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From The Socialist newspaper, 3 April 2013

Cyprus workers protest against the Cypriot government's deal with the Troika - the IMF, Central bank and the EU, photo AFPTV J. Massad

  (Click to enlarge)

Cyprus: Working people must not pay for crisis of euro and capitalism

Niall Mulholland spoke with Athina Kariati from New Internationalist Left (CWI in Cyprus) about Cyprus's deal with the Troika, what it will mean for working people and what is the socialist solution to the crisis
What has the Cypriot government agreed with the Troika?

They have agreed terms that will be a social and economic disaster for the Cypriot working class and small businesses.

Once again working people are being made to pay an extremely high price for the crisis of the euro and the capitalist system.

Cyprus workers protest against the Cypriot government's deal with the Troika - the IMF, Central bank and the EU, photo AFPTV J. Massad

  (Click to enlarge)

The Cypriot government, led by President Nicos Anastasiades, agreed to a 10 billion bailout package with the Troika (International Monetary Fund, European Central Bank and European Union).

Cyprus's GDP (total output) is 17 billion, so the bailout is huge. To qualify for the bailout Cyprus must raise 5.8 billion.

The agreement sees bank depositors with more than 100,000 face big levies, perhaps around 40%. As a result many small, family businesses will face ruin, and many middle class savings will be severely hit.

The country's second largest bank, Laiki Bank, will be closed and divided into a 'good' bank and 'bad' bank.

The Bank of Cyprus will be 'restructured', taking on 9 billion worth of debts from Laiki Bank. It's reckoned that the Bank of Cyprus will not manage to find this amount of money and that the bank could face collapse as well.

Capital controls may be in place for the next month to prevent a bank run. However, it is reported that the rich spirited out vast sums, up to 2 billion, in expectation of the new levy and capital controls.

No vote was taken in the Cypriot parliament on this new draconian package because the new bank restructuring plan, in fundamentals, was previously passed by the Cypriot parliament.

What does the deal mean for the future of Cyprus?
Cyprus workers protest against the Cypriot government's deal with the Troika - the IMF, Central bank and the EU, photo AFPTV J. Massad

  (Click to enlarge)

Essentially, as a result of these measures, Cyprus will be destroyed as a financial centre in the region and will plunge the economy into a deep recession, but that is not all.

A 'Memorandum of Understanding' between Cyprus and the EU will see mass privatisations. The state or semi-state owned telecom system, the electricity industry and the ports will all be sold off, despite the fact that all three industries are currently profitable.

It is estimated all this could wipe out up to a quarter of Cyprus's national income. Ordinary Cypriots will pay the price not the super-rich Russian oligarchs or the Cypriot elite. Years of Greek-style economic depression lie ahead.

Like Greece, the government will be forced to ask for new loans from the Troika. Any new bailout deals will again come with vicious austerity demands.

This is not tenable and raises the possibility of Cyprus exiting the eurozone, at some stage.

How have working people reacted to events?
Cyprus workers protest against the Cypriot government's deal with the Troika - the IMF, Central bank and the EU, photo AFPTV J. Massad

  (Click to enlarge)

The mood of working people has changed dramatically over recent days. The attempt by the Troika to force the Cypriot government to impose a bank levy on small and large investors caused fury among working people and small business people. Big protests involving thousands were held outside the parliament buildings.

Initially, under intense pressure from Cypriot people, the parliament rejected the proposal. This vote was met with jubilation by many workers and small business people.

It sent a positive message to working people in neighbouring Greece and across the whole eurozone and the EU who are resisting cuts.

Meanwhile the Troika put huge pressure on the Cypriot government. The ECB threatened to cut off funds to Cyprus's banks by Monday 25 March, unless a new deal favourable to the Troika was reached.

Consequently, the Cypriot parliament voted for reform of the banks, for capital controls and the creation of a 'solidarity fund' for the banks.

These bills were so complicated that many MPs said they could not understand what they were voting for.

For a couple of days, we had big protests but just from the Laiki Bank employees. It was the first time in Cypriot history there was a demonstration of 7,000 bank workers!

Cypriot banks remained closed and people could only get limited supplies of cash. Real concern and even panic set in. People started to hoard food, afraid that supplies would run out.

On 25 March, when the deal was struck with the Troika, there were no protests at the parliament for the first time in days.

Many people desperately want to believe that some sort of solution can now be found to the country's deep economic problems, even if it will mean 'difficult times' ahead.

But as the full extent of the deal came to light, people's feelings turned to fear and anger.

Should Cyprus exit the euro? Is a return to the pound really a solution for working people?
Cyprus workers protest against the Cypriot government's deal with the Troika - the IMF, Central bank and the EU, photo AFPTV J. Massad

  (Click to enlarge)

Many Cypriots support the idea of leaving the eurozone and rejecting the bullying, unelected Troika and returning to the Cypriot pound.

Cyprus only joined the eurozone at the start of 2008 and so Cypriots associate the euro only with deep economic crisis.

The New Internationalist Left sympathises with the general feeling of the mass of the population who are demanding an exit from the eurozone, which has only brought disaster.

Socialists also want to be rid of the bosses' euro and austerity! But we explain that exit from the eurozone, in itself, and on the basis of capitalism, is no solution for working people.

Exiting the euro could only assist in the revival of the Cypriot economy within the context of the introduction of a socialist programme for the restructuring of the ruined economy

This means banks passing into the control, ownership and administration of society (nationalisation under workers' control and administration) as well as refusal of payment of the debt.

Are workers and youth resisting the Troika deal?

The bank workers' union called demonstrations outside parliament last week. But the right-wing leadership of the bank workers' union called off a strike set for 26 March.

They claimed that they had received 'reassurances' from the government that all job losses would be 'voluntary' and that bank workers' pensions would be safeguarded.

These union leaders have unbelievable trust in a government which, within ten days, agreed, rejected and then agreed again to Troika diktats!

Over 2,000 school students marched in protest at the Troika deal, which only offers them unemployment and poverty or emigration.

On 27 March, a protest of around 3,000 people was called by the 'Movement Against Privatisation and Austerity' campaign, in which Akel's (the Communist party) organisations and trade unions and other leftist organisations participated, including the New Internationalist Left.

Much smaller protests have been called by the nationalists, the far right and fascists. They do not have significant support but they are trying to repackage themselves like Golden Dawn in Greece.

This serves as a warning to the Cypriot working class. Unless the Left fills the political space, the fascists in Cyprus can grow, preying on deeply disillusioned layers in society.

So far, the unions' actions are not coordinated and are not preparing for wider struggles, including strikes, to stop the Troika attacks.

The unions, youth and student organisations, anti-austerity campaigns and Left parties need to co-ordinate the struggle and discuss an alternative plan, based on the interests of working people.

What is Akel calling for now?

Akel has called protests but not put forward a real alternative. Its MPs abstained during the 22 March vote in parliament on levying bank deposits.

Akel leaders said they "did not want to attack the president" during the country's crisis!

The party claims it has a '15-point programme' to show a way out of the crisis but they refuse to make it public.

Akel held the presidency up until a few weeks ago - without introducing anything like a socialist policy - so their 15-point programme is highly unlikely to be a radical departure from crisis-ridden capitalism.

The party leaders were fervent supporters of joining the eurozone and still defend it.

What does the New Internationalist Left call for?

We call for a solution based on the needs of working people: Refuse to pay off the 'debt'; nationalisation of the banks under workers' control and administration, for the needs of society. Guarantee that the small deposits, pensions and welfare funds will be safeguarded; debt cancellation for working people, not for big business!

A programme like the above - actually any refusal to abide by the demands of the Troika - will immediately raise the question of the currency.

A workers' government ought to have a plan to deal with exit from the euro and for a return to a national currency, without, however, allowing any illusions that this could provide a solution on the basis of capitalism, but that it must be incorporated within a socialist and internationalist programme.

We call for Cypriot workers to link with the workers' movements in Greece and the rest of Europe - our real allies! - not the ruling classes and governments of the EU.

A new powerful Left needs to be built in Cyprus, with the aim of forming a government based on the needs of working people.

The situation facing Cypriot society is desperate; only a bold revolutionary internationalist programme can resolve the crisis in the interests of the masses.

The full interview can be read on

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In The Socialist 3 April 2013:

Socialist Party news and analysis


PCS: Striking against Con-Dem attacks

Call for national strike narrowly defeated at NUT conference

Them & Us

International socialist news and analysis

Cyprus: Working people must not pay for crisis of euro and capitalism

Socialist Party feature

Abolition of Agricultural Wages Board will result in increased rural poverty

Socialist Party workplace news

Defend Crown post offices

Teaching Assistants strike for agreed pay level

Workplace News in brief

Fighting the Bedroom Tax

Over 5,000 march in Glasgow against the Bedroom Tax

Anti-cuts Warrington councillor supports Bedroom Tax protest

Opposing the Bedroom Tax in Leeds

Fight to scrap the bedroom tax is underway in Swansea

Socialist Party reports and campaigns

Sussex University: occupation over but campaign continues

Lakanal fire: Action needed to prevent a repeat tragedy

Workfare and the Labour Party: 'A less than stellar party'

TUSC Mary4Mayor campaign launched in Doncaster

Sick Of Your Boss: young people in work - your stories

Interview: Wirral Youth Theatre cuts

"Is green growth possible?" debated

Don't miss May Day greetings deadline!

First quarter fighting fund target smashed


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