Cyprus: the anatomy of a Euro crisis

Cyprus: the anatomy of a Euro crisis

The political economist Ann Pettifor, former head of Jubilee 2000 and now an associate of the New Economics Foundation and policy advisor for Prime Economics, was on BBC Radio 4's Today programme this morning, talking about how to address the Cyprus crisis.

Ann Pettifor, who also contributes to Ekklesia (http://www.ekklesia.co.uk/blog/306), was appearing with Magnus Arni Skulason, chair of Reykjavik Economics - see below for the link.

Iceland made sure its payment systems continued to function while creditors, not the taxpayers, shouldered the losses of banks during its own crisis, taking a hit in living standards and introducing a raft of new taxes to regain control of its financial system.

"Regaining sovereign control is something Cyprus is going to have to do," says Pettifor. "It was under the control of money launderers and speculators."

The country needs policy autonomy to determine its own future again, but has little maneouvrability within the Eurozone and an over-valued currently.

The present Eurozone model is based on capital mobility which permits destabilising financial speculation and hits those at the periphery, like Iceland and Ireland, first. But it is still heading to the core, deepened and worsened by austerity economics, believes Pettifor.

* The brief discussion is here (at 2 hours 54 mins 40 secs): http://www.bbc.co.uk/iplayer/episode/b01rg21w/Today_26_03_2013/

* See also the excellent presentation by Ann Pettifor, 'Delusional economics and the economic consequences of Mr Osborne' here (video): http://www.youtube.com/watch?v=l1GHWrvtI6I

* Prime Economics: http://www.primeeconomics.org/

* New Economics Foundation: http://www.neweconomics.org/

* Debtonation: the global financial crisis (Ann Pettifor's website): http://www.debtonation.org/

* Ann Pettifor on Ekklesia: http://www.ekklesia.co.uk/blog/306

* Frances Coppola (@Frances_Coppola) on Cyprus and the broken Euro: http://coppolacomment.blogspot.co.uk/2013/03/the-broken-euro.html

* Nobel prize-winning economist Paul Krugman, 'Cyprus, serioulsy': http://tinyurl.com/bocvycs

Creative Commons LicenseThis work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 2.0 England & Wales License. Although the views expressed in this article do not necessarily represent the views of Ekklesia, the article may reflect Ekklesia's values. If you use Ekklesia's news briefings please consider making a donation to sponsor Ekklesia's work here.