The German Parliament and European Union officials are refusing to support Cyprus’s bailout unless the country submits to further conditions. They’re accusing Cypriot banks of making dodgy deals with shady Russian businessmen, and they want this to stop.

Shortly before the end of last year, Cypriot President Demetris Christofias announced, with “heartfelt pain,” that Cyprus would seek a bailout from the EU. He said that terms had been agreed “in principle.” Spiegel Online wrote that the deal means that Cyprus “will effectively lose its sovereignty.” The “troika”—the European Commission, the European Central Bank (ecb) and the International Monetary Fund (imf)—“will essentially take control of the Mediterranean island,” it wrote.

Now we’re seeing that in action. Germany’s parliament is refusing to give Cyprus the money unless it changes its banking system and cracks down on money laundering.

A report by Germany’s intelligence service, the bnd, that was leaked last November accused Cyprus of creating the perfect conditions for money laundering. It also said the country was giving Russian oligarchs Cypriot passports that allow them to live anywhere in the EU.

Germany’s politicians don’t want German bailout money helping Russian businessmen. The Social Democrats (spd) and the Green Party are threatening to oppose the bailouts. “As things currently stand, I can’t imagine German taxpayers bailing out Cypriot banks, whose business model depends on abetting tax fraud,” the spd’s chairman, Sigmar Gabriel, said.

Without these politicians’ support, German Chancellor Angela Merkel may not be able to get the bailout through parliament. She doesn’t have the complete support of her own conservative coalition. Chancellor Merkel herself still wants more from Cyprus. President Christofias doesn’t want Europe to force him to privatize government-owned business, but Merkel insists that “There can be no special conditions for Cyprus.”

EU financial affairs commissioner Olli Rehn said the spd will probably get its way. In an interview published by Handelsblatt on January 11, he said Cyprus has accepted international rules on money laundering. But “these laws actually have to be applied,” he said. “I am aware of the problems.”

“I believe we can address the concerns of the spd,” Rehn said, adding that he was sure Cyprus could be made to comply.

From the German taxpayers’ point of view, these demands are reasonable. They’re not concerned about buying Cyprus’s surrender. They’re begrudgingly bailing them out, and they don’t want to waste their money.

But as Cyprus is forced to bow to these new demands, it shows that Cypriots have handed over control of their country to Germany.

When Greece’s bailout was approved, the Greeks weren’t just handed a lump sum of money and told to fix their problems. There are explicit conditions they must obey—and the bailout money is given in installments. Each installment is an opportunity for Germany to threaten to withhold the money.

And Greece didn’t need just one bailout.

Now Greece’s unemployment is above 25 percent. It could be forced to turn to Germany again to help contain rising unrest and violence.

Cyprus is starting down the same road. It must obey Germany’s parliament to receive the bailout, and will have to submit to Germany’s conditions to receive each installment of the money.

The banking reforms will also cut Cyprus off from the only other power that might step in and rescue it: Russia.

Russia also has a lot of interest in the island. But if Germany cuts Cyprus and its banks off from Russian money, Russian influence will greatly decline. Europe is getting rid of a rival for Cypriot loyalty. It doesn’t want to bail out the Cypriots only to have them turn to Russia if it offers a better deal later. Europe wants to make sure that once Cyprus has surrendered to Germany, it stays surrendered.

This time, the condition is that Cyprus reform its banking system. What will it be next time? That German taxpayers get something back from their investment—in the form of a German naval base on Cyprus, or direct German access to Cypriot radar facilities?

Cyprus is a key location to project power into the Middle East. If you haven’t already, watch Trumpet editor in chief Gerald Flurry’s video “Cyprus Surrenders to Germany” for more on the vital background to this story.