The chaos over the rescue plan, which the Cypriot parliament roundly rejected Tuesday, has renewed many of doubts about the legitimacy of the European project — notably over perceived German dominance and threats to national sovereignty.
Ever since the financial crisis five years ago put pressure on heavily indebted countries — from Greece to Portugal to Ireland — the bailouts have become as much a political as an economic issue, with wealthy Germany taking on the role of bogeyman because of its insistence on strict austerity measures as a condition for help.
Government officials from Chancellor Angela Merkel down know that it would be difficult to sell her countrymen on the idea of bailing out Cyprus, because unlike with Greece, Italy or Spain, there is little sympathy for a country seen as a haven for tax evasion and the ill-gotten gains of shady Russian oligarchs.
Germans needed to be reminded that they have profited from the overall European economic crisis that has produced low interest rates; Greeks, Irish and Cypriots needed to accept that the bailout packages weren't all about austerity but contained a good deal of financial aid, too, he said.
Germany's Frankfurter Allgemeine Zeitung newspaper, a conservative paper widely read in government and business circles, accused Cyprus on Thursday of trying to blackmail the European Union and warned that if it succeeded, other countries such as Greece, Portugal, Spain, Italy and Ireland might follow suit.
[...] the fear is that this deal could lead to an overall loss of confidence in Spanish banks, which in turn could lead to future political problems, said Morten Olsen, an economics professor at the IESE Business School in Madrid.
Ever since the financial crisis five years ago put pressure on heavily indebted countries — from Greece to Portugal to Ireland — the bailouts have become as much a political as an economic issue, with wealthy Germany taking on the role of bogeyman because of its insistence on strict austerity measures as a condition for help.
Government officials from Chancellor Angela Merkel down know that it would be difficult to sell her countrymen on the idea of bailing out Cyprus, because unlike with Greece, Italy or Spain, there is little sympathy for a country seen as a haven for tax evasion and the ill-gotten gains of shady Russian oligarchs.
Germans needed to be reminded that they have profited from the overall European economic crisis that has produced low interest rates; Greeks, Irish and Cypriots needed to accept that the bailout packages weren't all about austerity but contained a good deal of financial aid, too, he said.
Germany's Frankfurter Allgemeine Zeitung newspaper, a conservative paper widely read in government and business circles, accused Cyprus on Thursday of trying to blackmail the European Union and warned that if it succeeded, other countries such as Greece, Portugal, Spain, Italy and Ireland might follow suit.
[...] the fear is that this deal could lead to an overall loss of confidence in Spanish banks, which in turn could lead to future political problems, said Morten Olsen, an economics professor at the IESE Business School in Madrid.
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