Juncker’s Christmas present for Europe: used goods in an imaginary wrapping

Jean-Claude Juncker announced – with great fanfare – a Christmas present for Europe yesterday. It was a €315 billion investment plan which would generate 1.3 million new jobs.  Sleight of hand is what he is good at as he has proved during his time as Prime Minister of Luxembourg. Do one thing and call it something else. Provide and attract users for clever schemes for tax evasion but call it tax avoidance.

Yesterday’s announcements don’t surprise. They don’t provide any credit for Juncker, the European Commission or the European Parliament. They do confirm for me that the “old” dream of a new European hegemony – mainly shared by French and German and some Italian politicians – is crippling the EU.  Trying to recreate the past with another Holy Roman Empire or a Fourth Reich will only lead to a spurt for separatism and further internal conflicts.

Right now European companies are awash with money which is not being invested. It is not being invested because the political environment does not provide any confidence that a return can be earned. Angela Merkel is seen as being forced to accept wasteful spending because of her grand coalition with the socialists. German energy policy is in a shambles and Germans pay the highest electricity prices in Europe. Even reductions in oil price don’t get passed on to the consumer because the Energiewende has locked the country into an era of high prices to support the unsupportable shift to renewables. The German economy has been stagnating since the coalition assumed office. Francois Hollande is desperately trying to spend more money that France does not have. Northern Italy is being held down by spending in southern parts. In Sweden a new Red/Green minority coalition depends upon support from the far left (a euphemism for old communists) and is busy stopping infrastructure development projects to keep the Greens happy and planning a splurge of public spending to keep the far left happy.

And then comes Juncker with his claim that Europe would have an early Christmas. The European Fund for Strategic Investment (EFSI) is the brainchild of the EU Commissioners and will keep them happy and the bureaucracy growing in a time of “austerity”. And the idiot EU parliament approved it.

Juncker's EFSI

Juncker’s EFSI

The fund is supposed to stimulate infrastructure projects (road, rail, energy, IT, …) but it needs new legislation in each country and will cause a competition between the countries to get their share of the new EU pig-trough. But his €315 billion turns out not to be €315 billion. It is just €21 billion. Oh, and by the way, even this is not real. It is not any new money but just an arithmetic subterfuge. It is just reallocated from other  areas of the EU budget. And if the massive leveraging to get private investment to produce the rest of the €294 billion does not materialise – as it won’t – then the European taxpayer has to pick up the tab. Those few investors who come in will be protected – by taxpayers money – and will lead to further exploitation of EU money by the few. As wih most such grand EU spending schemes new scams will be developed. A few developers and the EU bureaucrats will enrich themselves. And the EU taxpayers will pay – and continue to pay.

Juncker sees himself as Santa Claus. But as Pope Francis said a couple of days ago, Europe is becoming “haggard”. Not that the Roman Catholic Church has much to crow about but with Juncker at the helm it could become an expensive Christmas for Europe. He faces a no-confidence motion today but I don’t hold out any great hopes that he will be rejected by a compliant and self-serving European Parliament.

The EU has become just another cult.

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