The economic crisis from Buenos Aires to Cyprus … and back again

Social protests against the “corralito”. Photo taken by Barcen on Wikimedia Commons, CC BY-SA 3.0

In late 2001, Fernando de La Rúa and his finance minister Domingo Caballos imposed what is known  as the “Corralito” (corral) on the Argentinian people which blocked the free movement of bank accounts and savings. They established limits for bank drafts but they couldn’t fix the economic crisis in the country. This caused a sustained wave of popular anger which overthrew five presidents in a row. Here in Brazil, back in 1992, we had Collor’s government impeached for corruption. A government that starts out by restricting the amount of money people can take from their accounts is as cruel and unpredictable as one that attacks the pockets of workers and the middle class.

Now the economic crisis has global dimensions and Europe has been suffering its effects for some years. It’s the financial market crisis which has led to crisis in all segments and all the “Euro’s peripheral countries” have been used as guinea pigs for the bitter medicine doled out by the Troika, the economic political committee led by the European Commission, the European Central Bank and the International Monetary Fund.

The little euro economy Cyprus is now in the media spotlight. After the readjustment plans for Greece, Portugal, Spain, Italy, the bailout package offered to the country seems to be a slap in the face to the Cypriot people. Taxation of bank savings extends even further the arsenal of brutal instruments that European governments resort to in order to save the banks, no matter how much their populations might suffer in the attempt.  This kind of move from strong economies shows acting with a blatant disregard for the people is not the exclusive prerogative of developing countries.

The Bank of Cyprus’s huge headquarters in Aglandjia, a suburb of Nicosia. Photo taken by Petros3 on Wikimedia Commons, CC BY-SA 3.0

The mobilization of millions against these austerity plans triggered a general strike in Europe, and had an even stronger impact on countries already affected by the crisis. All around the world, alternatives are being discussed. The Greek Coalition of the Radical Left – Unitary Social Front (Syriza) and the outraged people filling public squares in Spain are possible alternative starting points, and here in South America we are also thinking about solutions.

On the first Easter Holiday under the Argentinian papacy, hundreds of young people got together in Buenos Aires for an anti-capitalist camp. The mobilization of Cypriots gave an added impetus to this three-day meeting of lectures, debates and proposals that showed that people of the world can indeed also be protagonists for change.

Anti-capitalist camp in Buenos Aires. Photo taken by Antônio Neto. CC BY

        Over here the crisis is more about a reduction in imports which internal markets haven’t been able to cope with. Inflation is a reality in countries like Argentina while the Brazilian economy is on the verge of a recession. The gross domestic product (GDP) in Brazil expanded by 0.90 percent in 2012, way off the government’s forecast of 4 percent. Brazil also recorded a trade deficit of 5 USD billion in the first quarter of 2013.

In an ever more interconnected world, crises are rapidly globalized. So here –  at “the end of the world” as Pope Francisco said, talking about his country –  we are seeking collective answers for global issues and trusting in Latin America’s creativity as a pole of resistance to the onslaught of financial capital to find it. People are trying to figure out ways to prevent Latin Americans from the same suffering Cypriots were subject to.