The European political and monetary elite is aware of that the conflict in Ukraine is misplaced however desires to make use of it as a possibility to succeed in strategic independence from the US. As the long run chancellor of Germany Friedrich Merz stated proper after his electoral win on Feb 23: “Will probably be an absolute precedence for me to strengthen Europe as quickly as doable a lot that it regularly actually achieves independence from the US.”
Such strategic independence wants cash and funding—a number of it—not solely to spice up protection however a lot else, like vitality and innovation; areas through which Europe is lagging behind the US and China. As a way to have the pretext to implement this spending plan, the concept among the many EU elite is to make it possible for the conflict in Ukraine doesn’t finish too rapidly. That approach the battle can be utilized to justify artificially injecting a lot wanted cash into the moribund EU economies.
First, there was a query of offering €20 billion euros of extra navy assist for Ukraine and that the EU self-imposed fiscal guidelines to be loosened utilizing the prevailing “escape clause” within the occasion of “distinctive” circumstances, such because the bogus “protection of Ukraine” excuse. As Bloomberg acknowledged, “below this plan, EU nations could be exempt from debt and deficit limits when financing navy expenditures. This marks a elementary shift in EU monetary coverage, as such exemptions have beforehand been inconceivable below EU guidelines.”
Certainly, the EU elite doesn’t wish to comply with the arbitrary EU fiscal guidelines: for Paris, the three % restrict of price range deficit to GDP is politically painful, and for Berlin, the restrict of max 60 % of GDP when it comes to federal public borrowing looks like a man-made constraint.
Then there was a chat of a €700 billion euro protection bundle. Newsweek acknowledged that: “Baerbock stated the bundle might be price some 700 billion euros ($732 billion).” French President Emmanuel Macron additionally confirmed this on March 2, 2025. “We’ll give a mandate to the European Fee to outline our capability wants for a typical protection,” Macron stated in an interview printed in a number of French newspapers. “This large funding will most likely attain a whole lot of billions of euros.”
The official slogan of “assist Ukraine defend itself” will give the EU political and monetary elite an excuse to activate the spigots of the European Central Financial institution at full thrust once more; to bathe all the European economic system with “free” cash, and shore up its fragile economies, prefer it did after the euro disaster of 2011, with the big covid restoration fund in 2021, in addition to with the Inexperienced New Deal.
Doping EU Economies with Joint EU Bonds
This time, the concept appears to be to make use of joint EU bonds. Reuters writes: “The larger quantities should come from some kind of centralized funding, as a result of most budgets in Europe are comparatively stretched, notably in Italy and France.” As was acknowledged within the notorious Draghi Report from Sept 2024: “the EU ought to transfer in the direction of common issuance of frequent protected property to allow joint funding tasks amongst Member States and to assist combine capital markets.” Due to this fact, “frequent issuance ought to over time produce a deeper and extra liquid market in EU bonds.”
Joint EU bonds are primarily bond issuances in opposition to the entire euro economic system and would thus entail a low danger and a decrease rate of interest than nation degree EU bonds. That is perceived as vital to ensure that the EU to carry its personal in competitors with the US and China that have already got unified capital markets, as a speech Draghi gave to the EU Fee final 12 months made clear.
There are three major sources of conflict financing: printing cash, rising taxes, and borrowing. Making out there “a whole lot of billions” for the EU would doubtless be primarily based on debt issued from joint EU bonds. Bloomberg famous that, if the spending have been funded with tax will increase, or cuts in different areas, that would wipe out any constructive influence—or worse. Any speedy spending on the navy wouldn’t assist Europe as a result of it will be principally spent shopping for US weapons.
Due to this fact, what the EU elite has in thoughts now’s more likely to put in place what F. Merz stated; a strategic independence from the US by an enormous funding by joint EU bonds, launched and used over the long run so as to slowly construct up Europe’s business, not solely within the protection sector but additionally in different sectors.
The EU Debt Plan is About Centralizing Monetary Management
In a way, this would-be debt plan is simply the European Union emulating the US playbook of utilizing conflict for crony capitalist advantages, lastly “understanding” learn how to cynically exploit the Ukraine conflict, simply because the US has been doing since 2022 by feeding its military-industrial complicated. However, to ensure that this to occur, the conflict should not finish too quickly for the European elite, which is why efforts are made so as to—outrageously—spoil any US peace plans and get the conflict to proceed for now.
This plan is the standard Keynesian militarist spending plan that European states have been as much as already from WWI and onwards—and never solely the fascists and the Nazis, as John T. Flynn’s confirmed in his important e book, As We Go Marching.
The results over time of this public spending spree can be as disastrous for Europe as they’re apparent, in fact, for college kids of the Austrian Faculty of economics. It’ll, as at all times, result in value inflation and devalue the euro foreign money, it is going to inflate bubbles, it is going to distort EU economies, it is going to result in malinvestments, and—final however not least—it is going to depart small European companies, the spine of Europe’s economies, hanging out to dry. It’ll simply kick the can down the highway and permit the EU authorities to postpone coping with their actual structural issues, each financial and political. That is notably true for France.
However all that is irrelevant for the European elite, as a result of from their perspective this spending will artificially increase GDP within the many member states, it is going to create certified jobs with the protection and vitality sectors throughout Europe and thus soak up a number of the systemic unemployment which is a product of many years of heavy state interventionism. It’ll enable additional centralization and harmonization of European economies to the advantage of energy centralization in Brussels, as it is going to as a substitute drive for frequent protection platforms as a substitute of the fragmented patchwork of protection suppliers that exist in Europe as we speak. As ordinary, the pursuits of the ruling minority diverge from the pursuits of the disorganized and dominated majority.
Lastly, it is going to make present EU politicians extra widespread than now (which, admittedly, isn’t laborious), and it’ll profit their careers and almost certainly their private wealth as properly by all of the kickbacks that they may get. The President of the European Fee, Ursula von der Leyen and lots of different EU bureaucratic parasites already know any such “enterprise” properly.
This, not less than, appears to be the plan. There shouldn’t be a lot political opposition to it, since it will be political suicide to oppose a plan that “not solely will make Europe nice once more (MEGA), but additionally safer (from Russia)!” The confirmed victory of Merz’s CDU in Germany already made the potential political opposition from the AfD lighter.
That is one more case which exhibits that Western publics—not solely in Europe but additionally within the US—want to know higher that cash creation, whether or not by debt or in any other case, and artificially pumping this cash into the economic system won’t be to their profit. The negligeable advantages to nearly all of such insurance policies can by no means justify their actual goal of sustaining large bureaucratic states and rising their management over society. It’s subsequently as pressing as ever to proceed to unfold the data and knowledge of Austrian economics.