Germany says NO to Financing the Communist EUSSR

Draghi is the face of the communist superstate that rules & regulates everything to death. It is the nightmare of a EUSSR no one wants, except the unelected corruptocrats in Brussels.

Draghi Says Europe In Existential Danger Without Massive New Spending And Joint Debt; Germany Immediately Says “Nein”

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“For the first time since the Cold War we must genuinely fear for our self-preservation”

It has been a while since we were reminded that without the ECB’s constant (and endless) backstop, the Frankenstein monster that is the European (fiscal Dis)Union, is doomed. Well, this morning, former ECB President Mario Draghi reminded us of just that when he called on the EU to invest as much as €800 billion ($884 billion) extra a year and commit to the regular issuance of common bonds to make the bloc more competitive with China and the US.

In his long-awaited report on European Union competitiveness (link here), Draghi urged Europe to “develop its advanced technologies” (unclear what those are: maybe cultural appropriation from integrating 10 million Muslim immigrants in the past decade), create a plan to meet its climate targets and boost defense and security of critical raw materials, labeling the task “an existential challenge” because “if Europe cannot become more productive, we will be forced to choose. We will not be able to become, at once, a leader in new technologies, a beacon of climate responsibility and an independent player on the world stage. We will not be able to finance our social model. We will have to scale back some, if not all, of our ambitions.”

To achieve his proposed goal, Draghi said that Europe would need to boost investment by about 5 percentage points of the bloc’s GDP in order to transform its economy so that it can remain competitive.  Needless to say, this is not only unprecedented  – for comparison, the additional investments provided by the Marshall Plan between 1948-51 amounted to around 1-2% of GDP annually – it will simply not happen without a huge global crisis which will make the panicked reaction to the covid pandemic pale by comparison.

In short, Europe is cooked unless it unleashes the biggest spending spree in its history, surpassing even the post WWII Marshall Plan, one that would also require pretty much constant QE (to monetize all the newly issued debt) and send gold and crypto to unprecedented highs.

“For the first time since the Cold War we must genuinely fear for our self-preservation,” Draghi told reporters in Brussels Monday. “And the reason for a unified response has never been so compelling and I am confident that in our unity we will find the strength to reform.” And by “strength” he meant just the right crisis to greenlight what will be a record avalanche of spending and debt issuance.

Draghi’s report notes that EU economic growth has been persistently slower than in the US over the past two decades, driven by smaller advances in productivity. Germany has emerged as a particular weak spot as its industrial sector continues to struggle with high energy costs and a loss of competitiveness to China. GDP in the euro zone’s biggest economy is barely higher than before the pandemic.

Draghi also warned that EU economic growth was “persistently slower” than in the US, calling into question the bloc’s ability to digitalize and decarbonize the economy quickly enough to be able to rival its competitors to the east and west.

To be expected, implementing the report’s most ambitious proposals, such as more joint debt, would face significant push back from countries including Germany and the Netherlands, that are strongly opposed to deeper fiscal integration as it means Europe’s less advanced “southern” countries would be a drain on “northern” Europe’s hard work and resources… again  . What’s more, most of the largest EU countries are contending with difficult domestic political situations that could give them limited room to maneuver.

European Commission President Ursula von der Leyen, who tasked Draghi with delivering the report, will need to decide how much of his recommendations to pursue.