Meeting informally in Dublin, the Eurozone finance ministers gave their approval to the rape of Cyprus. While their official written statement gave voice to its approval for a so-called "bailout," in reality it means nothing, since the agreement now has to go before the various parliaments and no funds will be released until mid-May, if ever.
Earlier in the day, the Cyprus government spokesman confirmed everything that was reported yesterday about the bailout increasing to EU23 billion and the possible sale of gold. He blamed the situation on the fact that for the last months, there have been constant withdrawals of deposits from the banks. The selling of gold is yet another way of making it impossible for Cyprus to leave the euro.
Daily Telegraph columnist Ambrose Evans-Pritchard, commenting April 11th on the Cyprus gold grab writes, that the Troika will take everything to save the euro. He also acknowledges that grabbing Cyprus's gold reserves will make it harder for it to leave the Eurozone. The same demand will be made against Portugal, which has 382 tons, one of largest stocks in the world, he points out. And as with Cyprus, this would deny Portugal the ability to use gold as a reserve to form its own currency. He cites Meghan Greene of Maverick Intelligence calling on Cyprus, Portugal, Ireland, Spain, Italy, and "above all" Germany to "seek an amicable divorce" from the Eurozone.
By the end of the day, none other than European Central Bank President Mario Draghi made a statement saying that he is ready to grab the gold to save the "system." Speaking from the informal Eurogroup meeting of euro area finance ministers in Dublin, he declared that any gold sales by the Cypriot central bank must be used to cover losses it may sustain from emergency loans to Cypriot commercial banks.
Draghi went further and said, "The decision is going to be taken by the central bank" of Cyprus. "What's important, however, is that what is being transferred to the government budget out of the profits made out of the sales of gold should cover first and foremost any potential loss that the central bank might have" from its Emergency Liquidity Assistance (ELA) disbursed by the ECB. This is to prevent the ECB from going bankrupt.
Asked about a letter he had written to Cypriot President Nicos Anastasiades, Draghi said the letter is "very, very clear."
So, now it is clear that under the euro, national governments no longer control their own gold reserves, but the central banks do. "The independence of central banks in the euro area is enshrined in the treaty," Draghi said. "The ECB will look at developments in Cyprus from this angle."
This latest turn has enraged even the neo-liberal Cyprus Mail, which charged that, "It is probably too much to ask that the 'government of change' come clean and tell the people who have been robbed of their money, jobs, and standard of living what is really going on, how much money is really needed, and how this will affect their lives." The newspaper charged that President Anastasiades had been "delusional, lying through his teeth," and said, "People want to hear the truth about what is happening to their country now, so they can make up their own minds and take decisions about their futures, or in this case, the lack thereof.
"It's the least people deserve before we are all called on to line up and donate a kidney to raise more cash for this bottomless pit of a bailout, because people really have nothing else left to give."
