From the - populations ripped off by the bankster cartel for natural resources dept: In Greece’s chaotic wake bobs the listing Republic of Cyprus, (that once stood as a beacon and tiger economy with a super stable currency of its own for a quarter of a century since independence from its former colonial overlords the British, but now since joining the EURO...) soon to be the fifth Eurozone country, out of seventeen, to get a bailout (massive gas reserves found). By June 30. And on July 1, in the ironic European manner, the tiny country on a Mediterranean island that is geographically closer to Turkey, Syria, and Israel than any European country, will automatically rotate into the Presidency of the Council of the European Union for a six-month term—mechanized democracy at the EU level.
Only last year’s €2.5 billion loan from Russia has kept it afloat.
Its economy is shrinking, unemployment is at a record, and real estate
is collapsing after a phenomenal bubble and after an even more
phenomenal nationwide title-deed scandal that banks, lawyers, and
developers were colluding in to their immense benefit. And it has taken
down the banks. [For more on that fiasco, read my post from last
October.... Another Eurozone Country Bites the Dust].
So the banks need to be “recapitalized.” As is the case in Eurozone
bailouts, the losses will be socialized to taxpayers in distant
countries. €1.8 billion, or 10% of GDP, is needed just to recapitalize
its second-largest bank, Cyprus Popular Bank. Many more
billions will be needed for the other banks. And as the first bailout is
never enough, more money will be needed for the second wave. The
government itself needs to be bailed out. It has been cut off from the
markets and can’t get its deficits under control—amazing how a country
with 803,000 people can concoct problems of such magnitude
(poor souls have the worst neighbors and are stuck between the superpowers and a ponzi scheme).
(poor souls have the worst neighbors and are stuck between the superpowers and a ponzi scheme).
“The issue is urgent,” said
Finance Minister Vassos Shiarly on Monday because “recapitalization of
the banks must be completed by June 30.” And on Tuesday, a government
spokesman confirmed
that a bailout would be “one of the options.” It would be large—”a
comprehensive request covering not only present circumstances and the
recapitalization of the banks but also future needs,” Shiarly said. But
there is one thing Cyprus has that the other four bailed-out debt
sinners don’t have. And it changes everything.
Vast deposits of natural gas. Noble drilling announced
the discovery last December. Based on its Cyprus A-1 well, it estimated
that the field off the southern coast held up to 8 trillion cubic feet
of gas. There is a good probability of other gas fields around Cyprus.
And a mad scramble has ensued.
15 major oil and gas companies and consortiums, among them Russia’s
Novatec, Italy’s ENI, France’s Total, and Malaysia’s Petronas, are bidding
to start exploratory drilling activities. Novatek may also invest in
transport, processing, and liquefaction facilities (to produce LNG for
export). Chinese firms have submitted proposals. Israel is working
with Cyprus on a “unitization agreement” for reserves that overlap the
border between their “exclusive economic zones.” And they’re bent over
plans for a pipeline between their gas fields.
Alas, Cyprus has been a divided island since 1974: in the south,
Greek-speaking Cypriots; in the north, Turkish-speaking Cypriots—who
proclaimed the Turkish Republic of Northern Cyprus, recognized only by
Turkey. So the gas find is a bit delicate ... to the point where NATO
member Turkey sent warships to the area to pressure Cyprus to halt
exploration until their dispute is resolved. To defuse the situation,
Commerce Minister Praxoula Antoniadou claimed
that the project would take years of planning, exploration, and
construction. By the time revenue starts flowing, Cyprus would be
reunified, and all Cypriots would benefit from the manna.
The gas could be exported to continental Europe which currently
relies on expensive Russian gas. But a pipeline would have to cross
Turkey, and current tensions make that a non-option. Hence the necessity
for a liquefaction facility, from which the gas could be exported as
LNG by tanker to anywhere in the world. It would cost perhaps €7 billion, more than a third of the country’s GDP. Yet companies are eager to build and fund it.
The promise of money! Despite its fiscal nightmare, corruption,
teetering economy, and ruined banking sector, Cyprus won’t have a
problem attracting a bailout, either from the Troika, or if they bandy
about the noxious terms of structural reforms and austerity, from
Russia, China, or some other side. For them it would mean an investment
in a scarce resource, a bridgehead to the EU, and possibly a controlling
stake in the country.
On June 17, when Greeks try again to choose a government, they’ll
decide their country’s fate—or not. One thing is for sure: whoever wins
will push for more bailout billions, but forget the conditions, the
structural reforms, and austerity. Just the money. They’d watched the
Spanish Prime Minister proclaim victory. Read.... Greece’s Scams, Extortion, and “Suicidal” Possibility.
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