It doesn’t matter much whether you hang yourself here or somewhere else, if you’re going to hang yourself anyway.
Georges Brassens, Je Me Suis Fait Tout Petit, 1957
On the whole, I have always agreed with Georges Brassens that if one must hang, the details are unimportant because the result is the same anyway. However, in the case of Cyprus, a country that will soon face the rope, there maybe nothing that will save that country from enduring terrible pain today but there are choices available that can make a big difference for the future of the Cypriot people. In this case, I agree with Paul Krugman that since Cyprus will suffer anyway, they should leave the euro now. Regardless of whether an agreement is reached that staves off the immediate disaster, it seems inevitable that Cyprus is in for a long period of terrible suffering. In other words, Cyprus is screwed. This part of its fate is inevitable.
But if Cyprus chooses wisely it can severely limit this suffering and emerge from this crisis in a better position for the long-term growth of its economy and a better future for the people. The island will soon undergo the sort of economic collapse and all of the pain that is said to have made joining the euro an irrevocable decision. If Cyprus remains in the euro zone, it will suffer under a regime of murderous austerity for a period of several years, perhaps as long as several decades. We see the results of such austerity in Greece today, where the country’s historical heritage is being systematically looted and the people are being crucified on the cross of artificial gold called the euro. Greek families are being impoverished and destroyed. Entire communities devastated.
Today, there is hunger and abject poverty like that of the third world in a member state of the European Union, something we would have thought laughable only a few years ago. It will probably take decades for Greece to catch up to what it was before the crisis, perhaps it never will. This is not necessarily the fate of Cyprus. If Cyprus leaves the euro, Cypriots may be spared the worst. There may be positive short term effects, too. For example, devaluation will surely make the country more attractive for tourism, which is its main industry anyway. Exports will become more competitive and the economic pain shared more widely and equitably in society.
Clearly, the immediate fate of Cyprus is already written. But if they will hang anyway, why not get something out of it? That is why I urge the Cypriot people to act now and act boldly for a better future for their country. Yes, today’s generation will be hanged by the bankers and the Troika, but they have a golden opportunity to lay the foundation for a renaissance of the Cypriot economy. Cyprus must leave the euro. The grandchildren and great-grandchildren of today’s Cypriots will thank them.