MERKEL ANGER AT CYPRIOT RESPONSE TO BAILOUT CONDITION

photo:Wikicommons

German Chancellor Merkel is not known for outbursts, but her recent response to the anger and doggedness of the Cypriot people has left her upset and resentful.

For the first time in her Chancellorship, Mrs. Merkel has lost her cool.  In a speech made during a parliamentary hearing, she vented her frustration, although she did take some of the blame for herself.

In fact, Nicosia streets have been filled with angry Cipriots bearing signs with Mrs. Merkel's likeness with an ominous mustache drawn on it.  The sign was bound to rankle anyone's nerves. 

Germany is increasingly at the center of anger and resentment at the Euro crisis from the more beleaguered countries, since most of them see Germany as the rich country to the North that has in some way taken all the profits of the Euro zone while leaving less prosperous countries to fend for themselves.  Although many of the Euro zone problems stem from mismanegement of the countries in debt, but also with the devaluation of local currencies during the conversion to the uniform Euro currency, most of the population of the indebted countries see the German behemoth as somehow inimical to them.

Mrs. Merkel on the other hand, is getting very impatient with Cyprus' impasse.  The longer the Cyprus government takes to find a solution the deeper the slump the entire Euro zone will find itself in. She is also unhappy at Cyprus' new proposal to solve the debt crunch by bundling state assets like pension funds and other valuable assets, in an effort to raise 7 billion dollars in capital.   

What Merkel worries about is that a crash might occur in Cyprus' financial sector.  On their part Cyprus is refusing to deal with Germany, or with the EU for that matter.  If Cyprus falls, just as any other of the economies of the EU group falls, it could produce a domino effect that could affect all of the economies in the group.  

Merkel and the German government are particularly incensed at the Cypriot goverment plundering of the pension fund to pay for a bailout that in the end benefits two of the major Cypriot banks.   She has issued a warning to Cyprus that is loud and clear, and the leader of Merkel's party in parliament has said that 'Cyprus if playing with fire."

Source: Spiegel 3.23.13