The European Commission has announced a proposal for the EU to borrow some €30 billion to help member countries hit by economic shocks. They call this a “first step” that is stopping more ambitious proposals from people like Macron.
The proposal would allow the Commission to borrow on capital markets in its own name and lend to countries facing single major problems to help them recover investments in new infrastructure.
It is also proposed that the interest on the loans made by the Commission to governments would be covered by the profits that central banks in the eurozone earn from issuing money!
Finally the Commission is proposing that no country would be allowed to receive more than 30% of available lending capacity.
The scheme would be open to eurozone members countries…
So many things are wrong with this that it should be shot down immediately for 3 good reasons:
- The EU already has a budget and it does not need to borrow. In fact all borrowing by the EU should be banned along with the right to tax EU residents. What is the point of a budget when we already know that the EU cannot even manage its own budget today. There is corruption, nepotism, prolific spending, 2 parliaments and so many excessive jobs, assistants, etc. So much needs to be done to clean up this organisation. The EU is always talking about austerity – so let them practice what they preach!
- Central bank “profits” belong to each nation and NOT to the EU.
- Europe already has the EIB, EBRD, Council of Europe, and many other funds that are available if disaster strikes. Another system is the last thing that is needed…. and do not forget that the European Central Bank is still busy buying bonds (lending money) at the rate of € 30 billion a month. Their total lending to EU governments is well above €2 trillion…
€2 trillion is equal to €2 000 000 000 000 – about the same size as the GDP of the UK
Perhaps they are thinking of helping the UK – a country facing an existential crisis with the Brexit chaos. That would make a worthy candidate for such a wild idea!