And Now for a Break from Impeachment News...

Jeff—Saturday

For those of you wondering what’s going on in Greece these days—as if anyone in the US media seems to care about what’s happening outside Washington, DC—here’s a quick primer.

+          The Turks and Greeks are at each other’s throats, the Turks claiming rights to Greek islands and energy resources.

ATHENS – Greece’s Foreign Ministry immediately rejected claims by Turkish Foreign Minister Mevlut Cavusoglu who said there are “gray zones” in the Aegean as Turkey is moving to claim waters off Greek islands and in the Continental Shelf.

“The legal status of the Aegean and of (the Aegean) islands is clearly determined by international treaties and there is no room for dispute,” Greece’s Foreign Ministry said, adding that Turkey’s interpretation of the UN Law of the Sea is “unfounded” and “illegal.”

“Greece has chosen the path of international legality,” the ministry said, urging Turkey to do the same, although Turkey doesn’t recognize the Law of the Sea unless invoking it in its favor against Greece and Cyprus, where Turkish ships are drilling for oil and gas.

Speaking to CNN Turk, [Cavusoglu] said that, “There are islands whose sovereignty has not been established” either in the Treaty of Lausanne or in the 1947 Paris Peace Treaty. Turkish President Recep Tayyip Erdogan doesn’t recognize the Lausanne treaty that set borders between the countries and openly covets the return of some Greek islands.

—The National Herald.

+          The Turks have allied themselves with one-side in the battle for control of Libya, and the Greeks are siding with the other.

ATHENS – Greek Prime Minister Kyriakos Mitsotakis and Libyan Gen. Khalifa Hifter, who leads a rival force in his country that’s battling a United Nations-recognized government, sided with each other in a meeting where both want to thwart Turkish ambitions.

Their sit-down came just ahead of a European Union meeting in Berlin to talk about how to deal with Libya where the fighting in the oil-rich country has the international community worried it could come apart.

Mitsotakis, upset that Greece was excluded from the meeting despite Turkey and Libya signing a deal dividing the seas between them, with Turkey claiming waters off Greek islands and planning to drill for energy off Crete, said he would veto any agreement in Berlin that doesn’t reject that seas pact. 

—The National Herald.

+          Turkey, a key transit point for Russian natural gas into Europe, is being faced down by a new alliance formed by Greece, Cyprus, and Israel to conduct gas drilling in the waters off Cyprus.

Cyprus, Greece, Israel

Cyprus President Nicos Anastasiades, Greek Prime Minister Kyriakos Mitsotakis and Israeli Prime Minister Benjamin Netanyahu attended in Athens Thursday the signing ceremony for the accord to construct the Eastern Mediterranean natural gas pipeline…

The accord comes just as tensions are increasing in the region after Turkey’s contentious agreement that delineates maritime borders with Libya and affirms claims to areas of the Mediterranean the pipeline may cross. The three signatory countries all oppose the deal.

Israel’s cooperation with Cyprus & Greece “adds to security and prosperity in the region” and “we are not turning against any other country,” Netanyahu said. 

—Houston Chronicle

+          Refugees are once more streaming onto Greece’s Eastern Mediterranean islands through Turkey, and conditions in Greece’s refugee camps are going from horrible to only God knows where.

AP/Petros Giannakouris

In 2019 74,600 people arrived, 50 per cent more than last year. They are mostly families with children from Afghanistan and Syria. 59,700 arrived on the islands and 14,900 at the land border.

Conditions in the islands’ reception centres are now dangerously overcrowded with 36,400 people sharing the space and services intended for 5,400.

—Relief Web, quoting UNHCR Fact Sheet

+          Will America back Turkey or Greece? is the question on the minds of most Greeks.

ATHENS – Fear there could be conflict with Turkey over the Aegean and East Mediterranean and a rekindling of a refugee crisis is high on the minds of worried Greeks with a poll finding those issues vexing them.

Some 62 percent of those surveyed by the Pulse firm for SKAI TV said they were worried about Turkish provocations that have included violation of air space and Turkey’s drilling for oil and gas off Cyprus and planning to do the same off Crete after signing a deal with Libya dividing the seas between them…

But they didn’t like the way that Germany, the United States and the European Union are responding. The US has a military cooperation deal with Greece but President Donald Trump backs Erdogan and the EU has given Greece press statements of support only…

A surge in some 50,000 more migrants and refugees coming to Greece after New Democracy was elected, most to already overwhelmed Greek islands, found Greeks divided over how it is being handled.

The government said it would speed asylum application processing as well as deportations back to Turkey, which has allowed human traffickers to keep sending refugees and migrants to Greece after they had gone to Turkey first, fleeing war and strife in their homelands.

—The National Herald

+          Domestically, with the far left out of power, protesters are returning to in-your-face, confrontational political protest, and being met with Greece’s new center-right government’s “the rules are different now” approach.  

Reuters/Costas Baltas

ATHENS (Reuters) - Greek police fired teargas … at students protesting against the shutdown of a prominent Athens university that authorities raided at the weekend to confiscate materials they said were typically used in violent demonstrations.

It was the first time police and protesters had clashed inside university premises since the Conservative government’s abolition of academic sanctuary earlier this year…

Leftist parties say the concept of academic sanctuary, which prohibited security forces from entering universities, protected students’ freedom of expression. But the government, which came to power in July, said it had been a cover for lawlessness.

—Reuters

+          The fiscal crisis remains front and center in the minds of many Greeks.

A near decade-long economic crisis that created an exodus of some of Greece’s top and youngest talents, unable to find work or fed up with a clientelist system holding them down and rewarding political friends stripped the country of skills the New Democracy government wants back…

Under the ambitious scheme, dubbed Rebrain Greece, returning recruits will be guaranteed at least two years employment, the first of which will be financed by the state by 75%. Highly skilled professionals and scientists aged between 25-40 will be targeted first off…

About 470,000 Greeks have left the country since 2008 when hiring freezes started popping up in anticipation of economic woes that really hit hard in 2010 when the then-ruling and now-defunct PASOK Socialist government sought the first bailout of 110 billion euros ($123.33 billion.)

Signs of wariness remain, however, Greeks who’ve been burned by broken promises of volatile governments hedging their bets for now and about 40 percent who left it was goodbye for good even if there’s a recovery.

—The National Herald

+          Tourism is up once again, drawing all sorts from around the world to join in a feeding frenzy for tourist cash, especially on price-is-no-object destinations such as Mykonos and Santorini.

Passenger traffic at Greek airports reached 65.4 million in 2019, breaking all previous annual records.

According to the statistics of the Civil Aviation Authority, in the January-December period of 2019, there was an increase of 5% in the air traffic of the country, with the total number of passengers travelling in January-December 2019 reaching 65,385,004. In the same period of 2018, 62,292,191 passengers were transported, meaning the number was up by 3,092,813.

A 3.7% increase was also recorded in the total number of flights to Greek airports, reaching 538,956 (of which 213,098 domestic and 325,858 foreign), compared to the corresponding period of 2018 where 519,548 flights were operated.

 —Protothema

[Mykonos] ranks first, along with Santorini, in terms of hotel visitor satisfaction for 2019 in the so-called Mediterranean “premium” destinations with competing destinations in Sardinia, St. Tropez and Ibiza.

—Protothema

+          The Greek Parliament has elected the nation’s first female President, a largely ceremonial role, but still a first.

Greek President Katerina Sakellaropoulou

—Jeff

Jeff's 2020 Speaking Engagements and Signings (in formation):

Thursday, March 12-Sunday, March 15, 2020 

San Diego, CA

LEFT COAST CRIME—San Diego Marriott Mission Valley

Panels yet to be announced

Monday, March 16, 2020, 11AM-2PM

Saddlebrooke, Arizona 85739

FRIENDS OF SADDLEBROOKE LIBRARIES 

30th Anniversary Authors Luncheon

SaddleBrooke Clubhouse

40010 S. Ridgeview Blvd.

Author Speaking and Signing

Thursday, June 4--Sunday, June 7, 2020

BRISTOL, UK

CRIMEFEST—Mercure Bristol Grand Hotel

Panels yet to be announced 

Is Cyprus All That It Seems?

What is these days?  We’re hearing that the Western world’s financial system is about to implode because of Cyprus, that no one’s bank savings are safe because of Cyprus, that the EU will fall because of Cyprus, and that Merkel is the devil because of Cyprus. Okay, I’m exaggerating—Germany’s Prime Minister was vilified long before Cyprus.

For those of you locked in your room for the past couple of weeks playing the latest version of “Call of Duty,” let me take some time, as Fagan sang in Oliver, “reviewing the situation.”

Ron Moody as Fagan

Cyprus is an eastern Mediterranean island about one and one-half times the size of the U.S. state of Delaware, with a total population of a bit more than a million.  Since 1974 it’s been divided into a Turkish occupied north and the Greek-speaking Republic of Cyprus to the south.  It is the south that’s a member of the EU, not a NATO member, on the Euro, the subject of current financial concern, and what I’m referring to as “Cyprus” in this post.

Divided Cyprus

It was no secret that after the breakup of the Soviet Union Cyprus became the place of choice for many former Soviets looking for a safe haven in which to bank their money, and that there’s broad speculation over the sources of those depositors’ funds and the uses to which they’ve been put [think Cold War thriller scenarios]. 

But Cyprus gladly accepted its new-found windfall (its banks grew to hold eight times the nation’s gross domestic product (GDP)) and the influx of Russian millionaires—and billionaires—buying up many of the island’s most expensive residential properties.

The Cyprus economy cruised along quite nicely, doing relatively well even during the early years of the worldwide recession.  Then came the Greek bond crisis, and the bottom fell out for Cypriot banks. They were heavily—some say disproportionately or even speculatively— invested in Greek government debt.  The Cypriot government nationalized one bank to avoid its collapse and borrowed heavily to support its system, including loans from Russia, some at less than prevailing interest rates but with maturity dates just a few years away.

None of that, though, was enough, and in order to save its banking system Cyprus needed an infusion of 16 billion euros, roughly equivalent to its GDP.  Enter the Troika (IMF, European Central Bank and EU) offering to loan 10 billion euros if the Cypriot government came up with an additional 5.8 billion euros and agreed to other terms intended to stabilize its banking system and (hopefully) hasten its return to fiscal health. 

What sent prophets of doom to the ramparts was the proposal put forth by the newly elected Cypriot President (in consultation with the Troika) for raising that additional 5.8 billion: Impose a one time “tax” on depositors’ accounts—9.9% on bank accounts above 100,000 euros and 6.75% on the smaller ones. 

All hell broke loose, with screaming demonstrations, runs on ATM machines (the banks were and remain closed), and the Cypriot Parliament ultimately and unanimously voting down the proposal.

The question is, “Now what?” Either Cyprus doesn’t get the money it needs or it does.  If it doesn’t, the country’s banks fail, with inevitable widespread pain to many.  Just how far and deep that pain will spread is a matter of economists’ speculation—a notoriously inaccurate conjurers’ device.

 

All I can say is we shall see, but it seems hard to imagine that in light of the many unique factors surrounding the Cyprus crisis that the world will plunge into a “Great Depression” or the European Union will fall.  And that’s not just because of the relatively small size of the Cyprus economy.  In fact, some wags say that if Cyprus refuses to accept the Troika’s terms, its small size makes it a “manageable” example to other struggling EU nations of what will happen to your country if you refuse to be “realistic.”

Frankly, it appears that many of those “unique factors” are what led to the incendiary bank account “tax” proposal in the first place.  For example: Many of the largest account holders are foreigners, mainly Russian, so the “tax” was seen as a way of bringing substantial funds into the Cypriot economy from foreigners, rather than taking it all from Cypriots though such means such as reducing pensions; foreign investors, mainly Russians, have long known of the precarious situation facing Cyprus’ banks yet chose to keep their money there; and Cyprus bank accounts paid 5% interest (three to four times what U.S. banks paid) and in post-Madoff times anyone expecting that sort of out of whack interest return had to realize there was a gamble involved, and losing less than 10% was not that bad a haircut under the circumstances.

The big miscalculation was “taxing” the small account holders (rather than taking a bit more from the larger accounts to come up with the 5.8 billion) who believed the government had promised to protect accounts of up to 100,000 euros.  It was a PR disaster, even though at the time it certainly must have seemed a brilliant solution to some Cypriot politicians.  After all, during the last parliamentary election in neighboring Greece one party leader advocated imposing such a “tax” on every bank account in excess of 20,000 euros as a means for getting Greece out of its mess, and his party garnered the second most votes. 

Bottom line: It wasn’t a smart move.  BUT at least one behind the scene’s player has carefully positioned itself to take advantage of the unfolding situation.

For Russia it looks to be a win-win situation.  If the Troika gives Cyrus the money on terms acceptable to the Cypriot people, other EU countries in need (Greece, Spain, Portugal, Italy, Ireland, and to be continued) will likely stiffen resistance to the popularly unpopular conditions of their Troika loans…drawing out the “euro crisis.”

If the Troika doesn’t deliver and Cyprus crashes, it gives credence to Russia’s message for the former Soviet Satellites now part of the EU or wishing to be (something Putin has never forgiven the West for encouraging) that they cannot trust the West to be there when they need them most.

But no matter what the Troika does, Russia now has a far better shot at getting a piece of something it really wants: Cyprus’ recently discovered, vast offshore natural gas deposits.  That discovery put Cyprus in conflict with Turkey, into an alliance with Israel, and in future competition with Europe’s primary supplier of natural gas, Russia’s Gazprom.  A financially strapped Cyprus, owing billions to Russia, and needing billions more to develop its gas reserves, this week sent its Finance and Energy ministers to Moscow—and the Church of Cyprus announced its willingness to post its wealth as collateral. 

What sort of bargain do you think the Russians will drive?  To some extent it depends on whether the Troika or Cyprus blinks first.  And, of course, how belligerent Turkey is prepared to become.  But either way the Russians undoubtedly see themselves as winners.  After all, let’s not forget that much of what happened to Cyprus in the past was the result of Cold War concerns by the West over the island’s potential alliance with the Soviets.  Now it’s only the Russians.  And they are coming.

[Update:  As of late Friday Cyprus still had no fixed plan, but looks to be making deal with the Troika that puts no tax on small accounts but a whooping 22-25% hit on accounts above 100,000 Euros.  Russia’s position: Sorry, no help now, let’s first see what kind of deal you can make with the Troika, then we’ll talk. The dance continues.]

 

If that sort of modern day Russian intrigue seems fitting for a novel, you’ll find more on September 3rd when MYKONOS AFTER MIDNIGHT is released by Poisoned Pen Press.

Jeff—Saturday