Tag Archives: Greece

August 1974 – Hubris, Nemesis and Lies

Everyone in Cyprus knows that the Turks intervened in Cyprus in July 1974. However, thanks to clever, well-funded and unremitting Greek propaganda, the world has been led to believe that this was nothing less than a brutal and uncalled-for invasion against the peace-loving Greeks – an Ottoman jackboot to seize Greek land and occupy Cyprus.

Nothing could be further from the truth – but for once the victors have not written the true story of events. Thanks to Turkish Cypriot laziness, incompetence and a refusal to see the PR importance of explaining what really happened, the Greek Cypriots’ mendacious version of events is finding its way into the history books.

The true story is simple. On 15 July 1974, the Greek army, in conjunction with fascist Greek-Cypriot gangs, mounted a coup to overthrow and murder the island’s president. A panic-stricken Archbishop Makarios III fled in his socks to be rescued by the British and flown to safety. An EOKA thug and admitted murderer called Nikos Sampson became the new ruler of Cyprus.

On 19 July 1974, President Makarios addressed the UN Security Council in New York and denounced a Greek invasion. The next day, the Turkish army intervened – quite legally – as a guarantor of the1960 Cyprus Constitution. The British forces on the island were ordered to sit tight and become mere spectators. In 1976, the UK House of Commons Select Committee found that Turkey had proposed joint Anglo-Turkish action under the Treaty of Guarantee. However the then Labour Government in Britain refused to help (see written evidence submitted on 30 September 2004 by former MP Michael Stephen to the House of Commons Select Committee on Foreign Affairs).

They argued that Britain was under no duty to act, even though Article II of the Treaty provided that Britain would guarantee the state of affairs established by the 1960 Constitution. The Parliamentary Committee concluded that ‘Britain had a legal right to intervene; she had a moral obligation to intervene. She did not intervene for reasons which the Government refuses to give.’ In other words, this was not Whitehall’s finest hour.

One of the other inexplicable mysteries of the affair is the extraordinary stupidity of the Greek military junta in Athens not to think through the inevitable consequences of their actions on Cyprus in 1974. A bloody civil war among the Greeks, together with attacks on Turkish Cypriots, gave Ankara the political excuse to move into Cyprus that Turkey had been seeking for years.

The Greek word hubris springs to mind, in its sense of human pride, arrogance and defiance of the Gods. However, hubris is inevitably followed by nemesis – retributive justice from vengeful Olympus  to squash over-ambitious mortals. Nemesis now struck the new Greek-Cypriot regime a fatal blow.

The Greek-Cypriot National Guard and their Greek allies made things worse by making a monumental strategic blunder. One of the principles of war is ‘concentration of force.’ The Greeks should have sealed off the Turkish beach head in the north and counter attacked. Instead, blinded by a determination to wipe out the hated Turkish minority once and for all, they spread their forces all over the island in a muddled attempt to crush the widespread Turkish-Cypriot armed enclaves. The notorious Akritas Plan, to get rid of all the Turks in Cyprus, became the Greeks’ ruinous priority.

This dispersal of effort failed. Turkish forces broke out of the beachhead, and parachute and helicopter infantry were flown in. Outgunned, outnumbered, out-manoeuvred and – critically  lacking air superiority, the Greeks fell back and (on 22 July 1974) the UN Security Council was able to broker a ceasefire that brought an uneasy end to the fighting by 24 July. Turkey had intervened, got her foothold on the island and protected her minority. By then the Turkish forces were in command of a wide land corridor between Kyrenia and Nicosia

Thus far, this part of Turkey’s ‘illegal invasion’ is common knowledge. What happened next is not so well known and is blurred in the history books, because there were two phases to the ‘Cyprus war’. After the July lull there were numerous breaches of the cease fire as both sides jockeyed for position and played for time. The UN ceasefire was more honoured in the breach than in the observance.

On 2 August 1974 Greek forces captured a Turkish armoured resupply column, including an M47 tank and an armoured personnel carrier. (The captured M47 later engaged a confused Turkish tank squadron near Skylloura on 15 August, hitting seven M47 tanks.) Also, on 6 August, Turkey’s 28 Division launched a surprise attack supported by 30 tanks and overran the Greek forward positions around Lapithos (Lapta) and Karavas (Alsanjak), west of the bridgehead to straighten out their line.

By 14 August the Geneva talks, aimed at a political solution, had broken down. Turkey’s demands for a bi-zonal federal state plus complete population transfer shocked Cyprus’ new acting President Glafcos Clerides, who begged for an adjournment in order to consult Athens and Greek-Cypriot politicians. The long shadow of the Machiavellian archbishop fell over the negotiating table, however. No one trusted Makarios, who was dissembling, lying and stalling to the last.

Turkey flatly refused any more delays and the Prime Minister ordered Phase 2 of Operation Attilla. Now with two divisions, an armoured brigade, 200 tanks (many of them the newer M48) and over 150 guns on the island, plus total air supremacy, the result was inevitable. The outnumbered Greeks could do little in the face of such overwhelming Turkish superiority.

The breakout to the West was spearheaded by 28 division and the Commando Brigade, heading for Morphou (Guzelyurt) and Kormakiti. The Greek defenders were pushed back to their final ‘Troodos Line’ to the south. To the east, 39 division’s tanks and armoured personnel carriers attacked along two axes: one raced east towards Famagusta and another to the south east towards Mia Milia (Haspolat), and on towards Larnaca. The 10 Greek battalions and 20 tanks defending the Eastern sector were overwhelmed.

In the centre of the island, a vicious battle developed on 16 August around the Greek national contingent (ELDYK) near the grammar school close to Nicosia International Airport. After the area had been softened up by bomb and napalm attacks, 2000 men of the reinforced ‘Turkish Cyprus Regiment’, supported by 17 M48 tanks, assaulted the regular Greek Army positions. Both sides fought hard. From somewhere near the Star Chinchilla Farm, an unknown Greek Forward Observation Officer (FOO) managed to call in artillery fire from widely dispersed batteries of different guns. This artillery tour de force separated the Turkish armour from the infantry, causing serious casualties until a napalm airstrike silenced the FOO for ever. The fighting went on all day. Four Turkish M48 tanks were knocked out and 100 Greeks died in the fighting before the survivors slipped away.

The final battle was at Pyroi (Gaziler), south east of Nicosia on 16/17 August. As the Turks advanced south, a single Greek infantry platoon with tank support attempted to repel a Turkish infantry battalion. In the fighting four T-34s were abandoned on the road as the defenders fled. The Turks followed, creating the ‘Lourajina Appendix’ in the ceasefire line, bringing Larnaca within range of their guns.

After three days of continuous advance and confused fighting it was all over. Cyprus was sliced in half. The two communities were ethnically separated. Thousands of refugees were displaced from their homes. The Greek Junta and their puppet Sampson went to jail. The UN’s temporary ceasefire still remains the legal position.

Who was responsible? Even the Greek Court of Appeal in Athens ruled in 1979 that the Turkish intervention was legal: ‘The real culprits… are the Greek officers who engineered and staged a coup and prepared the conditions for the invasion.’

Council of Europe agreed: in Resolution 573 it supported the legality of the first wave of the Turkish intervention of 20 July 1974, under the Guarantee Treaty of 1960.

The bitter truth is that Athens and the Greek Cypriots brought it on themselves. Arrogance, pride and stupidity had brought defeat and disaster.

The ancient Greeks were right: hubris invites nemesis…

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EOKA’s Latest Outrage

On 23 January 2019 the UK government reached an out-of-court settlement for £1 million for 33 elderly EOKA-era plaintiffs, who claimed they were tortured by British security services whilst being held in custody during the Cyprus Emergency (1955-9). All were arrested as terrorists by the British for their involvement with Ethniki Organosis Kyprion Agoniston (National Organisation of Cypriot Fighters) or EOKA.

The Greek-Cypriots filed their legal claim in 2015 after Foreign Office documents revealed claims of abuse during the Eoka terror campaign. Justice Kerr of the Queen’s Bench Division ruled for the claimants: ‘A state stands to be held to account for acts of violence against its citizens, it should be held to account, in its own courts, by its own law.’

The sense of outrage at this settlement has united both British veterans of the 1955-9 ‘Emergency’ and Turkish-Cypriots alike. Whilst the claimants beamed for their group photograph outside the Royal Courts of Justice in London, they knew – as do the Turkish-Cypriots and the British – that this one-sided legal decision overlooked the far more numerous murders and atrocities committed by EOKA back in the 1950s. The smiles masked the blood on Greek-Cypriot hands: EOKA didn’t just torture and intimidate, the organisation was nothing more than a reincarnation of ‘Murder Inc.’

The story really starts in 1950, when Bishop Makarios, who later became the Ethnarch or leader of the Greek Cypriot Orthodox church, swore a holy oath with a Greek colonel called Georgios Grivas, who had been born on Cyprus, to bring Cyprus back to the Motherland (i.e. Greece). The majority Greek-Cypriot population of Cyprus supported the idea; they wanted union with Greece, or Enosis. The soldier and the priest planned to make Cyprus ‘Greek’ by getting rid of its other inhabitants via terrorism: the battle cry was ‘first the British and then the Turks.’

Grivas formed his underground group – EOKA – with a right-wing ideology, which made it the exception to the rule of post-World War II insurgencies, as it was not a communist-led rebellion. Eoka has more in common with the Jewish Irgun and Stern murder gangs of late-1940s Palestine.

In 1955 Grivas launched his insurgency with anti-British riots. Then, when EOKA escalated to a series of terrorist attacks, the Governor of Cyprus, Sir John Harding, declared a state of emergency.

Harding realised that intelligence was the key to snuffing out the rebellion. However this presented a major problem: Grivas enjoyed the support of the majority of the Greek-Cypriot population and so information was sparse. Most Greek-Cypriots either supported EOKA or were too frightened to speak out for fear of reprisals. EOKA made sure of this by terrorising its own population through a campaign of intimidation against the Greek-Cypriot members of the police force and their families.

This forced the British to rely increasingly on Turkish-Cypriot policemen who could provide little intelligence about Greek-Cypriot intentions. Hiding in plain sight amongst the Greek population, EOKA’s 1250 members prospered despite the efforts of the security forces. At least 371 British servicemen died during the EOKA period, of which about 200 were murdered. However, Grivas’s ‘Freedom Fighters’ cast their murderous net much wider than the colonial power only. The Greek-Cypriot and Turkish-Cypriot populations suffered far more than the British from their blood-thirsty countrymen. During the ‘Emergency’, EOKA killed 679 Cypriot men aged 18-59; 72 women aged 18-59; 130 men and women over 60; and 132 under-18 boys and girls. Suddenly EOKA’s veterans don’t look quite so heroic. Gunning down your own defenceless women and children in cold blood usually doesn’t rate an award for heroism.

Inevitably the British reacted to this dirty underhand war. Interrogation centres manned by Special Branch and Intelligence officers swiftly became bywords for rough handling of detainees – and sometimes worse.

Allegations of ill treatment surfaced early. Seventy years ago interrogation methods were harsh. The need to obtain tactical information quickly soon led to allegations of abuse in what became a very dirty war. On 26 May 1957, London’s Sunday Dispatch newspaper ran a major exposure of British methods in Cyprus, claiming that detainees had been ill-treated or tortured by British interrogators.

It pointed to the case of Nikos Sampson, the leader of EOKA’s Ledra Street murder gang, whose track record of cold-blooded murders of soldiers and civilians alike earned Nicosia’s main shopping street the nickname of ‘Murder Mile.’ However, Sampson’s well-justified conviction for murder was overturned on appeal by Judge Bernard Shaw, who ruled that Sampson’s confession was inadmissible as it had been made under duress. The smirking EOKA killer walked free from prison.

Another case was the assault and beating in custody of EOKA member Joannis Christoforou, who was stripped naked, beaten with planks, suffered broken ribs and extensive bruising. The case against him was dismissed.

One woman, known only as ‘Mrs XY’ and now in her 70s, on being suspected of being an EOKA member was taken from her home by Turkish-Cypriot police in 1956 and raped. She was then taken to a police station, beaten during interrogation and ‘pushed between her tormentors like a ball’, before passing out. At one point a noose was tied around her neck and tightened. The inescapable conclusion is that some British interrogators broke the law in their attempts to glean intelligence.

However, at least the British have admitted their excesses.

Not so the Greek-Cypriots. Sadly, the myth of EOKA’s ‘heroic warriors’ in the Liberation Struggle has grown over the years. Today’s young generation of Greek-Cypriots know little about the crimes committed by EOKA against both Greek- and Turkish-Cypriots. The truth is that Greek-Cypriots refuse to admit their own grandfathers’ murderous crimes, even long after the British had departed.

The massacres of Turkish-Cypriots committed by Greek-Cypriots continued from 1963 to 1964, after the ‘Emergency’ ended, and even after the Greek coup in 1974. This truth is whitewashed from Greek histories.

The slaughter of 126 Turkish-Cypriots – the majority women and elderly people – from three Turkish-Cypriot villages (Maratha, Santalari and Aloa), as well as the execution of 84 civilian Turkish-Cypriots from the village of Tochni in August 1974 by EOKA, ranks with the Nazi atrocities at Lidice and Oradur.

However, Greek apologists refuse to admit the bloody truth; but the concealed statistics for the Greek-Cypriot deaths tell their own story. UN statistics for the period 1963-74 record at least 133. This is clearly an underestimate, based only on reported murders. Overall, the Cyprus High Commission information booklet gives a total figure of 3000 dead and 1400 missing for 1974 alone, bringing the Greek-Cypriot total for the period 1955-74 to 4833, the majority at the hands of fellow Greeks.

The truth is that the settlement with the EOKA-linked claimants is a one-sided affair. It represents a bargain for the UK, because it suppresses discussion in open court of any unpleasant facts. However it sets a precedent. The question now is, when will EOKA compensate the relatives of those Greek, Turk and British victims they murdered in cold blood? EOKA veterans openly boast of their murderous exploits; so who will be bringing a court case to sue those who gunned down a doctor like Surgeon-Captain Gordon Wilson, or defenceless women like Mrs Catherine Cutliffe, for their bloody deeds? The one-sided settlement with EOKA is an outrage, as it ignores far worse crimes admitted by the Greek-Cypriots’ EOKA killers.

So, as they celebrate their legal victory in the EOKA Veterans’ clubs, the stench of hypocrisy rivals the celebratory Ouzo. And what did they achieve? Nothing. The ultimate irony is that EOKA failed. Not only was there no Enosis, but Greek-Cypriots failed to achieve proper independence either. Having been ruled by foreigners for 3000 years, Makarios and EOKA only managed to rule a united Cyprus for three, from 1960 to 1963.

Was it all worth EOKA’s many murders?

The Doomed Euro?

In any normal January commentators offer their views on the coming year. However, most years, after the usual mix of doom and gloom, the world seems to carry on in the same old way.

This year, however, really is different. Quite a lot of the world is already not carrying on in ‘the same old way.’ In 2019 we are going to realise that something big has changed ‘out there’.

The Eurasia Group, political risk consultancy and adviser to the world’s elites, warns in its latest report: ‘The geopolitical environment is the most dangerous it’s been in decades.’ This is the year that events, and lack of remedial action, threaten global stability and risk collapsing the old world order in a way not seen for many years. The post-1945 Pax Americana is crumbling before our eyes as President Trump unravels the transatlantic alliance that has underpinned Europe since the 1950s. Many blocs – NATO, the UN, the G7, G20, WTO and the EU – are in varying degrees of crisis as new global challenges emerge and as America walks away from acting as the world’s sheriff. The Middle East is a basket-case, fighting its own ‘Thirty Years War’ between Sunni and Shi’a with a wary Israel looking on. In the East, China and North Korea are flexing their muscles; and in the emerging world a new breed of hard-line autocrats are taking over in Brazil, Turkey, Saudi Arabia, the Philippines and Hungary.

The world order is changing – and not for the better.

The outlook is bad enough; but to make things worse, a world trade recession is looming. Global economic forecasts for 2019-20 make for dismal reading: 2019 could turn out to be the year that the world economy falls apart, although timing global economic slumps is like watching an oil tanker running slowly onto the rocks.

This is the wretched backdrop against which the European Union is confronting the biggest challenge to its existence since it began as a dream of a single European superstate back in the 1950s.

The year 2019 will be full of important decisions for the EU, as Brussels will have to set a seven-year budget – without Britain’s cash – as well as appointing new leaders to key institutions, and discussing reform, whilst coping with falling economic growth, the threat of populist national elections, trade frictions with the US, plus the challenges from Russia and China. Brexit is merely background noise to the increasingly embattled, unelected and unpopular bureaucrats sitting in the Berlaymont (European Commission HQ).

The EU is fighting on three fronts at the same time, even as many of its member states have their own domestic problems to contain (the French anti-Macron revolution is a symptom of a wider EU malaise):

  • First, nationalism (aka, ‘populism’)
  • Second, the Catalan rebellion and the Visegrad Four’s mutiny epitomise the growing challenge to Brussels’ rule
  • Third, underpinning everything, is the threat to the Euro. Brussels’ flagship currency is in deep trouble

The smiling celebration party for the euro’s 20th anniversary masked the rising panic among the fat cats, bureaucrats and bankers waving champagne flutes for the cameras. They now know that their grandiose plans to cement the EU together by issuing a single currency was a huge gamble and a serious mistake. ‘The house of cards will collapse’, admits Professor Otmar Issing, ironically one of the original cheerleaders of the euro and the founding chief economist of the European Central Bank (Business Insider, 17 October 2016).

For a real monetary union to work smoothly you need a genuine single authority, plus the ability to swing government money around a united economy. Thus England can pipe London taxpayers’ cash to support Scotland, Wales and Ireland; and the US can shore up the Rust Belt states with money from New York and California. Brussels however does not have the power, or the authority, to transfer rich German taxpayers’ cash to struggling Greece, or to get the Netherlands to pay for the million illegal immigrants who are descending on Italy.

The real economic problem is the EU’s ‘Club Med’. Southern Europe’s economic fragility was well known when Greece was allowed to join the euro, after some pretty dodgy accounting. It was always a risky venture.

To take one simple example, when Greece had its own currency, Athens could stimulate an economic slump by devaluing the drachma: suddenly Greek holidays were dirt cheap and millions of tourists brought their spending power to Greece. Not anymore. Athens was trapped into a currency it could not control or devalue, and which the big boys of the EU wanted to keep strong at all costs.

Devaluation of any German controlled pan-European currency was unthinkable. So Greece was told to cut its budget and live with austerity. That meant that the only way Greece could get extra euros was by borrowing – heavily. Sure enough the big German and French banks were only too happy to lend trillions of euros to the Club Med countries. Unfortunately it became a vicious circle, known as a ‘debt doom loop’, between countries with high levels of debt and the banks that hold that debt.

The problem got worse. Big banks have bought more and more public debt from Eurozone countries. However, should the debts not be paid back (‘non-performing loans’ in Bankspeak) then the banks holding those loans are themselves in deep trouble. Now the euro-banks are running scared. Without payment, they could follow Lehmann Brothers into oblivion. The ‘rescue’ of Greece 2010-13 turns out to have been nothing more than a face saving bail-out ‘loan’ to save the big French and German banks. Even the IMF has admitted that Greece was sacrificed to save the euro and the European banking system from disaster in the great financial crisis.

Italy is the canary in today’s Eurozone coal mine. Italian banks hold one-third of the unpaid euro loans; Italy largest banks hold 300 billion euros of bad debt, dodgy securities and off-balance sheet items that aren’t being repaid. Also, billions of euros of Italian government bonds are held by Deutschebank, Commerzbank, Societé Générale, Crédit Agricole and the Netherlands’ ING.

All this could be solved at the EU level; however there is fierce opposition from Northern European countries to swinging their taxpayers’ money around. In 2018 they diluted President Macron’s proposals for greater money pooling and higher spending in the Eurozone. The idea of stripping elected parliaments’ control over taxation, spending, and the economic policies of the nation state was never going to be accepted; ‘ever closer union’ had hit the buffers of national self-interest, as the UK’s Brexit proves.

Without a means to transfer funds and a ‘fiscal union’ by the EU countries (by pooling everyone’s taxes in Frankfurt and Brussels) the euro is at mortal risk. Now the economic storm clouds are gathering to make things even worse. Eurozone economies are slowing. Even the German economy is contracting. Industrial production was down by 4.7 per cent in the previous year leading up to November 2018. This means that, unbelievably, Germany – yes, Germany – is probably heading for a recession. Meanwhile, Italy has been in recession for a long time and Greece, Ireland, Spain and Portugal are still struggling to escape the last financial disaster. The Eurozone is heading for a full-blown recession; and without the means to devalue, or order ‘government’ spending to boost European economies, a slump seems inevitable. The pressure to break out of the stranglehold of the euro in order to print their own money has never been stronger for some nations.

‘What is clear is that the status quo cannot persist indefinitely if the euro is to survive in the long term’, an LSE blog article warned in October 2016.

This combination of member states’ disillusionment with Brussels, domestic problems, a shrinking economy, massive indebtedness, social and political challenges and the crisis of migration, plus the intrinsically unstable basis of the euro, means that monetary union has failed economically and politically.

Unless the EU27 agree to form a new central Treasury, the euro is doomed. That’s something to keep an eye on in 2019.

Money Makes the World Go Round

For the second time in a month, to my surprise, I find myself agreeing with President Putin.  Speaking at the International Economic Forum recently he warned: ‘We don’t need trade wars today … we need a comprehensive trade peace.’

Cuddly old Vlad was really warning us that there’s a financial firestorm brewing. Looking at what is going on with the euro and the Turkish lira, it’s hard to disagree.

The euro is really our old friend the Deutsche mark, cunningly devalued and disguised to pay for German re-unification, and now Europe’s chokehold currency of no choice. For example, any independent Scotland joining the EU would nowadays be ‘forced’ to accept the euro. Difficult for the Scots: not for nothing did Thomas Carlyle call economics the dismal science.’

Dismal science or not, money makes the world go round – and always has done. Even St Paul admitted: ‘The love of money is the root of all evil.’ This titanic battle for economic power rages around us every day, as China and America tussle behind the scenes over who owes how many dollars to whom and what they are worth, whilst a worried Commission in Brussels watches nervously as its great dream of a superstate called ‘Europe’ begins to disintegrate.

Because the UK’s ‘Brexit’ is the least of the EU’s problems. With Poland refusing to toe the Merkel party line, the Balkan states disobeying Juncker’s ‘diktats’ on immigration, and now a major trade war looming with the USA, Brussels has its hands full. Money is at the heart of it all. The unfolding Italian political train crash that is the new populist, anti-establishment Eurosceptic government is Brussels’ worst nightmare. It threatens their euro. Austrian chancellor Kurz gives the game away, bleating: ‘We saw in Greece how dangerous it is if a country has a bigger and bigger debt and I hope that we will not have a second Greece in our neighbouring country, Italy.’

The reason? Money and debt. Frightened hard currency has been haemorrhaging out of cash-strapped Italy for months, driving it even further into the red, amid fears of a Greek-style euro debt crisis which would bring the country to its knees. The new Italian government is even threatening to quit the euro and set up a parallel currency.

This is serious, because Italy is the eurozone’s third largest economy, nearly ten times the size of Greece’s.

The former chief economist of the IMF – Olivier Blanchard – believes the eurozone is heading for an ‘horrific crisis,’ denouncing Italy’s popular new government’s plans as ‘likely to violate all EU and domestic fiscal rules and put debt on an unsustainable trajectory’. What he means is that Rome is inviting an economic and political war, because the big French and German banks risk losing billions if Italy says, ‘no more pay offs.’

Brussels now has the beginnings of a serious rebellion on its hands. However, once again Italian voters have been over–ruled by EU technocrats, pressuring President Mattarella to ignore the voters, just as the Berlusconi government was toppled in 2011 by Brussels and the European Central Bank, in what was effectively a ‘soft coup.’

This is dangerous territory.

The Italian president’s refusal to accept the Lega-Gillini finance minister because he ‘could provoke Italy’s exit from the euro’ is dynamite. The political message to Italian voters is clear: whoever you vote for, the eurozone rules. A Lega spokesman explained: ‘You have to swear allegiance to the god of the euro in order to be allowed to have a political life in Italy. It’s worse than a religion.’

In Brussels,  Juncker openly threatens: ‘There can be no democratic choice against the European treaties. One cannot exit the euro without leaving the EU,’ and Günther Oettinger, European Budget Commissioner for Budget, actually said: ‘This will teach the Italians to vote for the right thing.’

Because the ECB and Brussels will fight to the last drop of Italian money to stop anyone escaping from their eurozone straitjacket.  The French Finance Minister warns: ‘If the new government takes the risk of not respecting its commitments [in other words, “If Italy doesn’t pay its huge debts to our big French and German banks”], the financial stability of the eurozone will be threatened. Everyone must understand that Italy’s future is in Europe and nowhere else. … there are rules that must be respected.’

This push to smother Italy’s eurosceptic rebellion, as they muzzled Syriza in Greece, comes from a worried Berlin, Brussels, and the EU power structure. But this time they may have blundered into a trap, because the EU’s economic problems grow worse every day. Now debt-ridden Spain admits it is in serious trouble. And Spain owes euro banks ‘zillions’, too. The bottom line for the EU is that if the Italians and Spanish welch on their euro debts, then the euro is finished – with huge international bankruptcies on the cards.

‘So what?’ says the man in the Kyrenia café, ‘How do big economic problems affect me, my family and my bank account? Who cares?’

The answer to the puzzled denizens of Turkish North Cyprus is ‘look at your money.’ Something very odd has happened to their Turkish lira. One year ago, 1 GBP pound sterling bought you 4.30 TRY; ten years ago, on 31 May 2008, a quid bought just 2.12 lira. And today? Going to press, a pound buys you around 6 lira. That’s what international currency fluctuations do to the expat, watching his pension. That’s how small Turkish Cypriot businesses, being paid in lira whilst paying for their rents in sterling, go bust. The reason? Money: because the Turkish lira is now in deep international doo-doo.

For years, Ankara’s AKP government has funded its massive vote-buying economic programme with money borrowed from overseas investors, attracted by Turkey’s generous interest rates. No less than 70% of Turkey’s deficit is covered by short-term foreign loans.

The problem is paying off those loans. Interest payments were biting deeper and deeper into Ankara’s Central Bank’s precious reserves of hard currency US dollars or euros. Loans began to dry up, so the Central Bank increased interest rates to tempt the punters and keep the all-important foreign dosh flowing. The problem is that at 13.5% the interest payments were expensive – but, at 16.5%, they could become ruinous.

At which point Turkey’s would-be President stepped in, boasting that he personally intends to run the economy when he wins the election on 24 June to become all-powerful leader. On his orders, interest rates will be slashed to 10% to save Turkey’s money. Result? Instant panic and predictable flight by spooked, nervous lira investors. Consequence? A market panic with foreigners desperate to unload their lira while they can. ‘Cheap? Your real, genuine Turkish lira. A real bargain, guv … Gotta sell.’

Because that’s what markets do. That’s how economics works: supply and demand. No demand for lira, they go dirt cheap. The result is that Turkey will either have to devalue, introduce capital controls or accept that, whatever their ‘Dear Leader’ thinks, foreigners will decide just what the Turkish lira is truly worth: and foreign investors are not impressed.

As an anonymous fund manager at a major asset management firm, complained: ‘Erdogan is fighting the extremists, he is fighting after the failed coup – now he is fighting the financial markets, and that is dangerous …. You can fight your domestic foes all you want; but when you are trying to take on the global financial market, that is a battle you can’t really win.’

And the EU? Watch this space. Of one thing we can be sure: the Commission, Berlin, Paris and Frankfurt will gang up in a darkened alley, ready to bludgeon, beat, bribe, browbeat and bully Italy to keep their precious euro together at all costs. Once again, the financial gloves are off. It’s going to get ugly. Just ask the Greeks.

Money really does make the world go round.

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Watch Out! There’s a War About

For once I find myself in total agreement with Vladimir Putin, who observed recently in a Blinding Glimpse of the Obvious that ‘the world is becoming a more chaotic place.’ Whilst Pres-for-life Vlad’s BGO doesn’t exactly qualify him as a great thinker, this time he is absolutely right. There’s a definite feeling abroad of an unravelling in world affairs; an uneasy sense that something nasty is lurking round the corner of history ….

As Nigel Molesworth put it so succinctly in Down with Skool: ‘History started badly and hav been getting steadily worse.’ Looking at our increasingly troubled world, maybe ‘the gorilla of 3B’ got it right.

But first, the good news. A few months ago we were all nervously observing a ‘mad, bad and dangerous to know’ US President threatening fire and fury at North Korea’s ‘Little Rocket Man’ over nuclear missiles. It was definitely steel helmet (and don’t forget your respirator) time. Now, thanks to Trump’s interesting blend of diplomacy, brutal economic sanctions and the threat of violence, Kim Wrong ’Un seems to have a sudden change of heart and is smiling for the cameras and shaking hands across the border. Sigh of relief all round?

However, let’s not get too excited. North Koreans have a consistent track record in talks with the South and the US: consistently lying and trousering the ‘Danegeld’ paid to them to behave themselves, whilst they ignore any agreements. We need to watch this ‘deal’ very carefully.

And let us not forget that Dictator Kim was threatening nuclear war whilst still presiding over appalling human-rights abuses as he ruthlessly executed friends and family alike to eliminate his rivals. Nonetheless, if President Trump really succeeds in negotiating an end to Kim’s nuclear provocations and the Korean War (‘Neutral ground or dramatic backdrop?‘, Telegraph, 23 April 2018), he will have defused a potentially apocalyptic global crisis.

Good luck with that.

Now for the bad news; and there is far too much, as Putin warns.  Intelligence analysts are warning that trouble is looming from at least three other directions: Syria and Iran; Israel; and a global economy deep in debt.

First, Syria, where the endless civil war to keep Assad and his Shi’a allies in power has morphed into something new – and much more worrying. UN Secretary General Guterres warns: ‘The Cold War is back with a vengeance – and a difference.’ The difference is that it is no longer cold. Something very dangerous is unfolding in the war-torn Middle East. A little-known Iranian-backed Shi’a group calling itself the ‘Baqir Brigade’ has declared jihad on US forces in Syria,  where Russian and American troops are only a rifle range apart.  The US, UK and France have already attacked Syrian military targets as a reprisal for the latest gas attack. The dangers are obvious. Any Russia and US fighting in Syria could detonate a hot war and set the entire Middle East on fire.

Further north, Turkey has invaded Syria to crush the Kurds – the warriors who really defeated ISIS on the ground. Meanwhile the Iranians and their Lebanese Shi’a proxy, Hezbollah, have set up a new battle front on Israel’s border. Iran effectively runs Syria now and is turning its malevolent eye against Israel.

This time the Mullahs are really playing with fire. Israel is not a normal country. Tel Aviv will fight like a cornered cat against an enemy that has sworn to ‘sweep the Jews into the sea.’ And Israel possesses nuclear weapons precisely to deter anyone stupid enough to threaten Israel’s very existence. Israel has warned that ‘it will retaliate with every means possible,’ if attacked by Iran and its friends.

Ironically, Iran’s nuclear ambitions may be unravelling at the very moment it tries to intimidate Israel. Tehran thought that it had pulled a stroke with nice Mr Obama with his 2016 no-nukes deal to get sanctions lifted, whilst continuing to build its Shi’a empire in Iraq, Lebanon, Syria, and now Yemen. Trump is having none of that. Despite Macron’s pleading for a cosy continuation of flogging French and EU goodies to oil-rich Iran, Trump pulled the plug on 12 May 2018 and re-imposed economic sanctions, blocking Iranian oil sales and wrecking Tehran’s not-so-secret nuclear plans.

This is bad news for the world economy, which is now just as vulnerable to a financial crisis as it was in 2008. Oil is the motor of commerce. Oil prices, which dropped to $30 a barrel in 2009 and 2016, are now rising as production cuts by OPEC and Russia have finally sold the world glut of oil; so supply dries up. Iranian sanctions alone will remove 500,000 barrels a day from the market.

Even America’s new oil-shale output cannot fill this gap between supply and demand. Now Brent crude has risen to $72 a barrel and will probably go higher now that Trump has re-imposed sanctions. This could be a global economic bombshell as various geostrategic crises explode. Saudi Arabia is already talking about $100 crude, setting off a speculators’ scramble;  ‘We are pretty confident that oil will be in triple digits by next year,’ opines Jean-Louis Le Mee from Westbeck Capital.

IMF reports warn of a chain-reaction for world finance. One is well-understood: debt. Global debt has been alarmingly high since the 2008 financial crisis. Since then, nations have continued to borrow hand over fist, pushing worldwide debt to $200 trillion (a trillion is a million, million million.)  That is nearly three times the size of the entire global economy.

The second economic problem is that the Chinese and German economies are going into reverse. Germany’s economy in particular is stalling surprisingly quickly. The economic miracle by the EU’s motor of industry is over and now even Berlin faces economic problems, warns Düsseldorf’s Macroeconomic Policy Institute: ‘The danger of recession has increased markedly. It is a more critical picture than just a month ago.’

All this is happening as Korea teeters on a knife edge, Washington and Moscow go head to head, Syria faces multiple wars, Israel and Iran are shaping up for a catastrophic showdown, and the proxy war between Saudi Arabia and Iran over Yemen gets out of control with missile attacks on Saudi targets by Iranian-backed Houthis. A full blown religious war between Sunni and Shi’a has started. One intelligence analyst warns: ‘All it will take is one Houthi missile sinking a 200,000-ton oil tanker in the Gulf and the consequences would be global.’

Even here, on our island in the sun, alarming events are going on all around us. Suddenly bankrupt Greece is preparing to lease two French multi-purpose frigates to bolster its defences in the Aegean Sea, amid rising tensions with Turkey. Fighters are again on the alert over contested islands. Turkey sails warships to Cyprus to protect hydrocarbon finds. Hostages are being held on both sides. President Erdogan suddenly announces a snap election to choose the country’s next president and parliament on 24  June 2018, to give himself greater executive powers.

All this at a time when the Turkish economy is overheating, raising the possibility of another financial crisis like 2001, when the AKP first came to power promising a strong economy. With Turkish national borrowing skyrocketing and Ankara having to lure foreign money with promises of 13% interest on government bonds, this doesn’t look much like economic competence. The truth is that we are ‘living through interesting times,’ as the old Chinese curse puts it.

Whilst most normal people are just trying to get on with their lives, get to work, earn enough to raise a family and enjoy themselves, all around us alarming events look like coming to the boil. Politically we are living through world-changing history.

It’s an increasingly unstable and dangerous world.  We need to watch out for what is really going on out there.

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