The terrible price of attempting to touch what we cannot not reach

ALL THOSE trying to find an explanation for the lamentable mess that our economy is in should bear in mind that they will never reach the correct conclusions if they do not examine the matter within the context of our general bankruptcy as a country in all fields.

It is not possible to comprehend the different failures without looking at them together and searching for common causes. That, for example, the economy has been reduced to today’s disastrous state, on the brink of bankruptcy, is not unrelated to our political bankruptcy, which may have happened earlier, but, in essence, has the same causes.

Our culture on issues of the economy is not very different from our political culture. Our mistakes in both departments emanate from our national flaws – lack of seriousness, superficiality, ignorance and the over-estimation of our capabilities. These lead us to take important decisions, without serious study and a rational evaluation of data, basing them instead on delusions, wishful thinking and an irrational over-estimation of our capabilities.

We suffer from a syndrome of gigantism which pushes us to set goals that are way beyond us. And with our inadequate means it is impossible to achieve these. As the saying goes, we like “to stretch our hands to where we cannot reach”. And of course the result is usually failure, with tragic, often unbearably difficult consequences. A look at the history of our state, in its 52 years of life, serves to confirm, in the most emphatic way, this painful truth.

The nightmarish situation that our banks are facing is the result of the above-mentioned flaws. They stretched their hands where they could not reach. The gigantism culture pushed them into the mindless expansion of their operations in Greece and other countries. 

Common sense should have dictated that Cyprus, a microscopic state of 800,000 people, could not sustain an over-large banking system so exposed to dangers. But common sense, as usual, was sidelined for the sake of grandiosely ambitious goals which were quite clearly beyond the scope of small companies like our own.

Now that the results of these catastrophic delusions of grandeur are evident, we should get serious. We should put our feet firmly on the ground and return from where our gigantism took us to where our small size allows us to be; once we have settled the bill for our mistakes, which will take many years.

In the Bank of Cyprus’ announcement about its recent attempt to raise capital through the sale of new shares, there was reference to its effort to complete the sale of its operation in Australia. That is a step in the right direction. The disposal of assets must be the priority of our banks as part of the reverse path – a down-sizing aimed at returning to realistic levels.

In the case of the Bank of Cyprus, I wonder why no attempt has been made to sell its operation in Russia. The big words and declaration of grand ambitions when the investment was made have also proved hot air.

It is high time we understood that today’s economic and political ruins were caused by the horrific disease we suffer – gigantism. It is time we accept our mistakes, recognise our real size, leave behind us the grand designs and the big words and landed back on earth. 

Self-knowledge is the only path that will lead us through the ruins, even though seriously hurt, to the exit from the crisis and on to survival.