European Debt Crisis

Desperate but creative measures proposed for Cyprus

Marketplace Contributor Mar 21, 2013
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European Debt Crisis

Desperate but creative measures proposed for Cyprus

Marketplace Contributor Mar 21, 2013
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We may be nearing the endgame of this whole Cyprus thing. On Thursday the European Central Bank gave the Mediterranean island country an ultimatum: You got ’til Monday to come up with a new plan to raise billions of dollars to avoid bankruptcy, or else. The else being: no bailout, potential banking collapse, and quite possibly getting the boot from the European Union. 

Four days to find a way out of the financial mess Cyprus is in will be a scramble, but as my writer friend once told me, a deadline can be a creative muse.   And there are lots of “creative” ideas bubbling up to get the country on better footing. 

The Archbishop of Cyprus is rummaging under the cushions, offering up the church’s assets to help Cyprus.  “The entire wealth of the church is at the disposal of the country to support the people of Cyprus so that the banking system does not collapse,” he said.

Or maybe the money could come from under the earth.  There’s been a proposal to fast track offshore natural gas exploration to raise funds for Cyprus, which might attract more investment from Russia, which could raise even more funds.

Cyprus is so desperate to come up with a plan “they’re really scraping the barrel,” says global economist Desmond Lachman with the American Enterprise Institute.   “They were thinking of raiding their pension fund.”

And the fund-raising ideas are coming from all corners.  Matt Yglesias, economics writer for Slate, offered a modest proposal involving the ongoing conflict between Cyprus and Turkey in a blog post recently.  For decades, Turkey has claimed a chunk of the island, but Cyprus hasn’t recognized that claim.  

“My thought was that Cyprus could sell diplomatic recognition to Turkey, and get some of the money they need,” he says, adding that it has happened before. The republic of Genoa sold the island of Corsica to France, to cover some bad debts, back in the 1700s.

Or for a more modern approach, Cyprus could always sell its corporate naming rights.  Yglesias points out that the island already has different names in different languages—Chypre in French, and Zypern in German—so why not add to the mix?  “It could be US Airways Island, or any number of things,” he says. 

We’ll make that idea Plan Z.

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