Cyprus deal: the beginning of an endgame for the European project?

It is Tuesday in Brussels. The banks in Cyprus are still closed, but one thing has already become abundantly clear: everybody is losing in the bail-out/bail-in deal that was found for Cyprus over the weekend.

The two biggest losers are obviously the Cypriot people on the one hand, and the European project, the project of European cohesion, on the other.

Of course, the Eurozone finance ministers have lost. They squandered a lot of trust and respect by first agreeing to a deal that would have taxed protected savings accounts of ordinary citizens.

The Cypriot government has lost by trying to hold on to a business model for their country, that has not been sustainable in the first place. The Cypriot people however, is standing to lose a lot, and it is “looking forward” to a very bitter near future, because the recession that is going to hit them as a consequence of this deal, is probably going to be very deep

But also the European cohesion has been impacted very negatively. I found it particularly appalling to see how gloatingly and triumphantly German finance minister Wolfgang Schauble commented this deal by saying he had finally got what he had wanted for a long time already.

I think we are probably at a turning point in this European crisis. Financial deals can be brokered, but the political will to come to agreement, to find compromises, to find solutions, seems to be decreasing all the time.

Cyprus has been handed a heavier, more burdensome deal by the Eurozone than any of the other countries before. The new chair of the Eurozone, the Dutch finance minister, first heralded this so-called solution as a template for other possible future cases. Then he retracted that statement. It shows that they are losing direction and they don’t know what they’re doing and where they’re going. One thing however is obvious, the will to compromise, the will to put yourself in the other side’s shoes, the will to have an understanding from the northern countries of what’s happening in the south, and probably also the other way around, is vastly decreasing. And if we cannot find a new political source for common effort, I’m afraid this Cyprus deal will be beginning of an endgame that is not going to be positive for the European project.

I’m very sceptical, I’m very distressed, I’m very anxious. I hope that all my apprehension may be overly pessimistic, but I think what we really need is to return to a good common answer to a core question: Are we going to tackle this crisis together, or are we just pursuing national interests at the expense of others in the Eurozone and within the wider EU? This questions stands, I’m afraid we don’t have the answers yet I’m afraid we may not find the answers in time. But if the European Parliament doesn’t take up these issues, if we here in Brussels just continue our business as usual, without issuing a clarion call to all the European players to come together for a new effort, then we will not be part of the solution, but part of the problem.

I hope we will be able to do better than that.