EU & Cyprus Update with @SimonDixonTwitt

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An analyst says European countries will do anything to protect an unsustainable banking system solving debt with more debt and the consequences will be huge.

In the background of this the financial and banking crisis in Cyprus is taking a toll on larger depositors with major depositors in the Bank of Cyprus facing potential loss of 60 percent of their assets, which would be converted into market rate bank shares. Regarded as legal bank theft by some, growing public awareness that money deposited in banks actually becomes legally owned by the bank to do with what they want has the world watching Cyprus as an example of what could be faced by Europeans of other countries in the future at any time especially in PIGS countries suffering most from the social and financial consequences of excessive debt and austerity.

Press TV has interviewed Simon Dixon, founder of banktothefuture.com from London about this issue. The following is an approximate transcription of the interview.

Press TV: How do you assess the situation in Cyprus now?

Dixon: What we are seeing is Cyprus I guess being an example for the rest of Europe and the rest of the world for that matter of what happens when you invest upon banks very powerful rights.

There are three things the banks have at the moment: one, when you deposit money with a bank essentially they become the legal owner of your money - and we are seeing that now - (2) they spend with it how they wish, mainly on speculation; and the third thing is the banks actually create money and we've seen the consequences of what happens when you allow banks to create more money than they have on deposit.

And it's very real and very drastic for people that have their deposits with banks.

Press TV: Is there any hope for recovery for Cyprus?

Dixon: Well, what they're doing right now is they're trying to kick the can down the road a little bit further by paying off debt with more debt.

We call it bailouts, but really it's other countries looking for a new market for their debt.

So what they need to do is radical banking reform to change the banking system - the way the money is created and the rules of banking - and be an example for the world actually of what you can do to build a sustainable system.

So, while it's a very harsh time, if they continue to solve the problem with the cause of the problem, there is no hope. But if they use it as an opportunity to make some drastic change in the banking system then they can be an example for the world to follow.

Press TV: Day after day European countries are falling victim to the European economic crisis. How much does this call into question the EU's integrity and of course the trust of the people of Europe in the euro zone currency?

Dixon: When you have lots of European countries, which are deeply dependent upon each other and using each other's assets in order to prop up a broken banking system it inevitable puts pressure on the relationship of the members of Europe.

And what we're seeing right now is unsustainable loans between countries in order to prop up systems because they're inherently unstable and the pressure that causes has really questioned the integrity of Europe.

Dixon:What do you think will happen, will there be a European disintegration?

Dixon: I hope there will be a European disintegration in terms of the currency. You know... there's lots of trouble, which has been caused from the European experiment.

It looks like they're going to anything to protect that system and it looks like countries that Europe is going to become a big Germany essentially and organizations like the IMF are going to find new markets for their global banking system and it's all going to be wound up into one central bank by the end of it.

Dixon: What effects do you think an EU disintegration would have on the US economy?

Dixon: It would have very bad effects around the world, but what we're in is like coming off of drugs, you know, we've been addicted to heroin through debt and that's going to have consequences all round and for relationships.

But we need to ride out those and we need a sustainable system otherwise the consequences on the state and the rest of the world are going to be huge when we're in a system where we keep trying to solve debt with more debt.