Wednesday, 27 March 2013

Greece's crisis- An update on its long road to recovery

All eyes are on Cyprus. The economic storms battering the Mediterranean island are foreboding for many reasons. But as some of those pronouncing on Cyprus' future point out, it's situation is a unique one. Once again the Germans may be maligned by some Cypriot politicians but it's only because they seem to be the only ones brave enough to face the situation for what it is. 'Why should the German taxpayer?', point out many who aren't even German taxpayers, 'have to bail out Russian oligarchs?'

Good point. Cyprus' grotesquely bloated banking sector is stuffed with the money of Russian businesses, oligarchs and banks, much of it with fly-by-night companies set up for money laundering. True a tax on deposits is potentially a worrying precedent, but with so but non-EU Russian money a large part in the making of this crisis for it's also reasonable that all depositors, or at least all large ones, should have to bear the burden.

Which brings us to another distortion here. Cyprus' is a unique crisis, and one that will pass. To restructure its banks and economy will in the end most probably make Cyprus' economy more diverse and stable. But like other countries they will have to pass through the pain first. Germany's done it. Sweden and Finland have done it. And our focus should not be drawn just to the headlines in Cyprus, but to the struggle of countries along the Mediterranean that are trying to do it now. In the coming days I'll be reporting from northern Greece where economic winter has long outlasted the nature's one. Greece's north has a 40% unemployment rate and struggles to provide basic public goods such as heating and medicines.

However, as with the potential gas reserves Cyprus is considering tapping, a natural resources future may be beckoning Greece as well. Greece may well have considerable reserves of gold, oil and gas. That money can't come too soon, and Greeks will all want it used to help ease the burden, particular among them what may become a 'lost generation' of Greek youth, currently with few opportunities.

Join me, Tom Barton, here on Tomsthumb, and on my twitter account. I'll take you on a journey through the real struggle with austerity in Europe and show you some of the human cost of political decisions like the ones being made in Cyprus right now.