@ Ghost of Truth
2025-03-13 12:57:19
EU Investment Fund: The March into Socialism
Totalitarianism is characterized by the elimination of individual freedoms and the growth of the state into an entity with virtually unlimited internal power. The European Union’s plan to secure the financing of its expanding central state and arms sector by tapping into citizens’ savings unequivocally points in this direction.
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It was just a year ago when former European Central Bank President Mario Draghi presented an investment plan intended to steer the EU—a ship languishing in the stagnant waters of recession—back onto the high seas. The Italian proposed a hefty 800 billion euros, which the Brussels central body would take control of to escape the productivity and growth trap through investments in Europe’s ailing infrastructure, technology hubs, and energy grid. This immense sum was to be managed through the EU’s established investment arms: the European Investment Bank, cohesion funds, and national and regional dependencies like Germany’s Kreditanstalt für Wiederaufbau. As has often been the case in the past, a cloak of silence fell over Draghi’s latest attempt at a centralized breakthrough, and his polished “Whatever it Takes” vanished amid the media waves of the Ukraine war, Russia sanctions, and sanctimonious Trump-bashing, relegated to the drawers of Brussels’ thousand-layered bureaucracy.
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Now, ironically, it is Germany—the fiscal taskmaster that, during the recent debt crisis, ruthlessly drilled its southern European partners, particularly Greece, into submission with its austerity whip, driving them to despair and thrift—that has dusted off Draghi’s plan and brought it back to the table. Though the focus has shifted—now centered on Germany’s rearmament in the face of Putin-mania and the buildup of a European arms sector—the principle remains unchanged: the central state entity secures financing through new debt, stimulates aggregate demand, and leads the old continent to an Eden of growth and gleaming prosperity. So goes the theory. In practice, of course, things look very different, veering miles away from the bureaucrats’ sunny boulevard into the swampy forests of rising national debt and the progressive crowding out of the private sector. This state gigantomania threatens to drain liquidity from the free capital market and drive up interest rates—a trend already materializing in the sell-off of European government bonds in the days following the debt program’s announcement. German 10-year bonds shot up by 40 basis points within two days, setting the tone. The market appears saturated, and Europeans are finding it increasingly difficult to place new debt.
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At this moment of geopolitical shift, as the Americans gradually withdraw from European affairs like the Ukraine war, creativity is required when economic options run dry. And they are creative in Brussels when it comes to geopolitical power plays and expanding the EU’s debt scheme. After all, the goal is not just to roll over the enormous existing debts of the Union’s member states, regions, municipalities, social security systems, and state funds into the future. The growing central apparatus in Brussels, fueled by the long-discredited Keynesian thesis of economic policy and the necessity of state intervention, is increasingly absorbing the productive forces of the private sector. We currently stand at the end of a decade in the EU with no significant productivity growth—an abysmal report card for EU economic policy in light of technological progress. Grade: F! The European economy, burdened by bureaucracy and regulation, can no longer translate the macro-impulses of robotics or AI into business models or align economic processes with international standards. Here’s a figure: last year, the German economy lost 136 billion euros in direct investments, much of which left the Eurozone. Once invested elsewhere, that capital won’t return anytime soon.
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Back to the creative masterpiece of the Euro-acrobats in Brussels, who have long been racking their brains over how to finance their Brussels behemoth in the future. Citizens’ cash assets are to be the solution, says Ursula von der Leyen, President of the European Commission. Trillions of euros are lying unused and idle in European citizens’ accounts, and these must now be activated, according to the CDU politician. Respect for individual autonomy and sovereignty? Nowhere to be found! The EU is ruled by collective coercion, a naive belief in the omnipotence of state regulators, and a firm resolve to transfer private capital formation—soon with digital central bank money—into the hands of the state. The initiators of this assault on our sovereignty estimate the total volume of European cash deposits at 10 trillion euros—a hefty sum to underpin a potential new investment fund with the necessary collateral and stabilize it with the creditworthiness of European taxpayers. Leading the charge and legally responsible would be the European Commission (surprise, surprise), which, if this audacious stunt succeeds, would gain an enormous boost in power. Simultaneously, the long-delayed Capital Markets Union is set to be implemented, which, alongside deeper harmonization of the European banking sector, would primarily regulate the preparatory legal steps for joint debt issuance. Because that was the goal from the start: the establishment of a European Debt Union, leveraging Germany’s still-solid credit rating to refinance and expand the EU project. The American withdrawal comes at just the right time, providing the argumentative framework to hollow out the Maastricht criteria, which until now precluded collective debt. Times have changed!
Active management is expected to be entrusted to the European Investment Bank—an institution with extensive experience in centrally controlled fund distribution within the EU. It serves as both the Brussels central planners’ “watering can” and is ready to step into the game. Cash deposits, low-interest money market products, or pension fund assets are to be tapped. The plan is to lure citizens with a savings scheme offering interest and a fixed return promise. Once the fund is filled, it will serve as the basis for bond issuances, providing valuable leverage for the initial capital. The European Central Bank would then have the honorable task of keeping these bonds liquid—a fate likely similar to that of the EU’s “SURE” bonds introduced during the COVID lockdowns. These first-of-their-kind joint debt securities are trading stably at 40 percent below par, with no volume—the market says “Nyet” to this kind of debt acceleration. At the core of the investments is the financing of military technology—drones, tanks, cybersecurity—and the buildup of the general production infrastructure for a European military sector.
This, then, is the path Brussels is now taking. Naturally, small and medium-sized enterprises are not to be left out of this investment offensive, according to Brussels. Of course not—after all, it’s precisely these small businesses that dominate the arms sector. How do we know? From the American military-industrial complex, which serves as a model for Europeans and is dominated by classic mid-sized firms like Lockheed Martin or RTX.
#eu #ecb #europe #socialism #trump #usa #bitcoin #nostr #grownostr