The EU never enforced its Growth and Stability Pact or Maastricht Treaty rules. The crisis is coming to a head with France and Italy in the spotlight. The first casualty will be Green policy.
Compliance Rules
- Deficit rule: a country is compliant if (i) the budget balance of general government is equal or larger than -3% of GDP or, (ii) in case the -3% of GDP threshold is breached, the deviation remains small (max 0.5% of GDP) and limited to one year.
- Debt rule: a country is compliant if the general government debt-to-GDP ratio is below 60% of GDP or if the excess above 60% of GDP has been declining by 1/20 on average over the past three years.
- Structural balance rule: a country is compliant if (i) the structural budget balance of general government is at or above the medium-term objective (MTO) or, (ii) in case the MTO has not been reached yet, the annual improvement of the structural balance is equal or higher than 0.5% of GDP, or the remaining distance to the MTO is smaller than 0.5% of GDP.
- Expenditure rule: a country is complaint if the annual rate of growth of primary government expenditure, net of discretionary revenue measures and one-offs, is at or below the 10-year average of the nominal rate of potential output growth minus the convergence margin necessary to ensure an adjustment of the structural budget deficit in line with the structural balance rule.
Deficit Disaster Zones
France and Italy are major disasters right now on the budget deficit rule. France has a budget deficit of 7 percent and Italy 5 percent.
France needs to reduce its deficit by a whopping 4 percent of GDP!
Neither Italy nor Greece should have been allowed in the EMU (European Monetary Union – Eurozone) in the first place.
Greece has a debt-to-GDP ratio of 170 percent. The target is 60 percent.
But the lead chart tells the picture. Only the Scandinavian countries are in compliance.
Looser Rules Postpone the Crisis
On February 10, the EU agreed to Looser Fiscal Rules to Cut Debt, Boost Investments.
The latest revamp of two-decades-old rules known as the Stability and Growth Pact came after some EU countries racked up record high debt as they increased spending to help their economies recover from the pandemic, and as the bloc announced ambitious green, industrial and defense goals.
The revised rules allow countries with excessive borrowing to reduce their debt on average by 1% per year if it is above 90% of gross domestic product (GDP), and by 0.5% per year on average if the debt pile is between 60% and 90% of GDP.
Countries with a deficit above 3% of GDP are required to halve this to 1.5% during periods of growth, creating a safety buffer for tough times ahead.
Defense spending will be taken into account when the Commission assesses a country’s high deficit, a consideration triggered by Russia’s invasion of Ukraine.
The new rules give countries seven years, up from four previously, to cut debt and deficit starting from 2025.
Note that the EU can tweak enforcement but not the baseline Stability and Growth Pact targets themselves without unanimous agreement, and a new treaty.
With that background, let’s look ahead to the crisis that looms as described by Eurointelligence.
Europe’s Next Financial Crisis
We would like to alert our readers to a theme that has been preoccupying us for a while – the possibility of another financial crisis in Europe. We have generally been restrained in our warning of financial crises. The main exception was the global financial crisis and its cousin, the euro area’s sovereign debt crisis. Fifteen or so years later, we see another financial crisis ahead here in Europe: a crisis of the European social and political model with deep consequences for fiscal and financial stability.
The canary in the coalmine is the overshooting budget deficits in France and Italy, at over 7% and over 5% for 2024 respectively. These numbers are a symptom, not a cause. Behind them lies a lack of economic growth needed to sustain Europe’s social model. Germany’s fiscal policy could not be more different than that of France or Italy, and yet Germany is afflicted by the exact same problem.
The European model was powered by oligopolistic industrial companies, which were heavily supported by the state through regulation that tilted the level-playing field in their favor. The German car industry is a classic example, but everybody did this.
What is killing this model now is a shift in technology and geopolitical fragmentation. Of the two, we would argue the first is the more important. More and more functions in our lives that were previously the realm of purely mechanical processes are nowadays wholly or partially digitalized. Barriers of entry have collapsed. China went from zero to the world leader in electric cars.
European companies no longer generate sufficient profits to fuel the social model – and to fund long-term research. It is no surprise that Europe has only very few tech companies. In short, Europe’s oligopolistic old-tech model no longer works in a digital world. We have been reporting on the attempts by the EU to stem against technological developments through regulation. But this is a way of addressing symptoms, not causes.
After the multiple global shocks of this decade, the consequences of Europe’s technological decline translate into lower potential growth rates. Italy came first. Its productivity growth has been near zero since it joined the euro. The UK’s productivity growth slumped after the global financial crisis, and never recovered since. Germany’s productivity growth is unlikely to recover, even if the economic cycle does. The German Council of Economic Experts see a potential growth of around 0.5% until the end of the decade. With productivity growth that low, Europe’s model has become financially unsustainable. It is unsurprising that the political system is fragmenting everywhere. The argument for sustained deficits, in France for example, is that you need them to keep Marine Le Pen out of power. This means they will persist.
We have a fiscal crisis ahead, caused by a combination of falling productivity growth and political gridlock. Technology is the main cause of the decline. Geopolitics is what accelerated it. The solutions we have been advocating over the years – a joint fiscal capacity, a capital markets union, joint defense procurement to neutralize the rise in defense spending – are further away than ever. Unless one of these parameters change, a financial crisis is a very plausible scenario.
Spotlight France
France has a budget deficit of 7 percent but wants to fund a European army to fight Russia.
How is that supposed to work?
Spotlight Green Fantasies
The EU has adopted ambitious Green policies that will cost much more money than has been budgeted.
How is that supposed to work?
Targets Won’t Be Met
You can take those Green targets and throw then into the ashcan of ideas that never should have been set in the first place.
Even if you give France 7 years to be deficit compliant, how is France supposed to cut back a whopping 4 percent of GDP?
What’s the Basic Problem?
Eurointelligence says “Technology is the main cause of the decline. Geopolitics is what accelerated it.”
Technology is not the problem. The Maastricht treaty that created the Eurozone is flawed. And it cannot be fixed without unanimous agreement.
Given productivity and work rule differences, one interest rate set by the ECB cannot serve Italy, France, Greece, and Germany.
Add to that, EU nannycrat rules. The EU is more interested in cracking down on Google (Now Alphabet GOOG), Apple (AAPL), Facebook (now Meta Platforms META), and Microsoft (MSFT) for alleged monopolies than developing anything.
The EU Is Dysfunctional
In a single word, the EU is dysfunctional. That’s the problem, not technology. The Maastricht treaty itself is a big part of the reason the EU is dysfunctional. The Euro itself, with one common interest rate, is fundamentally flawed.
Companies like Alphabet, Meta, Microsoft, and Apple could not exist in the EU because in the name of competition and diversity, the EU would kill them before they ever got big enough to matter.
EU rules make it impossible to fix the basic problem. So the EU has resorted to nannycrat rules to regulate US and Chinese companies instead of fixing anything.
Technology, including AI, and geopolitics is now accelerating the basic problem, the EU is dysfunctional by treaty. It’s showing up in polls everywhere.
European Parliament Polls in France
Marine Le Pen’s National Rally is clobbering Renew/Modem by a whopping 12 percentage points, 30-18.
This chart is for France only, not the entire parliament, but it reflects on French President Emmanuel Macron’s sinking popularity and the sinking centrists in general.
A War Economy
As a way to create jobs, EC President Charles Michel promotes a war economy.
In a preposterous proposal to deal with growth, The European Council President Calls on Europe to Switch to a War Economy
I have a suggestion. Let US senator Lindsey Graham and EC president Charles Michel lead the charge.
Instead of fixing Germany’s aging infrastructure, attempting to compete with the US on AI, or competing with China on anything, EC President Charles Michel promotes war as growth.
It’s Time for a New Strategy
Please note German Chancellor Olaf Scholz is refusing to send Taurus cruise missiles to Ukraine.
On March 16, I commented Ukraine Won’t Win the War, It’s Time for a New Strategy
There’s Solidarity, Then There’s Solidarity
Poll after poll shows support for Ukraine. Every one of then is flawed because they fail to ask “how much are you willing to pay.”
There’s solidarity in the EU, but it stops with wheat and weapons. In the US, Biden is desperate for the war to go on. But he still has no goal. Is Biden’s goal the same as Zelensky’s: “The war will not be over as long as Crimea is occupied.”
We don’t know because Biden won’t say. Biden also will not say how much he is willing to commit. Is it another $150 billion or is it $1 trillion or more?
Meanwhile, prepare for carnage of the center, Greens, and warmongers in the next European Parliament elections.
A fiscal crisis awaits. The first casualty will be Green energy policies.
Thanks for the insight into Europe. My question is what would a financial crisis in Europe do to the usdeuro exchange. Would the euro go up or down relative to USD?
“Companies like Alphabet, Meta, Microsoft, and Apple could not exist in the EU because in the name of competition and diversity, the EU would kill them before they ever got big enough to matter.”
Is that for sure a bad thing? I don’t know but when at least 3 of 4 of those companies are working hand in hand with the state to do the bidding of the state, all constitutional norms cast aside.
When do you decide to slay the dragon?
Mike Sedlock, We would benefit from a US and Canada rendering of “what if” Compliance rules comparison.
Keep up the good work.
Let’s look at France.
France recently lost control of their de facto neo-colonial empire in Africa. The consequences of that loss are poorly understood.
It was not just the looting of cheap resources from Françafrique that benefited France. Far more important is (was) the control of the CFA currencies and foreign reserves by the French Central Bank.
This arrangement provide France with a nice collateral on the world’s capital markets. This African bonus is what helped to keep the social programs and the bloated bureaucracy of the French 5th Republic funded for decades.
Make no mistake. The French bureaucracy IS the French Fifth Republic, and arguably this has been the case going all the way back to Napoleonic times. Funding for the French state apparatus now has come from elsewhere or the house of cards collapses.
In a nutshell; The French Fifth Republic will soon be running out of funds to keep its state apparatus going. Reforming the state bureaucracy would be the beginning of the end as would a sharp increase in taxes. All great revolutions in history are debt and tax revolts.
Unless something drastically changes for the better the French Fifth Republic is doomed. And France will take down the entirety of the European architecture with it, if it falls.
The basic problems with the EU are they never consolidated the debt for political reasons, they believe is socialistic policies and one-world Govt, have unelected bureaucrats running the show, and are following the totalitarian directives of the WEF because they know they have no other path to keep their perks and power – EXACTLY LIKE THE US AND THE REST OF THE WEST.
This is why war is needed, along with CDBD’s, which will be ready for primetime in 1-2 years – link to reuters.com.
the EU is finished.
the bureaucracy & institutions are INCAPABLE of change.
that continent will literally crumble under their feet while they write agendas & re-schedule meetings.
Mike is of course correct. However the article would be even more interesting If Usa is compared after the same standards…..
“As a way to create jobs, EC President Charles Michel promotes a war economy.”
Last time around, that lead to some 40 million dead in Europe.The dead lost their jobs.
ZH top headline: CBO Director Warns Of Debt Market Meltdown With US Debt On “Unprecedented” Trajectory
Story behind a pay wall. It’s rather obvious that things are out of control, wherever one looks.
“Deficit Disaster Zones”
Money is created out of debt and debt is outpacing GDP. Is there a balanced budget anywhere?
“Looser Rules Postpone the Crisis”
The worse it gets, the looser the rules. The political insiders know what happens when the music stops. Torches and pitchforks.
The US is the biggest enemy of the EU, Big Tech in particular is spending a lot of money to promote capitalist anarchy and the regulatory, citizen-focused approach of the EU is a threat to the “move fast, break things” ideology of Silicon Valley. Europe should start thinking of its future cozying up to China and establishing friendly relations with Russia. NATO is the only culprit of the many refugee crisis Europe has had to deal with, the US is not your friend.
Of course the US is not your “friend.” In our dog-eat-dog world, no one is your “friend.” But China? Russia? They are definitely not Europe’s friends. Sure, they are happy to exploit Europe by doing business with it (on their terms). Continuing to outsource the EU’s manufacturing and energy needs to China and Russia may help in the short term, but it’s killing the EU in the long term. A return to domestic manufacturing and nuclear energy would help, massively. But this would mean Europe needs to stop outsourcing their CO2 needs. Pretending to cut carbon emissions by getting China to do the emitting for you is a dirty trick that may fool some of the voters., but it’s not helping the world, and it’s killing Europe’s economy.
Great analysis and great article. Thank you.
Expect a financial crisis in the USA with the GOP at the epicenter!
US need to change things soon, but Traitor-rump and his MAGA radicals are not the way to go. It will take a disciplined, and united Congress, to make the leap.
Look to the 2028 election cycle to see improvements. By then Traitor-rump will be still be in jail (and a number of his minions); maybe a new group of “real” representatives may become reality.
Buckle up – it will be a fun ride!
I tend to view the US election cycle as a world wrestling promo. Trump is the reality show star turned iconoclast, troll, buffoon and heel. Biden is the hot tempered, gaslighting face of the public-private partnership model and surveillance state bureaucracy.. the new star of the Dark Winter narrative.
The new group of “real” representatives will have to contend with the kleptocracy, the de-growthers and the weaponized justice system as well as a general public hooked on loaded talking points, meme posts and dopamine hits. Best bet is to focus on re-localization of food, economy and mutual aid networks to build resiliency and adapt to multiple shocks from the long emergency (hybrid war, color revolutions and biosecurity appartus) and the surplus energy, debt and complexity time bomb. We can do that without working together beyond political narratives.
You don’t have to tell British people that the EU is dysfunctional, and by god did they and their acolytes kick and scream in protest even after the vote… the illegal mass immigration from France is a punishment beating for British people for daring to leave the EU.
The EU has been broke for a long time, and corrupt too; but Europhiles and the media won’t have it.
Example risks include:
“Italian banking crisis”
“Spanish pensions crisis”
“French public sector funding crisis”
“Belgian waffle…”
The literal west of Europe is in serious economic and financial stress, and the straightjackets of rules and regulations on so many aspects of life look likely to lacerate the populace as they try to wrestle free of the crises they (were tricked into having) voted for.
On top of that you have ridiculous scenarios such as:
German Green Party in government opening lignite mining and demolishing land-based windfarms.
Irish “Sinn Fein” party that fought for an ethnic-Irish state, now saying that anyone can be Irish.
France proposing to put boots on the ground in foreign countries to fight, without paying NATO tax.
Inflation-ridden NATO member Turkey, hostile to US allies like Israel, Armenia, Cyprus and Greece.
The whole sitution is a complicated farce. Ultimately, “follow the money” seems to be the best idea.
All the intelligent Europeans fled to America long ago.
Sin Fein leader is a woman. I am beginning to question my impartiality as some women are smarter than men, but nature and averages might not lie. Lion males defend their territory, and protect the pride.
After defeating NAZI (National Socialists) in WWII Europe voted overwhelmingly for Communism/Socialism. Europe used military funds to finance the socialism and has no military defense. Europe built their socialist welfare paradise on the backs of the American taxpayers who paid to defend Europe. Americans are done paying for welfare parasites. Europe is on their own. Europe can learn to love their master Putin or they can cut welfare, raise an army, and fight. Peace on them.
I am trying to remember the last time Mish praised a country or region for their policies and I come up with a blank.
Man, you must have a short memory.
A month or so ago he was singing the praises of a certain Argentinian president being elected with followup articles on him actually implementing his policies.
That was one man and not a country or region.
Perhaps you can come up with your own list and tell us why it’s working. If not, shut up.
Switzerland, Denmark and Iceland are doing well
Fiscally, the euro area is in MUCH (using Trump spelling!] better shape than the US. What counts for the euro area in the end is the overall fiscal situation (as demonstrated by the 2010-11 fiscal crises in countries like Greece, Portugal, and Ireland). And that chart at the beginning of Mish’s article is pretty useless because it is based on averaging 1998-2023 & no country in this world outside Scandinavia wouldn’t look deep red based on the strict fiscal criteria applied (certainly the US would be deep red).
You are completely deluded and wrong, and you are ignorant of the true situation in Europe.
‘the EU is dysfunctional’ Absolutely Right ! In the meantime though its worthless dumbasses like Charles Michel and other UNelected parasitizing grifters are actually doing great with a great financial future guaranteed no matter what happens to the EU and its citizens ….With all the money gone, a already decaying democracy will become even more of an illusion ! Actually when you come to think of it, a war economy like proposed by stupid Michel or even better, an outright war with Russia might dis(solve) dramatic sovereign and other debt problems, with the unremitting propaganda brainwashed masses accepting the dire situation without any protests, then it is ALL Russia’s fault ! One hell of a great schemy scam that would be , wouldn’ t it ?
The EU committed economic suicide by ‘Russia Sanction’ – fully deserved when you are as stupid as Eurotrash liberals.
No need for energy, or food – just eat virtue signals, and run the economy on hoping.
Ergo, will Hungary (and others) jump ship? Hungary has clearly stated that they have no beef with Russia.
Hungary opened her door to Chinese investments, by not toeing the line. Now Chinese companies like CATL, and BYD prefer to set up shop in Hungary.
Victor Orban opened Chinese University in Budapest which seemed odd, but it is paying off.
Diversification of options.
Orban is putting Hungary first, and will take the money from anywhere to do that, but with caveats over how much control or influence a benefactor has. “Diversification of options” is very rational and pragmatic, but he needs to keep increasing the diversity.
The ‘economic suicide’ is page one, war is page 2. I hope we do not have to turn the page.
Then there is this:
European Energy Prices Increase up to 500% Compared to Pre-crisis Levels
link to greenmatch.co.uk
EU poverty whackamole… I mean you can’t tax people up to the eyeballs, suppress wage growth through price rises (driven by policies like sanctions, netzero, illegal mass immigration, lockdowns); and increase living costs as well… people are just going to break and wheel out the guillotines.
Can somebody explain me why energy is expensive while Natural gas price is almost all time low?
Sure. US natgas prices are down because of oversupply.
US natgas producers have been ramping production dramatically for the last few years for several reasons:
1. LNG exports. In just 7 years the US has grown to be the largest exporter of LNG in the world. We export 12 bcf per day out of production of 102 bcf. And we are expanding our export capacity to 18 bcf over the next few years. This was a green light for a big investment to expand production; which has happened. Lots of new natgas production has come on line as everyone is trying to fill this new export demand. All this is difficult to time. It’s easy to produce more than is needed.
2 Shale oil. The US has also become the biggest exporter of oil due to the shale oil fracking revolution of the last decade. Producers have an incentive to keep pumping this oil when prices are high. Natgas is a big byproduct of shale oil. Huge volumes are being added to overall supply. And as shale production continues, the wells often get “gassier” over time. So even more gas is added as time goes by.
3. Ukraine. The sanctions on Russia caused natgas prices to soar in 2022 and natgas producers profited. They also decided to pump everything they could, and expand production to meet expected demand.
4. Global warming. Gasp. Yes. That thing again. The US and Europe experienced two warm winters in a row which knocked demand down.
5. Lack of storage. Unlike oil, there is much less storage for natgas. So prices can drop quickly when demand drops, supply ramps, and storage is full. Which is where we are today.
6. Nagas producers have not throttled drilling or production as much as they should to support prices. This is the result of competition and in some cases, beggar thy neighbor strategies. (Think Saudi exporting like mad to try to crush shale oil a few years ago.) Some producers are hoping to hurt the competition and be a bigger beneficiary of future LNG sales. And then there is the need to not appear to “collude” on prices by mutually agreeing to reduce supply.
Hope that helps.
Look into the costs of shipping gas.
snellen Eddy …..zedde gij ne vlamink of wa ?
The world had forgotten the FACT that Crimea held a vote and 95% voted to stay with Russia! Obviously they are not stupid enough to align with Zelensky the mobster criminal in Ukraine.
Nexit!
Greece isn’t a zombie state. Crete is a focal point of the following ellipse : the Dardanelles & the Sea of Marmara, Haifa port Israel and Port Said, Egypt. Italy controls the choke points between Tunis and Marsala Sicily and Sardinia. Spain (UK) controls the rocks of Gibraltar.
Prof Daniel Kahneman behavior science died today age 90.
lucky him, he doesn’t have to read or listen or watch drivel any more.
“The EU is more interested in cracking down on Google, Apple, Facebook, and Microsoft for alleged monopolies than developing anything.”
Is it only a coincidence that these are all US companies? What are the legitimate European alternatives?
Mish needs a grammar assistant. Here he is defeated by the double-negative = “Neither Italy nor Greece should never have been allowed in the EMU (European Monetary Union – Eurozone) in the first place.”
I suggest dropping the “never”, or using DeMorgan’s law to start the sentence = “Italy and Greece should never have …”
Olson, it don’t matter; he’s doin’ fine! You’re being peedantick.
It’s not what he said so much as how. I noticed that sentence as well. But really, what’s the big deal? As you say, peedantick.
I correct all typos. Just point them out. Thanks.
I will explain how this happened.
My original sentence was “Italy should never have been allowed in the EMU …”.
When editing, I decided to add Greece making it neither/nor but failing to check the second half of the sentence.
Mish, you don’t have to explain yourself.
🙂
Oh no the grammar police : (
It’s time to watch you P’s and Q’s
I have found grammar sticklers to be in same cognitively impaired category as pseudo intellectuals. Limited to the singular cognitive blessing of a good memory, but seldom offering a novel thought.
Ask the right questions to get the right answers. Mish RIPS
“Poll after poll shows support for Ukraine. Every one of them is flawed because they fail to ask “how much are you willing to pay.”
“A tweet by former Assistant Secretary for Public Affairs for the U.S. Department of the Treasury Monica Crowley, posted on April 18, 2023, viewed 32,000 times, stated: “$200 billion+ of your hard-earned money has been disappeared into the corrupt money-pit of Ukraine.”
$200 billion divided by 300 million people is 666,6666666666666666667.
Got 4 people in your family = your share is $2,664
Take your family on a cruise to Alaska or fund a near genocide in Ukraine/
It has to be hypnosis, or why why people agree to such madness.
Re. German Economy My Personal Direct Knowledge:
For around 2 – 2.5 years, China cut Germany’s and Israels IOT, Mini, defense computer makers almost entirely out of the Chinese board components and circuit boards, while Lithuania, Estonia and a few other appeared to continue receiving similar components but at reduced rates. While these global companies were hobbled almost 100%, Chinas companies conveniently filled the void with bottomless supplies of “replacements”. Customers switched their supply chains to China, because obviously the disruptions could (will) happen again.
“ARE YOUR CUSTOMER BERONG TO US” – HAR HAR
I hate grammar martyrs.
The world was on the verge of a financial crisis in late 2019, but then COVID came along and everyone was distracted by a virus while trillions were dispensed to prop up the system.
Sure, the dollar is worth 30% less than it was 5 years ago and standards of living have declined for the bottom half, but we defeated the virus!
I personally think another “crisis” is many years off and not imminent. In the United States, the debt is still being piled up (mostly by the government) and that’s what keeps the system from collapsing.
the dollar devaluation looks rather synthetic… if anything, it’s the tide going out before the tsunami.
Fun to watch the insane U.S. stock market flirting with all time highs again. Human beings are tragically stupid. I don’t know how we get out of bed in the morning without hurting ourselves, so stupid are we collectively. We make the same mistakes over and over again without learning anything. Socialism is making another big comeback. Like this time, it’s really going to work!
It is capital fleeing Europe that is causing the US stock market to keep going higher. The entire European banking system is a ticking time bomb with a very short fuse and smart people over there are acting accordingly.
I think your hypothesis has merit. However I would not call them smart. You think we’re going to do any better? We’re on the very brink.
Simply put, money follows higher interest rates. Production not so much. The most likely scenario will be European manufacturers pushed out by Chinese. And Europe has nothing to respond with.
The Dollar Milkshake Guy.
There’s a fair bit of bond action going on in the Far East too…
You mean you have missed out on the huge gains from the last three years? What were you doing? Hiding in your basement and predicting the end of the world?
Yes; some humans are tragically stupid.
I’m up over 400% in that time period.
If you think this is going to be different than any of the other insane bubbles we’ve already lived through, then you’ve quite effectively proven my point. TY.
Keep holding Dave. It will be down 90% soon enough and then let’s chat
France had exactly the same problem 235 years ago. Some people lost their heads because of that
YES. Now we are talking common sense and the next step
“European companies no longer generate sufficient profits to fuel the social model – and to fund long-term research.l
So the conspiracy theory was true? Europe is going broke and needs to loot Russian assets and resources to survive?
Conspiracy theories are more frequently true these days than ever before. The Powers That Be need to hide the truth ever more zealously by calling perfectly good information false. They created a poison and called it a safe and effective vaccine. At the same time they labeled an award winning low cost repurposed very effective drug horse medicine because it there were an early treatment, no one would take the poisonous clot shot.We are living in crazy times. It’s getting harder by the week to stay optimistic.
That is the problem with conspiracy theories. There are always morons who are willing to believe them.
Mish. Please arrange for an IGNORE button if possible.
I don’t know if that is possible, but I will ask now.
You don’t need to block me. I’m happy to do it myself.
shouldn’t be encouraging the censorship jihadis… they can skip a comment they don’t like, like a grown up does.
Al is free to comment as much as he wants. I just prefer the convenience of not having to see his comments at all rather than having to “skip over them”. I like being efficient with my time and to focus my attention on those with something worthwhile to say.
but which ones are the conspiracy theories? the “russia laptop hoax” pushed by the mainstream media? which ones were the morons believing the conspiracy theory?
…take your time.
What Russian assets are there to loot?
Certainly not rubles and the small amount of money (300 billion) currently on hold in the US/Euro banks is only a drop in the bucket of the money they are going to shortly need.
The Russian tech industry is probably equal to or better than the Euro one but it’s no where close to the USA or China other than possibly in the weapons industry so hard to imagine it would be worth much.
Physical resources like Oil/Gas/Uranium/Timber etc aren’t in the European part of Russia. They are FAR away in the Asian part and unlikely to be controlled and looted from thousands of miles away given China is closer and would be far more likely to get them if Russia somehow splintered into parts.
At most they could loot (take control of) some Wheat and other grains that are grown in the European part of Russia but doing that would also mean feeding and clothing the Russians who live there. So it’s likely a losing proposition overall.
Then consider what would happen to the 5000+ nuclear weapon stockpile + bio weapon stockpile (Smallpox and others) should Russia splinter and be looted. You’d have to imagine at least 10% would end up on the Black market into countries like Iran or simply terrorist organizations.
The West will collapse long before Russia does, their economy and finances are fine.
Those nuclear weapons will get launched on The West before Russia is “splintered”.
Your brain is splintered.
At least Russia is not unsustainably endebted over the eyeballs like our ‘developed’ western economies ! The other day I watched some footage of the disgusting stinking utterly dangerous crime infested NY metro when compared with the opulant clean Moscow underground…..
Prior to the proxy war in Ukraine Europe was getting a sweet deal on Russian energy and other resources. Now they done fucked that up.
”
France has a budget deficit of 7 percent but wants to fund a European army to fight Russia.
How is that supposed to work?
”
For the exact reason ALL non strictly defensive wars are fought: Captive indoctrinati are more easily suckered into forgetting about deficits, when Dear Leader says the magic spell “We are at War!”
Stuki,
Exactly right. When the masses get restless, start a war. Rally everyone to the cause! If the day comes, that will be why China invades Taiwan.
“France has a budget deficit of 7 percent but wants to fund a European army to fight Russia. How is that supposed to work?”
By Weaponizing Baguettes.
then after the hundreds of thousands of needless deaths, you get “reconstruction” for growth.
Whatever happened to those financial crises a decade ago in Italy and Greece? Big news for a couple months and like the old Hee Haw song “pfft you was gone”
Their zombie banks (UniCredit, BNP Paribas, Societe Generale, etc.) have been on life support for more than 10 years and are ready to implode now.
France and Italy don’t really seem to be that much worse than the USA. Should we expect a financial crisis in the USA also?
A “Financial Crisis” is not a real economic event. But instead just an arbitrary flip switch. Whether someone nominally “has one” or not; is economically rather irrelevant. As is all supposed “economic” “crises”, such as “recessions.”
Economic variables are A) effectively non measurable and B)continous even if/when they are. There are no measurable either/or. The latter is all just made up quantizations made up to appear easier for the one-two-many crowd, than reasoning about continuous distributions of infinite complexity would be.
In the US, we don’t have arbitrary “stability pacts” specifying allowable “debt” to lcp ratios and such. Hence, we’re simply not privy to the class of “crisis” solely arising due to violating those.
None of which means anything economically. But instead only has relevance to one-two-manys trapped inside childish “models” which have precious little to do with real world economic reality.
Where, in reality, the US is at least as broken as Europe. Mostly more so, since the underlying causes of the brokenness; debasement and financialization; has gone even further in the Anglo countries. German Industry may be moving to China. But America hasn’t had industry at all, for decades already. It’s been long gone since the 90s.
YES. Burn the fraud ponzi down to TRUE basic economics again and start fresh