completely torn apart what is there left to do? We dont have any raw materials, we cannot build / export Audis or submarines or warfare. Tourism is just 30%. Agriculture? No. The land is too small with serious water deficiency. So you wake up with almost nothing. In other words imagine a Cypriot family - the two parents with a decent job, a nice house, a car enjoying a middle class lifestyle. Imagine them waking up to a reality where one parent (if not both) is fired, their savings cut by 40% and they are not able to pay for the education of their 2 kids (one studying engineering in UK and one nuclear physics in US) . Overnight. These are actually real people, my neighbors.

At least Cyprus has good institutional frameworks (put in place by the Brits) and also a strong social and family infrastructure. So we will not let anyone starve. I have been to East Berlin before the fall of the wall, and although very young, I remember the people in the streets starving. Not nice

Hopefully, our gas will allow us to build an economy around it but that is in 5-10 years. btw, read this, interesting analysis. http://blog.stockwatch.com.cy/?p=1670

Our easter is on May 5.
01:43 March 29, 2013 by Reyter
Germany is largely to blame for the problems of southern Europe. These until now never had and shouldn't have a currency worth the same as Germany. They don't and never had large export industries. As they now Germany can export far more to these countries than it could otherwise. This is the only thing that accounts for the far stronger and getting still further ahead German economy.

Schäuble denounced his one time fascist "kameraden" in Japan because they expressed their willingness to get in on the money printing game. The Japanese shot back pretty much what I outlined above and our favorite little ticking fascist abruptly shut his mouth!

I can only presume the reason southern Europe is still in the Euro is because the #%$!.# at the top are getting paid off and they don't want to be anywhere near the social and economic disaster pulling out of the Euro will mean in the short-term before the long-term recovery can begin.

When (not "if") if does happen, Germany will have made a lot of money but it will also have the hatred of a large number of neighbors who may and could simply decide to place an embargo on Germany exports. If they did, what could Germany do? J. V. Stalin may be long gone but the knowledge of what happened remains among the masses even if Schäuble tries to pretend it never happened.
09:34 March 29, 2013 by ChrisRea
There is no doubt Germany is to blame - it was the Bundestag that decided to make Cyprus a tax heaven, wasn't it? The poor Cypriot banks bought Greek bonds only because the German tax payer forced them to. It has nothing to do with greed. And it was definitely the German political parties that prevented Cyprus to become self-sufficient, for example by building a solid IT sector. The Cypriots fought with all their powers to keep Russians away, but it was Merkel that forced them to take their deposits.

"As they now Germany can export far more to these countries than it could otherwise. This is the only thing that accounts for the far stronger and getting still further ahead German economy. " - of course, all German exports to these countries are almost 5% of the total German exports. Exports to France, USA, China, UK - they are just peanuts for Germany.

And yes, it is pretty tough for Cypriots to have savings of only tens of thousands of Euro after the haircut of the bank deposits (like in the example from #4). It is much better to be the average German with little to none savings.
12:16 March 29, 2013 by Englishted
Schäuble : the pontification of arrogance.
14:13 March 29, 2013 by antistar
I feel terribly for the Cypriots who have lost out because of this financial disaster, but stop looking outside for someone to blame. Cyprus is a democracy - the government is voted for and takes actions for its people. Nobody forced the government or these banks to make the decisions they did. Blame them.

The idea that Europe has been unfair to Cyprus is a joke. They could have just let the banks fail and all the depositors would have lost all their money. Nobody came to bail out German depositors in the 30s when their lives were destroyed by economic catastrophe, yet Germans are expected to pay up to save everyone else. And when they do they get blamed for it and moaned at for not paying enough!
16:48 March 29, 2013 by Reyter
@ChrisRea

Why shouldn't Cypriots accept Russian money? Putin and his capitalists are the ones who shouldn't allow it. A lot of people are also saying the theft of the funds in Cypriot banks was also meant as a signal that Germans want that money in German banks. It's probably at least to some degree true.

Of course those southern European countries also work to keep the value of the Euro down so that Germany can export still more. Germany gains an even larger % of GDP from exports than China. Without the Euro which benefits Germany to the detriment of southern Europe. German fascists may be pretty smug now but it's only because that are like fascists generally, very stupid.

Probably sooner rather than later those countries will reject the Euro and restrict German exports over and above market restrictions due to currency movements. Germany will then basically not have an economy at all and thank to J. V. Stalin you and I will long be turned to dust before Germany tries to impose it's will militarily on anyone in Europe and that will only give them a few fish in Baltic to fight with......
17:45 March 29, 2013 by Englishted
@antistar

The E.U. is a "democracy" but did you vote on expansion, the Euro, the new treaties?
18:55 March 29, 2013 by antistar
Britain is a democracy but did you vote on the poll tax, student loans, decimalization, etc? No, because democracy isn't run by the people through endless referendums - you vote in a party and they run the country according to their mandate. It might not be the perfect system, but that's democracy.
21:53 March 29, 2013 by ChrisRea
@ Reyter

I'm glad you also realised how ridiculous was Andreas77's statement about Cypriots disliking Russians. That was actually the point. Of course they were free to accept Russians' money. Instead of letting depositors lose all their money, EU (including Germany) stepped in with bailout funds. Probably it would have been better not to bail them out and make an example out of Cyprus. Your conspiracy-loving friends talking about theft would have found that a better way to convince people to choose German banks over Cypriot ones.

Your joke that countries like Cyprus keep the Euro down for the benefit of Germany is a good one. Indeed, why would Germany keep their own DM that they can devaluate whenever they want instead of adopting a common currency which is not controlled by the German central bank?
22:32 March 29, 2013 by tsagaris
Now Cyprus is the most secure destination for your euros. They have been already hair cut and it's only once.Your euros are in danger.So we are waiting your euros in sunny Cyprus.
01:04 March 30, 2013 by Reyter
@Andreas77

"culturally and morally, Russians go against everything we ever stood for."

You mean Russian capitalists? If so, why stop at them? If not, what do you mean?

@ChrisRea

I didn't tell any joke. It's a fact they keep the value of the Euro down further benefiting Germany. Why not keep the DM and devalue it? You mean by printing money? Hmmmmm perhaps if you go back and look at Germany to just before the Nazis took power you will have your answer.
02:19 March 30, 2013 by liondens
Perhaps, germany can dispatch another football coach to cyprus and problems solved. Who fkg cares!
02:25 March 30, 2013 by antistar
You don't have to print money to devalue your currency, you can just do as China does and sell it below it's real value. There'll be plenty of buyers.
07:32 March 30, 2013 by ChrisRea
@ Reyter

antistar gave you a correct option. Besides China, India does it as well. And I am curious to find out why do you think Euro is undervalued. In the last 3-4 years, the exchange rate against USD and JPY was pretty stable, moving cyclically between 1.2-1.5 USD and 95-137 JPY.
08:27 March 30, 2013 by Reyter
@ChrisRea

China has a currency pegged to a basket of currencies. It doesn't print money. China is a developing country. If Germany were to do that Japan would also, USA would also and all it would lead to is a currency war like what existed in the late 1930s.
15:02 March 30, 2013 by Englishted
@antistar

Fair enough ,but which parties stated that they were for ,expansion ,and the Euro? when countries are given a say on a issue that will effect their country for the future they have rejected the measures the E.U. has come up with only to have their voice ignored and their democratic feelings crushed under the gravy train that is the E.U..

Which party is now advocating allowing Turkey to join? and which is not? any information would be most gratefully received.
17:57 March 30, 2013 by ChrisRea
@ Reyter

It might be that I did not express myself clear enough. When I said "India does it as well", I did not mean printing money, but what antistar pointed out that China does: sell its own currency below its value. And with the world's second largest economy, I would not call China a developing country.
18:17 March 30, 2013 by raandy
Any out right anger may pass but long time distrust does not.
12:44 March 31, 2013 by Reyter
@ChrisRea

You may not call it a developing country but that is precisely what it is nonetheless.
17:13 April 6, 2013 by KarOTTO
How unfair is that: Greeks are the laziest and messiest people in Europe yet they have the reputation of being the ones who gave birth to the western civilisation. On the other hand, we work hard, we are ethical, we help everyoneand everyone accuses us for having tried to destroy the western civilisation twice
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