By Alexander Apostolides on July 18, 2012
Things that are cheaper than the Marfin Laiki bailout no.3, 4 & 5: Research, Football and Oil deals
I an still finding the amount the government has given to Marfin Laiki without taking full control of the company staggeringly high. Although this is a crude way, I want to show how big was the bailout by comparing it with other aspects of out lives and understand that this help is unprecedented and it should come with direct nationalisation and control.
What can you buy for 1.8 billion euros?
No. 3. All the nanotechnology funding by Europe.
Cyprus is notoriously not spending enough for research and development and this has an impact on the type of industries it generates. Such a large injection (1.8bn euro) into research and technology, provided it was targeted to worthwhile projects, could provide a tremendous boost to the productive capacity of Cyprus since the Cypriot government by its own admission only provides 25 million euro for research.
Nanotechnology is just the sort of sector where Cypriot disadvantages such as location and lack of resources are not applicable, and were the high skill base of the labour force could allow for successful implementation and creation of a new globally competitive industry.
No.4. All the losses of the top flight football clubs for 2010
We look at the amount of money that Abramomvitch and Sheik Mansour seem to waste on their football teams, yet the total loss of all top flight European football was smaller that the Marfin Laiki Bailout. These fat cats at least are getting something out of all this spending - a chance to be entertained like Roman Emperors of old. I doubt if we will see Marfin Laiki staff scoring wonder goals in the champions league for the amount of money we have spent.
No.5 - the foundations of a high tech oil and gas industry
We hear all these wonderful announcements about the imminent extraction of gas from the sea, but such industries need a frightful large amount of investment. Even countries with exisitng oil industries are having to spend amounts comperable to the Laiki bailout to overhaul the industry they have. If such amounts could be spent by the government on the gas industry then the deals it could strike with any strategic investor would be more more profitable and credible.
Now we hear other banks and the state needing a external bailout of 15.5 bn. When the number is finalised we will begin a new series to show just how staggeringly large that number is for an economy such as ours. That number could overwhelm us into an economic crisis that could be the most severe ever faced in our short history, despite facing insurrections, civil strife, terrorism and war.