Daniel Hannan Urges Cyprus To "Default, Devalue, And Decouple" Itself Back To Growth

Tyler Durden's picture

"Either Cyprus is going to have to find the money to fund the bailout, or it's going to have to leave the Euro - to default, devalue, and decouple," is the cold hard truth that UK MEP Daniel Hannan explains in this brief clip. Neither of these paths, he goes on to say, is an easy one, but he believes "there is no doubt the second of them is the less painful - allowing Cyprus to price itself back into the market and start exporting its way back to growth again."

There are no good outcomes for a country as indebted as Cyprus is, "but if I were a Cypriot member of Parliament, I would vote now to go back to an independent currency as the least painful of the various difficult options." Hannan then makes a fantastic point, "in the rest of Europe, we have measured the cost of monetary union in unemployment, deflation, poverty, and emigration; in Cyprus that wasn't enough, they have had to gouge the savers directly," and so the Cypriots who claim to want to stay in the Euro can now quantify the cost of that shackle, as he reminds us that , "you don't have to be a Russian oligarch to have EUR 100,000 in the bank," as he concludes, "the really interesting question is - who's next?"

Now that the precedent has been set (that governments can come after what is in your savings account) what country is safe?


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somecallmetimmah's picture

Hey now, no fair talking commin sense, Minister.

redpill's picture

It's either now or later, malaka!

Lost My Shorts's picture

If only it were so easy.  Do you think the Russians will happily accept a new currency in place of their Euros?

Cyprus is going to get "foreclosed."

TJ00's picture

'Foreclose' is the new "Terminate with extreme prejudice'

fx's picture

As much as I share his proposal - what growth from what kind of , eh, business? growing sheeps? Isn't the world full of them already?

MagicHandPuppet's picture

Global bank run in 5... 4... 3... 2...

Manthong's picture

I think Daniel Hannan is the most outstanding American Constitutional Statesman of our time.

I wish we had someone of similar wisdom and eloquence here..  in the United States.

-- a great speech.. at a more hopeful time:


TruthInSunshine's picture

Once you go Icelandic, you never go back.

Sovereign nations (especially the U.S. and UK) have to make up their minds and either regulate the banks as utilities (not my preference, but still better than unlimited taxpayer $$$ subsidies-- that fund excess & non-market anything related compensation/bonuses of employees and executives-- and too-big-to-fail-- meaning endless rounds of saving them from gambling addiction -- & allegedly-too-big-to-jail status) or let them sink or swim by their own managerial (in)competence and the (un)soundness of their (mal)investment/loan portfolios, period.


Cdad's picture

Crazy talk!  You mean leave it all to a free market?  Madness!

Ghordius's picture

+1. though "bank as utilities" is my preference, and I'm not alone, here

Kirk2NCC1701's picture

That's right, GS:  Malaka!

"Don't fool yourself.. it's winking at you... I'd knew you'd be surprises!"  - F. Zappa.

Sceptical Scot's picture

He talks sense sometimes, but his false trumpetting of Tory 'acheivements' has irked me too often. The man even tried to claim that an Osborne led Treasury was being fiscally responsible, and made no mention to deficit reduction by nationalisation of pension assets.

blu's picture

"exporting its way back to growth again"

That makes no sense at all. The guy is behind the times. Cyprus won't find a market for its goods in a down global economy suffering from sky-high energy costs.

All the bail outs are about the failure of the growth engine. That game is over and it is never coming back.

rotagen's picture

Bullpucky.  There's no way out without abolishing usury and fake debt dropping the euro and making real government printed money.  Cypriots?  Cypros? Olive loafs?  or just use a piece of wood with notches.  Screw the belgian bastards... There's nothing more derogatory than "belgian".

StychoKiller's picture

"Belgium man, Belgium!"  -- Zaphod Beeblebrox, "HitchHikers Guide to the Galaxy"

FieldingMellish's picture

This would not please the squid... ergo, its not going to happen.

BullsNBeers's picture

Agreed. It might catch on too once the remainder of the troubled EU members (read: "most") realize that self imposed austerity and some modicum of self determination may the lesser of two evils.

machineh's picture

I were a Cypriot member of Parliament, I would vote now to go back to an independent currency as the least painful of the various difficult options.

Straight out of the Argentina 2001 playbook.

Cyprus already has the corralito. Why not the debt relief too?

eclectic syncretist's picture

I'll fix this mess.  Somebody get this link to the Cypriot leaders.  Tell them they can give their regards to Drs. Greenspan, Bernanke, Krugman ect.


Kirk2NCC1701's picture

 Better still:  A GOLD & NATGAS-BASED RUBLE!   GAZ(PROM) the IMF, BIS!

Ghordius's picture

"Cyprus already has the corralito. Why not the debt relief too?" and the soft currency that goes with it? wonder if Cypriots want that

Matt's picture

Exactly. If the new notes are worth half as much as Euros, that is a 50% haircut for ALL depositors. 

McMolotov's picture

I keep waiting for some Eurocrat with a cameraman to walk out from behind a bush in Cyprus to inform the planet that we're all on Candid Camera.

Cdad's picture

So....your cosmic bunny hole has also gone super nova.  Glad I'm not alone.

tony bonn's picture

"...but if I were a Cypriot member of Parliament, I would vote now to go back to an independent currency as the least painful of the various difficult options." .."

god almighty, someone with intelligence who is also a politician....i hope his life insurance is current....

Matt's picture

You really think printing your own currency (at what devaluation?) is less painful than just letting Gazprom drill of natural gas?

Sandmann's picture

Hannan is being his usual polemical self. The Brezhnev Doctrine made it clear in 1968 that Czecoslovakia could not deviate from the doctrine of the Warsaw Pact and that Dubcek was a heretic. In much the same way the Euro is an indisoluble union so Cyprus cannot be permitted to leave or to default of find a solution to its problems that deviate from the program. They have botched the first attempt and the Cypriot President has botched this just as he botched the proposals to sort out the divided island when nobody backed his proposals in the referendum.

The Troika will attempt to get Putin to stump up the readies and they will tell him all about their Brezhnev Doctrine.....in case he has forgotten

magpie's picture

Juncker promised war in Western and Northern Europe. How is that going to happen.

waterwitch's picture

...what country is safe?

Surely this couldn't happen in the US of A?


Smegley Wanxalot's picture

No way it can ever happen here. 

Krugman said so - an' he's gotta Nobel Prize thingie

akak's picture


"you don't have to be a Russian oligarch to have EUR 100,000 in the bank"

No, merely an idiot.

"Here, central bank, PLEASE take 5-10% of the value of my savings annually!  I'm too much of a sheep, or an ignorant fool, to do anything wiser or safer with it than allow you to continually devalue it!"

waterwitch's picture

Russian drug dealers don't play nice.

new game's picture

shallow graves take valuable time

boris doesn't get blisters...

i respect ther shit...

a nod of understand.

sschu's picture

With moral and honest leadership focused on getting the country back on its feet in the fairest and most painless method possible, this would be the best approach.

As if that is possible in our world today.

Any option out of the Euro is still better than being stuck forever in the dead-end deal that the EU offers today.



Joebloinvestor's picture

How come the Iceland answer isn't more popular?

ATM's picture

Because it worked and it screwed the vested interests. 

mick_richfield's picture

It is very popular.   But in a world ruled by the Powers who create fiat currency, popularity does not matter.  The politicians do not serve the voters. 

The only way it happened in Iceland is that they gathered around their parliament building and threatened to go Viking.

news printer's picture

 Gazprombank was in Cyprus

Gazprom confirms that came to Cyprus suggesting agreement Cypriot Government, but this does not seem to contradict the bank's own company, Gazprombank.

The Gazprombank did not want to comment on the information broadcast by the television Sigma, that the company representative was in Cyprus offering substantial assistance to the government in exchange for land in the Cyprus EEZ.

The President of the Bank Yekaterina Trofimova, invited by the agency Itar-Tass said that: "No comment."

Earlier this week, Gazprom, made it clear he has not made any offer to Cyprus but refer to something in terms of Gazprombank.

Gogle translation


machineh's picture

'The Cyprus pound was replaced by the euro as official currency of the Republic of Cyprus on 1 January 2008'


That was only five years ago!

I could print these on my inkjet:


akak's picture

Maybe they should call their new currency the Cyprus Ounce.

machineh's picture

Probably you meant to type 'the Cyprus OUCH' ...

terryfuckwit's picture

Silver gold and bit coin bitchez

reTARD's picture

He has met our friend MDB yet. I have an MDB to sell ya!

debtor of last resort's picture

Well yeah. Print yourself to the moon in your own currency like the UK.

wagthetails's picture

I, for one, am thankful that the EU is heading for a collapse at a glacial speed. just moves the US' eventual day of reckoning farther out in the future. I might even be able to steal a few more years of paychecks before chicken's come home to roost.