by Jason Moore

T HE party is over and Cyprus has been forced to pay. The European Central Bank has blasted a clear warning to the struggling southern European states; there is no gain without pain. In other words the days of the European Union coming to the rescue with an open cheque book have finished; if you want a bailout you have got to pay as well. Cyprus is a small country but it is being used as an example. The tax on savings as a condition for the bailout is not really a bad idea. It does punish savers but the money has to be raised from somewhere. Two years ago there were few strings attached to European bailouts. You got the money in return for making some savings. But now you get a bailout but the cost can be high. The Germans have been accused of bullying the rest of Europe. This is not the case. The Germans are becoming rather bored of having to bailout the rest of Europe and I can see their point. Germany does not have an endless supply of cash to spend on struggling European states. Helping out a neighbour is one thing but supporting the whole neighbourhood is another. Spain has so far not asked for a European bailout although its banks did receive money from the European Central Bank. I am not surprised that Prime Minister Mariano Rajoy has thought twice about asking Brussels for cash; these days aid packages come with many strings. Cyprus has been made an example but are the other southern European states watching?