The finance sector was Cyprus' number one income earner. But it was not its number one employer, by a long way. Bill Mitchell found the employment data from its Ministry of Finance, which was as follows:
The most recent detailed labour force statistics available from Cyprus are the – Labour Statistics 2011 – publication.
The following Table shows the proportions of employment by main industry sector in relation to total employment (WRT is wholesale and retail trade).
As the FT notes this morning, the impact on all other sectors of the banking crash has already begun. Having been a tax haven will prove to be a disaster fro the people of Cyprus. With all other economic activity squeezed into the background by an over-expanded finance sector the ripple effect will be enormous.
Sometime soon small states are going to realise that being a tax haven and putting all eggs into one highly volatile market really does not pay.
‘Sometime soon small states are going to realise that being a tax haven and putting all eggs into one highly volatile market really does not pay.’
For the vast majority of people who live in pretty much any part of the UK outside London and the South East the same could be said of a rather less small state, Richard. And for the vast majority of disabled and unemployed, and one million young people (and counting) that applies wherever you are. We might not be able to classify the UK as a tax haven (yet), but we are damn sure paying the price for the behaviour of our banks and financial sector – who, it might be worth reminding ourselves, remain almost totally unpunished. And we will be for very many a long year to come.
TJN is going to be doing a lot more on this very soon…
Unfortunately Ivan, you are correct. And when you have a political establishment that, despite everything, is still mostly in thrall to the City, and is pushing through an austerity program to (alledgedly) solve a deficit caued by the cost of bailing out City based banks, you have to wonder how different from somewhere like Cyprus we are.