Cypriot Crisis Reveals Lack of Rule of Law in Europe

From today's Daily Reckoning:

According to The New York Times, Mr. Artemis “complained that authorities rode roughshod over him and his board of directors by moving unilaterally to sell off units of the bank in Greece and planning to hit big depositors to pay for losses.”

How did this tiny island make it into the European Union (EU) in the first place? The Financial Times gave an insightful background:

“Many EU leaders had been deeply reluctant to admit Cyprus into the union in 2004, without a peace settlement that reunified the island. But Greece had threatened to veto the entire enlargement of the EU — blocking Poland, the Czech Republic and the rest — unless Cyprus was admitted. Reluctantly, EU leaders succumbed to this act of blackmail.”

Five years later, we are seeing the fallout of Cyprus due to Greece’s financial woes. Many accuse Greece of cooking the books to get into the EU, and then the country proceeded to blackmail the EU at the expense of other European countries.

 How did Greece get veto power over admittance of other nations to the EU? Apparently, once a country becomes a member of the EU, it can blackball admittance of other members unless its extortion demands are met. What a great organization! What genius designed this?

Here's the bottom line: there is no benefit that a country can derive from EU membership that it cannot derive more cheaply and with no loss of sovereignty by simply adopting unilateral free trade.