Where do we go from here?
Is Cyprus another Greece, threatening the Euro? Or is it a special case, with an outsized banking system that needs propping-up from outside the system.
Like most things, it’s a little bit of both. Ironically, an answer can be found in the title to this commentary. The Bitter Lemons of Cyprus is a personal memoir of the author’s time on the island in the mid-‘50s during the run-up to violence between the Greeks, Turks, and British.
In the book normally friendly neighbors become hostile and violent, as outside pressures force trust to break down. Transactions that were a source of profit and pleasure become impossible, and the author’s colonialist attitudes—emblematic of the British Empire—undermine any good he tries to do.
In the end, the author sneaks out of the country, lamenting what was lost. As civil wars go, Cyprus was mild—nothing like the Greco-Turkish war on the mainland, with its hundreds of thousands of casualties. It was an outgrowth of a larger problem, but didn’t precipitate further problems in its own right.
Europe can only hope that Cyprus’s current financial problems will be similarly contained.
Douglas R. Tengdin, CFA
Chief Investment Officer