Lesson from Cyprus: Spending Restraint Is the Pro-Growth Way to Solve a Fiscal Crisis | Cato @ Liberty

Map of Cyprus with EU flag

Map of Cyprus with EU flag (Photo credit: Wikipedia)

This is an outstanding must-read article from the Cato Institute. It argues that unlike many other European nations, Cyprus decided to deal with its over-spending problem by tightening belts in the public sector rather than the private sector.

Source: Lesson from Cyprus: Spending Restraint Is the Pro-Growth Way to Solve a Fiscal Crisis | Cato @ Liberty

The article puts Cyprus on a pedestal as best practice and this will be good for Cyprus to attract inbound investment and borrow money in international markets.

However, the article ignores the political and social context.

Firstly, Germany gave Cyprus a very raw deal because she was small. German policy makers deliberately tried to destroy Cyprus business with large Russian companies.

Secondly, unlike bigger countries like France or Italy, Cyprus could not manipulate the rules of the fiscal compact.

Thirdly, the Cyprus example highlights that the EU economic engine is a sham. There is no cohesive energy strategy that capitalized upon Cyprus’ offshore gas reserves. Meanwhile, Angela Merkel, in a box domestically because of her refugee policies, was able to get the EU to stomp up EUR3 billion for Turkey.

The bottom line is that it is not possible to consider economics in isolation, social and political policies must be dovetailed.

In the case of Cyprus, the real prize will come from reunifying the island.



Opinion – When – if ever – will the real Cameron stand up? – Simon Heffer – the Daily Telegraph – John Gelmini

Sadly, I think that Dr Alf and Simon Heffer are going to be disappointed by David Cameron, the man whom when asked why he wanted to become Prime Minister said “Because I think I’d be rather good at it”.

To me that phrase does not smack of conviction of the kind Lady Thatcher possessed but of vacillation, trimming with the wind and following secret orders.

The real David Cameron is a human hologram presenting whatever people wish to hear at any given moment and then morphing into a different role when speaking to someone else. Thus President Erdogan of Turkey is reassured by words about EU membership fast tracking, the UK public are told in stentorian tones that Turkey will not be an EU member until the year 3000.

He never was a true Conservative but is in fact rather liberal and a proponent of the Committee of 300’s agenda of de industrialisation and the hollowing out of the middle classes.

Simon Heffer, who is a ginger haired florid faced Englishman and who writes thundering pieces of reporting has just discovered that the Prime Minister is not a true Conservative as have his MPs and the people who work tirelessly to get Conservative MP’s elected.

Unlike Dr Alf, I do not yet find myself attracted to the ideas of moderate Labour MPs and do not believe that the Labour Party is electable. The Conservatives need a new leader, ideally someone like Andrea Leadsom, so as not to split the party and have a sharp telegenic spokesperson for sound policies on taxation, fiscal policy, defence, law and order, health, business, transport and family life.

John Gelmini