Let me get this straight.

Fact 1: Cyprus economy has an annual GDP of approximately 18 billion euro, 1% of Italian GDP;

Fact 2: The bail-out engineered by Europe for Cyprus amounts to approximately its annual GDP;

Fact 3: The 6 billion euro sequester of people’s bank deposits in Cyprus amounts to 1/3 of its annual GDP.

Fact 4: 6 billion euro amount to less than 1 per thousand of euro countries GDP.

Now, I wonder.

A Europe-driven wealth tax on deposits during a week-end, for which ” Jeroen Dijsselbloem, the Dutch finance minister who chairs the group of  eurozone finance ministers that hashed out the deal in all-night talks, declined  to categorically rule out hitting depositors in future bank bailouts” and which hits not the richest segment of the Cyprus population (richest people typically hold wealth not in bank deposits and are more likely to have received advance warning of what was coming), for mistakes that clearly do not relate so much to it, has 2 main consequences:

a) popular support in Cyprus for the euro-project has now suddenly and strongly been hit by a large haircut;

b) savers in the euro area and outside of the euro area will consider giving a substantial haircut to the belief that investing in the euro area is a wise thing. This implies a greater likelihood of 1) a confidence crisis following any negative news regarding the area and of 2) a structural increase in real rates requested for investment in euro-zone financial assets.

Why did we do all this? Because Europe could not spare 6 billion euro to save the ailing banking sector of Cyprus? I.e. Europe could not allocate less than one per thousand of its GDP to remedy the mismanagement of financial institutions whose conduct was supposed to be monitored also by European financial authorities and not by Cyprus citizens?

6 billion euro??

Europe could not spare the change? Well done guys! Now instead of small change we will all pay a huge sum for the destroyed credibility of what looks day after day less and less a political project of global dimensions and more and more a financial mess of local incompetence.