March 31, 2013
Two households, both alike in dignity,
In fair Verona, where we lay our scene,
From ancient grudge break to new mutiny,
Where civil blood makes civil hands unclean.
From forth the fatal loins of these two foes
A pair of star-cross’d lovers take their life;
Whole misadventured piteous overthrows
Do with their death bury their parents’ strife.
The fearful passage of their death-mark’d love,
And the continuance of their parents’ rage,
Which, but their children’s end, nought could remove,
Is now the two hours’ traffic of our stage;
The which if you with patient ears attend,
What here shall miss, our toil shall strive to mend.
Much has been written about Cyprus in the past few days, but the seeds of the story were sown long before. One year ago, Cypriot banks took a considerable hit when Greece’s sovereign debt was restructured (estimates of Cypriot loands to Greek borrowers at around 160% of Cypriot GDP). Negotiations on a possible European bailout entered conversation as early as last May (2012). Discussions were frozen until after the recent Cypriot election (February 2013), but this then placed the subject within the remit of the up-coming German election (September 2013). After the Cypriot Parliament rejected an initial agreement last Saturday and further negotiations followed, Cyprus has agreed to a €10 billion bailout with the EU and IMF, a restructuring of its banking sector and a freezing of deposits above €100,000. A government spokesman has suggested customers with the aforementioned accounts should expect about 40% of the balance to be converted into bank shares. Temporary exchange controls are also to be imposed.
General consensus finds that the agreement and outcome on a macroeconomic scale could have been worse. Politically however, the process was a disaster, once again demonstrating how poor the Eurozone leaders are at crisis-management. It has also further entrenched a north-south European divide; fears of the Russian bogey-man, the endless tax burden of Germans, enraged protests by Cypriots dragging up references to a Nazi past. Across the eurozone, hate rumbles, fuelled by political arguments which range between semi-rational and deranged.
In Romeo and Juliet’s tragic story, a letter is not delivered on time and the lovers die. It is very unfortunate. Today’s young European and eurozone population are also faced with particularly unfortunate timing. A recent interim economic assessment of the eurozone by the OECD indicated that recovery and growth should be expected in the second half of this year. The report also forecast considerable divergence between growth in Germany and the rest of the bloc. The economic imbalances seen within the eurozone may well be part of a serious design flaw in the system (economists continue to debate).
Regardless, the lack of leadership and succinct crisis-management amongst the European and eurozone leaders, sets the tone and example for European societies to follow. Yet we would all do well to remember Romeo and Juliet. Ontologically their demise may be ultimately attributed to divided society, entrenched in dispute and disagreement (rational and otherwise). At the end of the play, the divided families finally unite to build a shared memorial for their deceased offspring. The symbolism is potent; an uneasy accord prevails, yet without a future generation there is no hope; “all are punish’d”. The average eurozone unemployment in 2012 stood at 11.3%, compared to the OECD average of 8.0%. In the same year, the average youth eurozone unemployment was 23.1%. Let us hope the Eurozone and the EU can find a reasonable working relationship before the death of its youths.
A glooming peace this morning with it brings;
The sun for sorrow will not show his head
Go hence, to have more talk of these sad things;
Some shall be pardon’d, and some punished:
For never was a story of more woe
Than this of Juliet and her Romeo.