Tuesday 19th March

For those in Cyprus it may well be.  Almost hidden amongst the news of the Duchess of Cornwall getting her shoe stuck was the bail-out of Cyprus.  Although tiny in financial terms the fact that yet another country has been rescued from bankruptcy, and incidentally thrown straight into the straight-jacket of Austerity means the Euro crisis is back on track.  For any savers it is devastating, they will lose 6.7% of the value of their often meagre savings, those with larger deposits could lose 15%.  While we may not feel too sorry for those rich Greeks and others who thought putting their money into tiny Cyprus was safer than leaving it at home, an awful lot of very ordinary people will be hit very hard.  And of course none of it is their fault.

We are still living through the greatest financial banking crisis ever, and no-one knows exactly how it will end.  Banks overextended themselves, ever since Reagan in America and Thatcher over here loosened all financial regulations, and Europe soon followed.  Greed and complacency led Governments worldwide to turn a blind eye to bankers getting richer and richer and by the way getting us all deeper and deeper in debt.  And now most of those wonderful investments are turning bad.  At times I have wondered just why rich people and institutions were buying Government bonds which barely paid any interest.  It was for safety in this most uncertain of worlds, surely Governments would honour their debts.  Wouldn’t they?

And the worst of it is that in this eminently connected world you cannot isolate the problem.  Cypriot banks own billions of Greek debt, which will put the spotlight back on Greece.

But there is another big problem with this bail-out; despite EU promises of protection of savers deposits and Government promises when it came down to it they were worthless.  So confidence in banks will take another hit; the authorities are already braced for a run on Cypriot and Greek banks when they re-open on Tuesday (now postponed till Thursday).  And what if this fear spreads to Italy and Spain, and even – dare we whisper it Britain.  There is nothing so powerful as fear, and if people feel their money is not safe and the banks will not pay out or Governments take a chunk then where the hell will we be.

It may not happen of course, it may just rumble on and on, but that is almost worse in a way.  Decades of stagnation, more and more Austerity, more and more destitution, the re-introduction of workhouses, because what else can do with these wretches.  Ah well, enjoy your day, but just watch this one – slow burner that it might be.