The Cyprus deal

So, Cyprus apparently finally has a bailout deal. The cost? Basically total economic collapse, and a decade-long depression. if that's what "success" looks like, you really have to wonder what Eurocrats define "failure" as...

But its been obvious all along that the EU/IMF's definitions of success and failure have nothing to do with the fate of ordinary Cypriots, but rather with the "credibility" of the Euro (which means presenting a threat to Spain and Italy should they ever ask for a bailout). But even on that front, they've failed - the capital controls needed to staunch the damage the EU/IMF has caused mean that Cyprus will still be in the Euro only in theory. In practice, the common currency has been ended in all but name.

All of this was avoidable. The problem with Cyprus' banks was caused by the EU/IMF's "bailout" of Greece, and known about for a long time. But rather than working slowly towards a solution, the EU/IMF sat round until it became a crisis. And the result will be to further de-legitimise the EU as an institution.

But the worst thing is that this won't actually solve anything, and all Cyprus' pain will be for nothing. The economic disruption caused by the managed collapse of one of Cyprus' two main banks (and the effective freezing of every business's bank account), plus the natural effects of German-imposed austerity is going to mean a blowout in Cypriot government debt, which will mean another bailout in a couple of years time. But hopefully by then Europe will have some better leaders...