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‘This isn’t going to stop with Cyprus’

Published time: March 28, 2013 06:05

Supporters of Cyprus' communist party hold banners and shout slogans as they protest outside the European Union House in the centre of the capital, Nicosia, against the eurozone bailout deal, which delivers a major hit to big bank depositors and will see thousands left jobless, on March 27, 2013. (AFP Photo)

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The Cyprus liquidity crisis will only lead to violence, Wide Awake News founder Charlie McGrath has told RT. The journalist warns that the Cyprus solution may serve as a model as the wider EU deals with the financial crisis.

RT: The authorities have promised to reopen the banks on Thursday - do you think Cypriots can sigh with relief now?

Charlie McGrath: No, not at all. And let’s examine the word reopen, because they are not really reopening. They are putting on all these capital restrictions on the people of Cyprus, 300 euros is the max withdrawal they can make. They can only take 3,000 maximum amount if you are going to travel. You live in Cyprus and you have relatives that live in the United States and the UK, wherever and you want to send them money – you absolutely cannot.

The so-called establishment media is talking about, there’s been enough time that has passed since the announcement of this deal that they don’t think there’re going to have a bank run but the real reason they don’t think they’re not going to have a bank run is because they are really not opening the banks. They’re going to have all type of guards and police and very limited funds that the people of Cyprus can take. So, I don’t think they should be relieved at all, nor should Europe nor the rest of the world for that manner.

RT: At this point - how do you convince panicked savers across Europe that the EU won't dig into their accounts, next?

CM: You do not. If you are in Europe and you’re hearing this broadcast, you know what, if you can go to your bank and take your money out and you don’t, then you better be ready for what’s coming. They’ve made the announcement. They are going to go after savers in order to save these banks. There is no other way to describe it. Jeroen Dijsselbloem, the president of the European Stability Mechanism board of governors, even though he retracted the statement, he said two days ago that this should be the model going forward. There should be no doubt on anybody’s mind in Europe or Russia that they’re going to come after this money.

RT: The capital control will impose a 300 Euro withdrawal limit, to prevent anyone fleeing with the savings. Meanwhile reports say the money keeps flowing out of Cyprus despite any restrictions. Why aren't any measures working?

CM: I think they are working. The banks are closed and they haven’t had bank runs yet. The 300 euro measure is there to keep the people, the actual citizenry of Cyprus from taking their money out. It is going to be a mess. It is a mess now and when they open up, I predict that there’s going to be a lot of people that are really ticked off. We’re already seeing people on the streets protesting. This is the kind of thing you’ll see violence soon, because it is the people’s money; it is their assets that are just being robbed from them.

I know that 100,000 euros (85,000 GBP) sounds like a lot of money, but it really isn’t. That is not a ton of money and if you’re sitting and happened to have your money in the second largest bank, Laiki bank, you’re just got thrown into a bad make category. It is a horrifying situation but we should understand – this is the model going forward. This isn’t going to stop with Cyprus, this isn’t fixing anything inside the EU.

RT: There's been a lot of criticism of how the EU tackled the Cypriot crisis - will its reputation ever be restored?

CM: I don’t think they care, I think they really don’t. The European Stability Mechanism was set up, a lot of people including myself were talking about it almost two years ago, that it is financial governance over Europe. I don’t think they care about the citizens of Europe, the 500 million people on the European continent feel about how this crisis or these crises are being handled. It is governed by crisis by the extreme. They were polite and said we’re going to indebt you early on in this crisis, 4-5 years ago. Now they are making a very bald statement. They are not asking anymore. They’re just going to take it.

RT: Meanwhile, there's obviously massive public discontent with people marching on the streets of Cyprus in protest. What can this lead to?

CM: If somebody is trying to rob you, then it would make sense that this is certainly can lead to violence. That is the ultimate outcome. If somebody is trying to get access to what is theirs, their money so they can put food on their table, and they’re being told no, you can only take out 300 at a time or you can’t transfer to your friends and family around the world, if you go on vacation you can only take out 3,000; I can certainly see tempers flare. There is a reason why G4S, the world’s largest security corporation is ramping up service in Cyprus. There is a reason why the police are going to be at these banks tomorrow. It is because people are going to be ticked.