It is quite possible that one day Cyprus will be referred to as the point where the European Union experiment began to unravel. It is too early to know how this story ends, but in the past weeks we have seen centrifugal forces that would have been hard to imagine just a few months ago but are now driving events. The brutal breakup of the Cypriot economy, the revelation that those who wield influence in Europe do not care about the social and political cost of their decisions, set off reactions that are shaking the EU to its core.
We are living through something like the movie cliche of the Mexican standoff, where three or more characters have each other in their gun sights, in a balance of terror, knowing that if one fires then all hell will break loose and no one can be sure of surviving. If, however, the first shot goes off, then everyone has to fire, in the hope that in the end he will be the one left standing. In the case of Greece and other countries receiving bailouts, despite all the tension no one fired. In Cyprus, whether out of stupidity or cynicism, Europe’s bosses wanted to show that they weren’t bluffing, and they used force where sensitivity and diplomacy were called for.
The consequences are many. The troika’s handling of the issue undermined the concept of solidarity and equality among partners (just compare Ireland and Cyprus, for example), and also cast doubt on the security of bank deposits across the eurozone. Today’s EU leaders revealed also that inexperience does not get in the way of dogmatism. On Wednesday, the Commission reported “macroeconomic imbalances” in 13 member states (other than those already on support mechanisms). This confirms that few countries will ride out the crisis without damage, and it increases fears of the economic measures that will be taken and the political consequences that these will have.
Insecurity, the lack of creative alternatives, and the certainty that great difficulties lie ahead have raised tensions among member states. We already have the North-South divide. Now small countries know also that the big ones will trample over them at will (and so little Luxembourg hastened to accede to the demand for greater transparency in its banking system). But the strong ones, too, are quarreling: France accuses Austria of hiding the identities of foreign depositors in its banks, while Austria, in turn, claims that Britain and the United States have rules that enable tax evasion and money laundering. A few days earlier, the United States urged Germany to loosen the reins of austerity, provoking Berlin’s ire. Every day, differences grow, insecurity increases.
The shot heard in Cyprus has shaken Europe. If the continent’s leaders do not hasten to reaffirm that they will protect the EU, that they will protect its citizens, then the Union will be abandoned to endless strife.