The European Commission knew what it was doing. It refused to bailout Cyprus because it would be seen as bailing out about $4 billion in Russian deposits. But it had to abandon its sworn policy that there would NEVER be any default in Europe. Guess that was like Bush’s “read my lips – no new taxes” pledge. This goes against everything that was to be the reason to join the Euro. Instead, Cyprus lost its sovereignty and got nothing in return but a death sentence for its economy going forward.
Russian President Vladimir Putin on Thursday ordered a sudden large-scale military drills in southern Russia, with the aim to test combat readiness of the troops. About 7,000 troops were put on alert without early warning. This is clearly a Russian response to the stupid action of the European Commission. It is abundantly clear, Russia could take Europe in a heart beat. It would take more than a month to just agree to disagree.
The timing of this military exercise taking place today UNANNOUNCED is a signal that the European Commission made a stupid choice. The amount of money involved was nothing compared to €300 billion for Spanish banks. Military exercises are the way nations show force. The US does this all the time whenever a nation disagrees. So the action today is a clear indication of the European Commission’s wrong move.