“Troika prints Euros and buys nations,” reads a protest sign from March 25 in Nicosia, the center of Cypriot government and, these days, fervent patriotism. “Hands off Cyprus” is the common refrain of the ongoing financial crisis that envelops this Mediterranean island and threatens the beleaguered fiscal stability of the European Union.
Well, Cyprus, if you want to hang out with the adults, you must fulfill adult responsibilities as a nation.
“We don’t want your help,” the country has been shouting defiantly. Yet, its banks were closed for a week, with the date of their reopening already pushed back once for fear of a (well-justified) run on them once they resume doing business. Once they did reopen, the head of the central bank resigned in a huff over not having enough say in the bank’s restructuring.
Unfortunately, angry Cypriots fail to understand the complete picture. Their nation, a founding member of the Non-Aligned Movement, decamped in 2004 for the European Union and the promise and strength of its currency, the Euro. It was one of the ten countries to join the EU in 2004 as part of the largest expansion of the group in EU history. (Cyprus should never have been granted accession because its government did not have sovereignty over its entire territory at the time, but that is another story.) It joined the Eurozone—the EU monetary union—four years later. The accession of Cyprus was welcomed by the northern European countries with strong economies and interests in Cypriot trade and tourism. However, it was not welcomed by the Turkish population on the island, which resulted in only the Greek half of the island holding the referendum to join. Cyprus signed its treaty of accession to the EU in Athens.
The “Copenhagen criteria,” which in 1993 became the threshold for joining the EU, state that “Membership requires that the candidate country has achieved stability of institutions guaranteeing…the existence of a functioning market economy as well as the capacity to cope with competitive pressure and market forces within the Union.” Furthermore, it clarifies, “Membership presupposes the candidate’s ability to take on the obligations of membership including adherence to the aims of political, economic and monetary union.”
Cyprus signed on to these criteria. It is obliged to do what is in the best interest of Europe, even if that is in conflict with its own security. But those goals aren’t in conflict. And that is what makes Cypriot vanity unacceptable here.
Cyprus became the fifth Eurozone member to request bailout funds from the EU last summer, in the fallout from the Greek fiscal crisis. The scale of the recently agreed bailout, roughly $13 billion, is the “least onerous on Cyprus,” in the words of the country’s finance minister, Michalis Sarris. How Cypriots can justify resisting fiscal constraints imposed by the institutions that bail them out is mystifying. Last week, The Economist—long a sympathizer of EU political and monetary expansionism—ran an editorial arguing that despite “horrible” politics, the case of Cyprus requires injecting funds directly into the country’s banks and restructuring them.
Even the liberal Sueddeutsche Zeitung (South German Newspaper) is calling the Cyprus rescue package a Pyrrhic victory. “Across Europe, the savers have lost their trust in politics,” the paper wrote two weeks ago, referring to countries like Germany who demand more of the weaker links in the EU chain. Yet, Germans and other hard-liners in Europe need to accept that part of the responsibility of their role as the fiscal leaders in the Eurozone requires some sacrifice. Similarly, Cyprus needs to emerge—quickly—from its nationalistic fantasy if it wants to continue to have a seat at the adults’ table.