“In the Margins of Europe”: Cypriot Nationalism, Liminality, and the Moral Economy of the Financial Crisis

This article argues that Greek Cypriot nationalism has been in large part motivated by the misconceived idea of Cyprus becoming a modern, European society. Although Cyprus joined the European Union in 2004, the perception of it by the European north as a culturally marginal Mediterranean society had not changed. This was amply demonstrated in 2013 when Cyprus applied to the EU for urgent financial assistance. It was forced to capitalize its banks through their customers' savings and, although this and other “corrective” measures were couched in seemingly rational economic terms, they were unmistakably a punishment and a civilizational lesson.

"In the Margins of Europe" 119 as mainland Greeks and Turks have been travelling in the West, which is to say, they have been striving to become like the West, supposedly "modern" and "civilized." A second and perhaps more controversial contention is that this is a Sisyphian task, a never-ending journey as there is no such destination to be reached or condition to be appropriated. The West, as much as the notion of modernity itself, is simply an idea or, to put it more strongly and provocatively, a figment of the imagination. There is no such entity that exists in and of itself; to the extent that such an entity exists and is itself, it is only in relation to something not itself, a discredited but nonetheless indispensable other. To be, it must be West of an East, another point arbitrarily chosen on a circle that turns constantly and knows nothing of beginning and end, east or west-a circle on which every point can be both beginning and end, as good an east as a west. Without an Orient then, the West would lose its orientation and disappear in thin air. 2 This means that it pays all those who imagine themselves as the West and wish to be something rather than nothing to maintain an Orient at all costs-sometimes, as we shall see shortly, as a source of inspiration and even a tool with which to critique the West.
Much of this is of course well known. What seems to have received less attention is the predicament of all those societies-which is most, if not all societies around the world-travelling in the West. They become liminal-the third contention of this article-which is to say, entities that are neither here nor there, neither this nor that. They get caught "between and betwixt" what they themselves reject for not being "modern and civilized"the East-and what rejects them for not being "modern and civilized"-the West. 3 What is perhaps even less discussed is that this predicament befalls also societies in the European periphery, "the margins of Europe," 4 such as Cyprus-a case of the marginal becoming liminal. This is the case even when the marginal appears to have merged with the center, as Cyprus had done in 2004 when it joined the European Union. Yet, the country is now no less peripheral and marginal than it has ever been for the simple reason that without a periphery there can be no center. And there should be no doubt: Europe posits a center for itself and is determined to maintain it.
The aim of this article is to demonstrate these claims by exploring the recent history of Cyprus and an even more recent event-a "haircut"-the moral economy of the recapitalization of the Cypriot banks by means of their clients' deposits as the condition imposed by the European Union for saving the country from defaulting.

TRAVELING IN THE WEST
Part travel book and part novel, Lawrence Durrell's Bitter Lemons of Cyprus describes his short sojourn on the island in search of inspiration and, once there, also as a civil servant in the employ of the colonial a government. The time was 1957 and the Greek Cypriot struggle against the British-in essence, a struggle to liberate Cyprus from British rule and bring it under Greek rule-was in full swing. Anti-British sentiment was running high but even so one of Durrell's close friends, a Greek Cypriot nationalist teacher, could still argue that, in reality, Greek Cypriots loved the British. There is a paradox here, no doubt-in fact, there are two paradoxes and I will turn to the second shortly. If Greek Cypriots loved the British, why fight them? Was this man lying or talking nonsense? Hardly. There is no doubt that Cypriotsboth Greek and Turkish-genuinely admired the British. They admired them to such an extent as to want to become like them. And if Durrell is to be believed, to a large extent, they had succeeded. Durrell came to Cyprus looking for inspiration. He was looking for the exotic but what he found was deeply disappointing.
Disturbing anomalies met the eye everywhere; a Cypriot version of the small-car owner, for example, smoking a pipe and reverently polishing a Morris Minor; costumed peasants buying tinned food and frozen meat at the local version of the Co-op …. As far as I could judge the townsman's standard of living roughly corresponded to that of a Manchester suburb …. Somewhere, I concluded, there are must be a Cyprus beyond the red pillar-boxes and the stern Union Jacks … where weird enclaves of these Mediterranean folk lived a joyous, uproarious, muddled, anarchic life of their own. Where? [emphases added] 5 The life that Durrell witnessed in Cyprus in the late 1950s was not "proper" Cypriot life, which is to say, not exotic, Mediterranean, Middle Eastern enough. It was disturbingly familiar, a version of the kind of life that one could encounter in a Manchester suburb. Greek Cypriots fought the British, then, not because they did not like them but precisely because they liked them so much as to want to be just like them, especially in certain important respects the British would not allow. The fundamental problem here was the same as in the rest of the colonized world. As Chakrabarty points out in the case of India, the British preached freedom to Indians but refused to grant it in practice. 6 They argued that Indians were not yet mature enough to govern themselves. It is for freedom also that Greek Cypriots fought the British even though the picture in this case is rather more complex-which brings me to the second paradox. Cyprus is probably the only colonized land to have fought against colonial rule not to become independent but part of another country. 7 Greek Cypriots fought the British because they wanted Cyprus to become part of Greece. A textbook case of nationalism, one might say. Perhaps, but the paradox of fighting against one rule only to come freely and willingly under another should not be ignored. If anything, it must be sharpened. To say that the Greek Cypriot desire is a manifestation "In the Margins of Europe" 121 of nationalist sentiments may be true but explains very little. To understand why Greek Cypriots wanted to become part of Greece we must examine two parallel and complementary processes in a specific historical context. The context is the invention of ancient Greece as the cradle of (European) civilization, the Europeanization of Greeks, which meant first and foremost their de-Ottomanization. 8 Greece was an Ottoman province for almost four centuries and gained its independence in the early 19th century. By that time, ancient Greece had been firmly established in the European imagination as the cradle of (European) civilization so much so that some of the more romantically inclined Europeans actually went to Greece and fought in the Greek war of independence-notable among them Lord Byron. For such people, it was inconceivable that the land that gave birth to democracy, philosophy, theatre, and so on was under "oriental" rule. Much the same can be said about many educated Greeks who lived aboard and were deeply influenced by the Enlightenment and the French Revolution, notable among them, as Anderson notes, Adamantios Koraes. 9 The descendants of the ancient Greeks, the people who had just gained their independence, were nothing like western Europeans. Yet this, according to the nationalist, Eurocentric argument, was both understandable and reversible. If contemporary Greeks were more like the Ottomans than other Europeans, it was because, unlike the latter, they had experienced neither the Renaissance nor the Enlightenment. They were kept by the Turks in the Middle Ages, as in museum. To catch up with the rest of Europe and to become what they were meant to be-"modern and civilized"-contemporary Greeks had to de-Ottomanize themselves, beginning with their language, which was to be purged of all foreign elements. Significantly, the language invented to replace the vernacular was called katharevousa, meaning "pure" or purified, and closely resembled ancient Greek. An indication of the power of this nationalist ideology is that this fictive language was still taught in schools in Greece and Cyprus as late as the 1960s.
It is within this context that the Greek Cypriot desire to unify Cyprus with Greece should be understood-a context in which it was asserted that by right, as descendants of the ancient Greeks, contemporary Greeks were de facto Europeans, even if not yet "modern and civilized." This is not to say that this claim went uncontested. But if it was possible to contest it in relation to mainland Greeks, it was even easier and more likely to do so with regard to Greek Cypriots. The island is much closer to Turkey and Syria than any part of Greece. The British and other European travelers expected its culture to be Levantine and, as we have seen, Durrell found the similarity of urban life in Cyprus to that of European cities a "disturbing anomaly." But it was not simply that Cyprus was thought of as part of the Middle East. It was also that the Cypriot claim to Greek ethnic identity was actively disputed by the British who wanted to maintain control of the island. 10 Becoming part of Greece then was imperative. It would put an end to this sort of disputation and guarantee Cyprus' European credentials.
The Greek Cypriot call for union with Greece was met by the Turkish Cypriot call for the division of the island and union of one part with Turkey. Safety was no doubt paramount in this, but nationalist sentiments and their relation to cultural concerns should not be overlooked. Turkish Cypriots were themselves de-Ottomanizing themselves-a process of Europeanization initiated in mainland Turkey by Mustafa Kemal and the founding of the Turkish Republic in 1923. The Turks were determined to show the world (and themselves) that a Muslim country could be secular, democratic, modern, and civilized. They still are of course. In the last few decades, the aim has been to demonstrate that a Muslim country can be religious rather than secular and democratic, modern, and civilized. Indeed, given its history and proximity to Europe, it could also be a member of the European Union. Turkish Cypriots were warm supporters of the Kemalist revolution and its Europeanizing message and still are today, more so now perhaps than ever before. They too have been travelling in the West-on a different path perhaps but parallel to the Greek Cypriot path.
In 1960, Cyprus became an independent country despite itself but the seeds of conflict had already been sown and the first intercommunal violence erupted in 1963 to be followed by more violence in 1967. 11 In 1974, there was a coup against the then-president, Makarios, orchestrated by Greek Cypriot nationalists and Greek army officers stationed on the island the avowed aim of which was to unify Cyprus with Greece. A week later, Turkish troops invaded and occupied the northern part of the island.
Greek Cypriots living in the north fled to the south and Turkish Cypriots living in the south moved to the north. A small opening in the dividing wall appeared in 2003 when the Turks decided to allow Greek Cypriots to visit their homes and properties in the north. In the same year, a United Nationssponsored plan for the reunification of the island was put to the vote in both communities. Greek Cypriots overwhelmingly rejected it while Turkish Cypriots endorsed it by a large margin. The dispute remains unresolved and the country is still divided despite repeated efforts.
In 2004, Cyprus became a member of the European Union and, although officially it was the whole island that acceded, in practice the Acquis Communautaire could only be enforced in the area controlled by the internationally recognized (Greek Cypriot) government in the south. The accession was a momentous event and for many confirmed that Cyprus, much like Greece 23 years earlier, had finally achieved what it had always wanted to achieve-full recognition of its status as a European hence also "modern and civilized" society. It may have been travelling in the West, one could say, but not aimlessly and for nothing. The EU accession meant that it had finally arrived. But has it? It is certainly closer to Europe than it has even been, entangled in all sorts of institutions, legislation, bureaucratic networks, and the like. Yet, is closer ever close enough? 12 Can it ever be? I have suggested above that it cannot be if by "close enough" we mean identical. Europe needs non-Europe to be itself and its center needs a periphery if it is to be center.
The division between the European center and the periphery need not always be visible. Indeed, as we shall see shortly, because it is more often than not invisible, some mistakenly assume that it does not exist. But this is an illusion. As Durkheim rightly pointed out long ago, we feel the force of social facts only when we run up against them. The recent financial crisis constitutes a prime example of this. Most peripheral European societies crashed against the wall of this divide and were badly bruised, more so than anyone else perhaps Cyprus. Unlike other peripheral, liminal countries collectively and only half jokingly known as PIGS-Portugal, Italy, Greece and Spain-or PIIGS with the addition of Ireland in the mix, Cyprus is far too small to matter. It could therefore be punished and made an example of for others to heed without danger. Here is how the Guardian put the matter: Never before have bank account holders seen their savings raided to help finance a bailout …. Never before has Germany appeared so determined to make example of a Eurozone country, all the way to the euro exit, unless it does what it is told …. It is the Eurozone's fifth bailout in three years. But this time it is different. Since the beginning of the year, Berlin has been insisting that Cyprus is not "systemic", in other words that a Cypriot crash could be contained, with minimal impact on the rest of the Eurozone. 13 We shall examine the moral economy of this punishment in due course. For the moment, I turn to the story of the "haircut" itself.

THE "HAIRCUT"
In the summer of 2012, it became apparent that the second largest Cypriot bank, Laiki Bank, which had been nationalized due to liquidity problems, required an extra €1.8 billion in recapitalization to remain solvent. Much like the other major Cypriot bank, the Bank of Cyprus, it had invested heavily in Greek government bonds and had lost large amounts of money. By this time the international credit agencies had downgraded Cyprus' rating to junk status, which meant that the money required could not be raised directly from the money markets. The Cypriot government therefore had no option but to ask the EU for financial assistance. Negotiations with the so-called Troika (European Commission, European Central Bank, and the International Monetary Fund) begun in earnest but dragged on largely because the communist government at the time had hopes of securing another loan from Russia, as it had done two years earlier, hence avoiding the harsh conditions that the Troika was expected to impose.
In February 2013, there were elections in Cyprus and the new conservative government sought to speed up the negotiations. The expectation was that the Troika would be more positively inclined towards the country and its financial problems because, unlike the communists, the new government was clearly pro-European and pro-western and the new president, Anastassiades, maintained friendly relations with the leaders of major European countries, notably the German Chancellor, Angela Merkel. By this time, the amount of money needed to recapitalize the banks rose considerably. What is more, the new government as well as those who expected preferential treatment were in for a nasty surprise. At a meeting of the finance ministers of the Eurozone countries in Brussels, it was decided-under the guidance of the German finance minister and the strong support of the French, the Dutch, and the Finns-that any bail-out loan-now estimated in the region €10 billion-would have to be combined with a bail-in, meaning that a large part of the Cypriot banks' recapitalization would have to come from their customers' deposits. The Troika called this euphemistically a "tax," a one-off charge to help the banks stay afloat, but its significance was not lost on anyone. Without the depositors' trust, there can be no banks, and it was clear that in the case of Cyprus this trust was tested to the limit. The Cypriot delegation and the president, in particular, resisted the proposal because, as they rightly pointed out, it was bound to destroy the country's banking sector. Negotiations dragged into the night and finally, under extreme pressure, the president relented and accepted the package.
The deal was subject to ratification by the Cypriot parliament, which rejected it thus forcing the president to renegotiate. Under the new agreement, only deposits over €100,000 would be taxed. As it turned out, after months of calculations and negotiations, the rate came to almost 50% of all deposits over the 100,000 mark. The new packaged included the following: the closure of the second largest bank; the implementation of anti-moneylaundering measures; fiscal consolidation to bring down the government budget deficit; structural reforms, primarily in the public sector; and an extensive privatization program. I shall not be concerned here with these measures. I will focus exclusively on the bail-in and explore in turn how EU officials justified it as well as the counterarguments put forward by the Cypriot side.
Before I turn to these arguments however, it may useful to refer briefly to how Turkish Cypriots received the news and reacted to this state of affairs. As I have already mentioned, although Greek Cypriots voted against the UN unification plan for Cyprus in 2003 and Turkish Cypriots for it, it was the former who became part of the EU in 2004 not the latter. Understandably, Turkish Cypriots felt betrayed by Europe and many resented the prosperity of the south, which was seen as being partly the outcome of joining the EU. It should not come as a surprise, therefore, that the news of the "haircut" was received with glee by Turkish Cypriot nationalist circles. As far as they were concerned, the "haircut" was a punishment that Greek Cypriots thoroughly deserved. For many others, however, who had jobs in the south or depended on Greek Cypriot clientele, such as the Turkish Cypriot casinos in the north, the crisis looked more ominous. For still others, it presented a unique opportunity for the reunification of the island. Some reasoned that a poorer Greek Cypriot side would be more willing to compromise. Others thought it was possible that Greek Cypriots would be tempted to presell part of the gas reserves recently discovered off the south coast of the island. As these reserves belonged equally to Turkish Cypriots, it would force Greek Cypriots to negotiate with Turkish Cypriots including perhaps an overall agreement for the settlement of the Cyprus problems itself. In the end, there was no need to presell any gas but there is little doubt that the woes of the Greek Cypriot economy affected the Turkish Cypriots as well. Many working in the south, mainly in the construction industry, lost their jobs as this sector of the economy was particularly badly hit by the crisis.
But to return to how EU officials presented the package of measures imposed on the Greek Cypriot economy, let me first turn to the statement made by Jörg Asmussen, a member of the executive committee of the European Central Bank, at the Economic and Monetary Affairs Committee of the European Parliament: In the 2000s, the Cypriot economy evolved towards a rather unbalanced business model with an inordinate weight for the financial industry. The country aimed to become leading provider [sic] of banking services. Cypriot banks attracted large inflows of foreign deposits …. The overall banking system represented more than 700% of the GDP … An active use of the relevant policy tools could-and indeed should-have curbed these unsustainable developments. But prudential supervision was too weak and did not prevent the build-up of large financial sector imbalances [emphases added]. 14 I have highlighted the terms "active," "prudential," and "weak" because I wish to revisit them. For the moment let us turn to the German finance minister and a more blunt statement made just before the second Eurozone meeting in March. "The banking sector in Cyprus simply has no future in its current form. Everyone in the Euro-group agreed on this. The Cypriots' hope they could continue like this, attracting capital with low taxes and lax regulation and then others should pay for it when the model doesn't work any more-this is unfortunately an illusion and the ones in charge should explain this to their population." 15 There is a new element in this statement-lax regulation. While Asmussen simply said that the Cypriot "business model" was unbalanced and unsustainable because the banks were allowed to become too big for the size of the country, the German finance minister adds here that the banks became so big with money whose provenance was not properly checked. What he meant, of course, was money laundering, a widespread and persistent accusation among certain Eurozone countries, and, as we have seen, the target of one of the conditions of the Troika-the obligation imposed on the Cypriot government to allow independent auditors to carry out an investigation of banking practices in the country. Finally, let us note here the French finance minister's description of Cyprus as a "casino economy," an expression worthy of further comment, since there are no casinos in the south of the island and could not have meant "an economy based on casinos." It would be interesting then, to speculate on what the French finance minister meant.
The Cypriot counterargument was that the "business model" adopted by Cyprus and deemed unsustainable by the Troika was the very same model adopted by many other small countries, including European countries. Here is Christopher Pissarides, former London School of Economics Professor of Economics, Nobel Prize winner and currently Professor at the University of Cyprus and adviser to the President of Cyprus: The trouble, according to the troika, … is that this [the measures taken by the Cypriot government after the Turkish invasion of 1974] also brought large amounts of large deposits to Cyprus, blowing up the banking sector to "unsustainable" dimensions. Deposits are about eight times the gross national product. This figure, however, is still smaller than Luxembourg's and not too different from that of Malta and Ireland. 16 Moreover, as others pointed out, "the Cypriot business model is not something that they all discovered just now ['they,' meaning those who argued that it was unsustainable]. In a so-called convergence report dated 2007, one year before Cyprus joint the Eurozone, the ECB mentioned the large influx of capital" 17 -not disapprovingly, one presumes. As for the claim made by, among many others, the German finance minister, namely, that Cypriots could not expect others to come and pay for their failures, the Cypriot response was threefold: Firstly, it was pointed out that the EU and the Eurozone were built on the idea of solidarity among the member states. Cypriots were not shown this solidarity. To put the matter the way the German finance minister put it was to make a travesty of this idea. Secondly, this was not how other countries were rescued. Ireland and Spain, for example, faced similar problems to Cyprus and required a far larger amount of money to recapitalize their banks but no bail-in was imposed. Finally, the financial assistance given to Cyprus (as well as to the other countries "rescued") was not a gift. It was a loan expected to be fully repaid with interest.
There is finally the question of the money-laundering accusations. From the very beginning of the crisis, the Cypriot government responded to these allegations by pointing out that it had enacted strict anti-money-laundering regulations, ratifying international conventions and harmonizing domestic legislation with EU directives. But doubts continued to exist, particularly with regard to the implementation of these regulations and, as we have seen, the Cyprus government agreed to the Troika's demand for an independent audit. The report of this audit showed that, although there was room for improvement, the situation was not as bad as it had been presented. Indeed, as it turned out, the situation in Cyprus was far better than in the country that above any other had been accusing it of money laundering-Germany. The Cypriot press published reports of a Swiss nongovernmental organization (NGO), the Basel Institute on Governance, which showed that Cyprus was much lower than Germany on the list of money-laundering countries.
In the end, Cypriots explained the haircut in a rather predictable wayin terms of narrowly conceived economic interests and the power to impose one's will to serve those interests. Here is Pissarides again: "Cyprus finds that not all nations are equal. The interests of the Eurozone's large nations come first, says Christopher Pissarides." 18 This is the heading that the Financial Times used to introduce Pissarides's article already referred to and the essence of his argument. There are two problems with this way of understanding things, however. The first is the question of the interest of the large countries, and the second the "discovery" that European nations are not equal. To begin with, it is not clear how the interests of the large Eurozone countries such as Germany are served through the downsizing of the Cypriot banking sector. That some of the foreign money in Cypriot banks could move to these countries is quite possible. But it would be absurd to claim that this was the motive behind the German and French demands as the amount of money was far too small to have any impact on such large economies. Secondly, it is hard to believe that Cyprus or Pissarides speaking to the Financial Times on its behalf had only just now, in the midst of the crisis, found out that not all nations are equal. Everyone knows this and knows it quite well. Some nations in the EU-those of the northwest-are more equal than others-the eastern European nations, for example, and certainly the nations of southern Europe.
Take a country like Spain, a member of the stigmatized PIGS or PIIGS group. As Marion Fourcade argues in a discussion of the moral categories in the financial crisis, "the moral sinkhole has fuelled centrifugal tendencies as people and governments have been striving to distance themselves from those countries not (really) like them. Spain's desperate efforts to avoid a European stability mechanism/IMF program is all about the stigma of being lumped together in the same category as Greece." 19 Spain, it seems, did not wish to be part of the PIGS and to share in whatever comfort there might be in knowing that "we" are not the only ones. It knows full well that there is no equality in the union and wishes to be regarded as part of the more equal countries rather than the less equal. All southern and eastern European countries know this. This is the main, if not the only, reason they sought to become members of the EU to begin with. This is also why, with some exceptions perhaps, they are its most enthusiastic supporters. They wished to be among the "superior" countries at the center of the world, the very definition of what it means to be "modern and civilized." And let us be clear that it is not with economic equality we are concerned here. It is what it signifies-moral or, as anthropologists say, cultural equality. This is the core working hypothesis of this article: The economic is never divorced from the moral and the cultural, and the attempts of the Troika to present their "rescue" packages of southern European countries as the embodiment of economic rationality notwithstanding.
How then is the Cypriot "haircut" to be understood? There is no doubt that Cypriots have been punished for something and made an example of for other Eurozone countries to heed. But this punishment would be more fruitfully understood not within the context of taking-that is, serving narrowly conceived economic interests-but rather in the context of giving-giving light, therefore enlightening, those who are supposed not to have it and do not see clearly enough. This, let us remind ourselves, was the very rationale of the colonial enterprise and, although this enterprise has long ended, it would be a grave mistake to assume that imperialism itself has ended with it or that it is meant only for non-European countries. It is alive and well and in tune with the times-a "postmodern imperialism," as it has been called by a leading light 20 -both within and without. My claim then is that Cyprus has been punished and made an example for others to heed because in the eyes of countries like Germany and France it had not learned what it was supposed to know, namely, how to think and act as a proper, modern European society. The punishment was largely a civilizational lesson.

THE MORAL ECONOMY
In an article on the crisis and its moral aspects, Fourcade captures quite graphically the civilizational aspects of the financial assistance that countries receive in times of crisis from international bodies such as the IMF, and I will quote her here at some length. The assistance is "conditional," a "mix of coercion and training," she says. As such: It is a deeply corrective mechanism with inescapable moral effects. Aimed at governments, programmes have an unmistakable civilizational purpose-…to train, educate and profoundly reform those societies whose poor performance has exposed them as inadequate, insufficient, incompetent and shackled by outdated institutions inimical to the flourishing of capitalism. Experts … have their own vocabulary to designate the typical flaws: rampant "corruption", low "state capacity", poor "governance", "rigidities" of all sorts and "inefficient" policies. 21 It should not come as a surprise that this was also the terminology used by the "experts" to describe the Cypriot case. Here is a quote from the Guardian again.
Angela Merkel, the German chancellor, takes the view that the Cypriot financial and economic model is rotten to the core, needs vital overhauling if it is to be saved and that Germany is not going to send its taxpayers' money to secure the low-tax, high-risk investments of Russian squillionaires dominating the bloated Cypriot financial sector [emphases added]. 22 Let us also remind ourselves here how Asmussen describes the Cypriot economy in his address to the Economic and Monetary Affairs Committee of the European Parliament. Asmussen says that, although the Cypriot government had at its disposal all the relevant policy tools to curb the "unsustainable" development of the banking sector, it did not make "active" use of them; although there was some kind of supervision of the banks, this was "too weak." In effect, he says what Fourcade says that the experts say about countries in such cases-limited "state capacity," poor "governance," and the like. In fact, he is saying far more than that or, at any rate, he is saying things that point to historical connections between economy and culture as well as culture and power. It is prudential supervision that was "too weak" in Cyprus, Asmussen says. This term-prudential-is not at all innocent. It carries tremendous cultural baggage that we need to investigate.
Prudence comes from the Latin prudentia, which is a contraction of providentia, meaning foresight. The Oxford dictionary defines prudence as being sensible and careful when you make judgements and decisions, in effect avoiding unnecessary risks. 23 However, a better definition is that of the Merriam-Webster dictionary-prudence: the ability to govern and discipline oneself by the use of reason. 24 This definition is better for two reasons. Firstly, it explains why people lack foresight and are not being careful and sensible when they make judgements and decisions, in short, why they take unnecessary risks. It is because their reason cannot control and discipline their desires and passions-this being the stereotype of Mediterranean people as warm blooded and impulsive. The Merriam-Webster definition is better than the Oxford definition also because it allows us to see the cultural baggage that the term carries with it as well as to make historical connections. This tenet-the ability to govern and discipline oneself by using one's reason-is the criterion used to make and justify a whole host of divisions. This is how European men saw themselves over the last few centuries-as being in possession of the ability to master nature within-the archetype being perhaps the Victorian male. It is how European men legitimized divisions and power relations within-patriarchy, for example-as much as divisions and power relations without-I am thinking here of the colonial enterprise itself. The image of the natives in the colonial literature as being innocent like children who do not know any better and cannot be allowed to run their own lives without instruction and close supervision is well known to anthropologists to require elaboration here.
I am not suggesting of course that in using the term "prudential" Rasmussen meant to say that Cypriots could not use their reason to discipline themselves and to control their desires. For all we know, he may not even have written the speech himself. Yet, it is not personal intention that counts here but cultural history inscribed in language. In this sense, the civilizing, modernizing, Europeanizing implications of what has been said are unmistakable. Cypriots should have known better than to allow their banking sector to grow to eight times the gross national product (GNP). They should have been able to foresee the danger and to realize that they were taking an unacceptable risk. But perhaps, being a Mediterranean people, they became too enthusiastic about turning their country into a center for international banking and were carried away by the excitement. Taking unacceptable risks is also what the French finance minister may have meant in describing Cyprus as a "casino economy." Gambling means placing your faith for gain in nothing more than blind fate. This apparently is the reverse of economic rationality.
Let us finally turn to the question of the interests of the big countries, which as Pissarides says always come first. We have already noted that it is not inaccurate to say this. What is problematic, rather, is the assumption, firstly, that these interests are always material and, secondly, that they are always served by taking, as Pissarides implies in the case of Germany versus Cyprus. If the big countries can destroy the banking sector of small countries like Cyprus, their financial industries have much to gain. Let us remind ourselves that this is exactly what happened many times over during the colonial era, for example, Britain destroying India's textile industry in order to promote its own. Yet, colonial and imperialist thinking in general demonstrate also that the best way to serve one's interests is not by taking but, paradoxically, by giving. This is so because, as Derrida argues so compellingly in his analysis of Marcel Mauss's book on the gift, giving is taking with a certain capitalization or interest. 25 This is not because the gift is repaid by the countergift of the recipient. The interest is virtually instantaneous. As soon as one thinks about making a gift to someone else, one is instantly repaid with interest. The return is not anything material but it is a profit nonetheless, for example, the pleasure in knowing that one's gift will make someone else happy or in knowing that one is doing the right thing. Serving one's interests is not something that one can avoid. If there were no interest to be gained in giving a gift, there would be no interest in giving it.
Elsewhere, I reflected on this paradox of taking by means of giving with the help of Kipling's famous poem "The White Man's Burden." 26 As the poem says, the white man shouldered this burden-sent his "sons to exile," asked them to "wait in heavy harness" and to "seek another's profit" and so on-knowing too well through experience that the only reward he will ever receive from the natives is "the blame of those ye better, the hate of those ye guard." 27 The white man gives the light of civilization to the rest of the world and receives nothing in return or worse, blame and hatred. He sacrifices himself for nothing and insists on continuing to do so. Is the white man a saint or a fool? He is neither of course. It really does not matter that he receives no countergift from the natives, say, gratitude. He has already been repaid with an interest. He has done the most "profitable" thing-givingand reaped the most "valuable reward," as Winston Churchill once put it: What enterprise that an enlightened community may attempt is more noble and more profitable than the reclamation from barbarism of fertile regions and large populations? To give peace to warring tribes, to administer justice where all was violence, to strike the chains off the slave, to draw the richness from the soil, to plant the earliest seeds of commerce and learning, to increase in whole peoples their capacities for pleasure and diminish their chances for pain-what more beautiful ideal or more valuable reward can inspire human effort [emphases added]? 28 The most valuable reward is precisely the confirmation of the "enlightened community" as such a community-enlightened, civilized, and, of course, superior to the "barbarian populations" to which it gives. I believe this is the context in which we should place and try to understand Germany's determination to punish Cyprus and to make it an example for other countries in the south and the east to heed-a neocolonial or postmodern imperialist context. Germany punished Cyprus not out of vindictiveness but for the island's own good, not to serve its economic interests but to discipline and teach Cyprus a lesson-a civilizational lesson. Can there be anything more profitable? NOTES