By Christos Meliopoulos
A long meeting of Cyprus’s National Council ended up with the majority of parties supporting the country’s eurozone membership. All political sides agreed that they need to get rid of the austerity memorandum, but it was only the communist AKEL party that presented a euro exit as the preferred way of achieving this goal.
AKEL’s Secretary-General Andros Kyprianou repeated that while his party does not consider its proposal as non-negotiable, it still believes that Cyprus would be better off outside the common currency union.
The debate has been held in other countries, most notably Greece. The arguments are more or less the same, although no two countries are alike; which is actually the main problem for a currency union that has not evolved into a full fiscal and banking one.
The devaluation of the national currency would boost exports including tourism, goes the main argument for leaving the euro, so in time benefits would outgrow the exit costs. But for Cyprus tourism might be the only export product feasible right now and complete dependence on a single sector has never been a prudent guide for sustainable growth.
The pro-euro side would also argue that Cyprus has the extra burden of its national issue. Surely, the country would lose some of the support it has built up within Europe over the Cyprus issue if it ignored the concerns of its fellow eurozone members and went ahead with replacing its currency.
Under this prism the National Council’s decision can’t come as a surprise, no matter how fertile a ground AKEL believes the Eurogroup’s handling of the crisis has created. Even if things were different, fear comes into play. How easily could little Cyprus say another big ‘no’, like the one on 15th March?
It may not even have to ask itself such a question again, though, if the current calamitous handling of the eurozone crisis continues by Berlin and Brussels despite increasing warnings by politicians, analysts, economists and civic groups.