Guest essay by Eric Worrall
EU rules designed to prevent out of control spending are in tatters, as top EU officials conspire to circumvent their own fiscal rules and breach debt limits, to fund the green energy transition.
EU budget offers debt loophole to battle climate change
Policymakers are trying to turn the economy green while keeping EU finances in check.
BY BJARKE SMITH-MEYER January 14, 2022 6:45 pm
The EU’s €1.2 trillion war chest — also known as its long-term budget — has emerged as a possible workaround on how to finance the expensive fight against climate change despite carrying heavy debt from the pandemic.
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Failing to plug that green hole would see Europe fall short of its own green goals and risk damaging its credibility as a global force for climate action. The EU budget could be the solution to avoid that dilemma, according to the head of the International Monetary Fund.
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Under normal circumstances, governments must cap their budget deficits to 3 percent of GDP and try to limit their debt to 60 percent under an EU fiscal framework called the Stability and Growth Pact, or SGP. Those rules have been on ice since March 2020 to ensure governments could battle the pandemic without fear of punishment from Brussels and enact stimulus programs that pushed debt levels up to uncomfortable heights.
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Golden rule loses shine
The EU budget could neutralize that threat by providing capitals with a cash pot they can request money from by presenting spending plans with specific targets that Brussels can police. “It’s such an obvious candidate,” one of the EU officials said on the condition of anonymity, as no decisions have been made. “Carbon dioxide doesn’t care about borders.”
It might also be an attractive alternative to another approach — floated by some think tanks — that would introduce a “golden rule” that omits green investments from the SGP’s deficit cap. That pitch is losing traction amid fears that it would encourage greenwashing.
“Everything magically becomes green,” said Marco Buti, who heads the cabinet for Economy Commissioner Paolo Gentiloni, on Wednesday during an online debate on the deficit.
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Read more: https://www.politico.eu/article/eu-budget-climate-change-greenhouse-gas-emissions-fossil-fuels/
Stagflation and hyper-inflationary pressures do not care about what is in the hearts of the bureaucrats who sign the cheques, it does not matter if bureaucrats believe they have the best of intentions, when they parachute too much money into the economy.
The road to hell is paved with good intentions.
The ongoing collapse of the Turkish Lira right on the border of the European Union, is a clear and present lesson on how easily ordinary people can lose confidence in a fiat currency. Those fiscal rules were created for a reason.
Politicians and “free” pots of money….Yeah, what could go wrong with that?
Nothing at all. It’s well-known that politicians are honest and trustworthy in all things, and only have their people’s interests at heart.
How many therapy sessions did it take after typing that? I know it was /sarc, but still..
Anyone that believes the EU represents a Democratic government is naive. It’s a Marxist quango designed to capture and control peoples’ freedoms slowly and inexorably to the detriment of the successful. It could have been a positive influence on European unity but like all totalitarian governments it will eventually kill the goose that laid the golden egg.
Silly.
Every attempt to create a European USA, from Churchill to the CIA, following Napoleon, Hitlers mentor, has been anything but a golden, egg, rather a tombstone.
London’s problem with the USA spills over to Europe, starting with Robespierre, Danton, Marat’s Terror. London just never got over Lafayette’s Yorktown!
Napoleon was Hitler’s mentor? Alternative history running amuck.
The EU was never an attempt to create a European USA, it’s goal has always been a European USSR.
Hitler himself in Paris actually said Napoleon was his model (vorgänger) . No kidding.
And the EU originally a Churchill United States of Europe, actually from his buddy, Mosley’s British Union of Facists, trundled on under a CIA program.
Lot’s of detail here :
https://canadianpatriot.org/2020/11/12/how-the-cia-created-the-eu/
…American Committee for a United Europe, ACUE, more than any other American front organization of the Cold War, was a direct creature of the leading lights of the CIA…
All in a french biography of Monnet….
Now wonder how the EU is in-sync with D.C…
Words have meaning (something conspiracy nuts such as yourself try to ignore) . Model and Mentor are two different words with two different meanings.
bonbon the nutcase as usual in on form!
Some years ago when my son was 35 I told him if he lived to 70 he would likely see the disintegration of the EU – unless there are massive reforms but these are highly unlikely. A responsible adult will budget wisely and appreciates thrift and targeted generosity. These three concepts seem totally absent in the vocabulary of the EU officials and most European politicians. They only know how to waste, to splurge and enrich themselves. They are often truly worse parasites than those living off the dole.
Forgotten the Blue Letter from Trichet , ECB Chief, to the Dublin Government, already. That demand for a bail-out or else, tells much more about the EU.
In other words it is the disintegration of the transatlantic banking system that is the danger.
Wanting to lead the green revolution is like wanting to march in the Emperor’s parade wearing the same invisible garments as the boss. There is clearly an overriding and ill-conceived desire for exhibitionism that completely ignores the practical modesty most of us should seek.
Any kid can see through that :
Is that supposed to be Simon, Griff, Ghalfrunt, BigOil 🤔
“ Everything magically becomes green,”
Indeed it does – only the magic doesn’t work
Spray paint it!
It can be any color you want as well!
To quote Ford, you can order my autos in any color as long as it’s black.
Looks like black magic actually did work!
Oh Boy! Free money! I wonder where it comes from?
when I took introductory economics in the late ’60s- the textbook was by Heilbroner (“The Economic Problem”)- I think it was the most common textbook for that course- he tried to argue that it was OK to have endless budget deficits- even very large ones– it’s possible that might be true if the deficit was due to wise investments that would pay dividends- not just handouts to win votes
maybe it was only used in the far left states, lie here in Mass.
Economists leave out the reality part about others not allowing you to borrow more from them if they are worried about being paid back….
Here is the reality bit : you owe $100 it is your problem. You owe $100 million, it is their problem.
The world GDP ‘owes’ $100 quadrillion. Guess whose problem that is?
If your economy is growing, you can run a small deficit. You need to keep the supply of money growing at the same speed as your economy is growing.
When the money supply grows faster than the economy, eventually you will cause inflation.
As to investing, governments never invest.
“You need to keep the supply of money growing at the same speed as your economy is growing.”
Big government enabling Keynesian claptrap. You don’t need the money supply to grow at all – in fact, inflation is, by definition, an expansion in the supply of money.
Frank be careful with your sorcery thinking 🤓
Your great grandchildren.
The “climate revolution” has always been only a creative accounting.
Sounds harmless, like Arthur Anderson’s accounting for Enron , Houston TX, 2001.
Such bean counters left a $50 BILLION CA deficit, carried by the tax-payer, of course.
Care to rephrase ‘creative’?
There is no cure for stupid going mad
“Global heating linked to early birth and damage to babies’ health, scientists find
Scientists discovered increased heat was linked to fast weight gain in babies, which increases the risk of obesity in later life. Higher temperatures were also linked to premature birth, which can have lifelong health effects, and to increased hospital admissions of young children.”
https://www.theguardian.com/environment/2022/jan/15/global-heating-linked-early-birth-damage-babies-health
Anyone who has ever had babies must know the most important index is early weight gain.
Not possible now in Afghanistan as London and WallStreet have stolen their $9 billion :
Even BBC reports this :
https://www.bbc.com/news/world-asia-59419962
Funny that no matter what the evil, it’s always the same people behind it.
“Even BBC reports this”
Even the BBC? Ha Ha Ha
You win the Internet joke of the week contest, hands done, even though the week has barely begun.
sounds like you better lay off the beer and fags Your posts get weirder and dummer each time you touch the qwerty
And now even the NYT – usually all the lies fit we print, but :
https://www.nytimes.com/2021/12/04/world/asia/afghanistan-starvation-crisis.html
And the FT :
https://www.ft.com/content/3f692e15-0e78-4fe3-845f-74093fafd904
and
https://www.ft.com/content/65f61fb1-9462-4e25-990a-702812860b76
Not a laughing matter, then? It the intent is a genocide of 20 million, in the name of human rights, even MSM sees what that means. The entire world is witness.
Only America can print vast amounts of money without immediate hyper inflation because the dollar is the international currency- so all that excess cash spreads around the world. Any other nation- not so lucky. It’s one advantage of being the alpha dog in the pack.
All that excess cash did not spread around the world, rather into offshore tax havens and central banks.
Note this : Wealth of world’s 10 richest men doubled in pandemic, Oxfam says
https://www.bbc.com/news/business-60015294
“Wealth” I think it is debt 🤓
BBC? Really, they used to be one step above the Guardian. Now days, not so much.
Ah, but 10 miles above Oxam
Are you suggesting that entrepreneurs like Elon Musk or Jeff Bezos should have stopped investing because of the pandemic?
…Danny Sriskandarajah, Oxfam GB’s chief executive, said the charity timed the report each year to coincide with Davos to attract the attention of economic, business and political elites.
“This year, what’s happening is off the scale,” he said. “There’s been a new billionaire created almost every day during this pandemic, meanwhile 99% of the world’s population are worse off because of lockdowns, lower international trade, less international tourism, and as a result of that, 160 million more people have been pushed into poverty…
COVID is a free-lunch for billionaires, and it is called free-trade for us….
The EU fiddling its own rules? Surely not. The EU is a benign grouping of countries whose only purpose is to benefit its people, isn’t it?
Unlike the US oath to preserve the Constitution’s General Welfare Clause, the EU has none.
Come to think of it, which US notaries actually ever even heard of the Constitution?
It is not rocket science to see why Turkey was never allowed into the EU nor the Euro. NATO, yes. Now Erdogan has Pan-Turk visions extending all the way to Kirghiz, and look what happened. Was Turkey involved in Kazakhstan’s failed color revolution?
The Grey Wolves have come home to feast….
Only simpletons are Hayek or Keynes London School of Economics monetarists…
And what rule, pray tell, entitles Marc Carney to demand a $100 TRILLION green bubble bailout? He makes Erdogan look like a genius, and the Eurocrats like amateurs!
“Was Turkey involved in Kazakhstan’s failed color revolution?”
pro-Putin troll farm strikes again – called WUWT “Bonbon nutter”.
European Union Fiddling Their Own Rules to Fund
the Climate RevolutionPretty Much Everything.Yep. No change there, then.
Innit just amazing how a non-toxic, invisible, totally benign, non-radiating gas with vanishingly low thermal conductivity can drive so many people to become raving spendthrift lunatics.
What is going on here?
At least Boris went the more normal way by consuming way too much alcohol & sugar and marrying a eco-warrior chav – but how did GoJo Brandon get there?
Certainly all of Germany’s citizens are utterly completely paranoid about ‘doing something wrong‘ and thus starting a 3rd world war – they have been since the 1950’s if not before.
Is that it= a ‘once in an aeon‘ chance to demonstrate to the world how good they are – via an epic rampage of self-flagellation?
people do the strangest things
This is not a SM thing!
Look further into finance, note the Bank of England (not discounting their interest in SM)…
All’s fair in love and “climate change”.
Especially “climate change”.
EU is a sick joke.Period.
It is more successful with a better standard of living on average than the USA…
Examples please, griff.
Oh, I forgot, you don’t do data.
How is it “more successful”?
The EU is definitely more despotic than the USA
https://www.independent.co.uk/news/world/europe/european-commission-president-ursula-von-der-leyen-juncker-eu-parliament-a8987841.html
Apart from making prices spiral 200% so that people from EUROLAND Riga drive 800kms round trip to non EURO Poland to go shopping for the day.
Of course griff has never visited anywhere else than his local Tesco in the UK, so how can he know?
Chinese Coal Plants score freely while the EU solar panels and Wind-Turbines receive a Penalty and a Red Card,
Laugh to keep from crying:
They have to keep up with the U.S. in debasing its currency or get left behind.
Ladies and Gentleman . . . This is the result of Western Governments and their obsession with ‘Environmentalist driven Initiatives’. The EPA in the United States, Cap and Trade in Europe and environment Canada have all driven this Chinese increase in burning Fossil Fuels (Coal). How can we stand back NOW and point fingers at them . . . We banned pollution at home absent a requirement or legislation for ALL imports to meet the same ‘Stringent Pollution Standards’ in keeping with our own.
Sooo . . . The strident voices that had long decried the disgusting atmospheric and terrestrial conditions created by primary industries at home succeeded. Laws were passed and penalties would be paid, or industries would be Shut Down. Results were attained, the skies cleared, industries complied. However . . . that production had just quietly moved to Third World countries, below the radar. Now they are beyond the reach of law makers at home like the EPA, Cap & Trade or Environment Canada. The Environmental Movement celebrated their apparent successes. No stone was left unturned in Championing Environmental Causes. Unmentioned is the fact that industries had moved to countries where supportive regimes and skilled labor were plentiful and un-assailed by government interference.
Our new world order – Social Egalitarianism, Globalization, Environmentalism and Social Engineering in the 21st Century . . . The Irony of it all . . . Printing money to make up for what we gave away in the name of Environmentalism, to the Third World . . . Our Economies are dying . . . Social Elitism has failed . . . Now the once powerful ‘Home-Grown’ Unionists ARE the down trodden . . . They payed the price . . . while the Elitist Socio-Economic Wisdom thrives . . . in the West . . . meanwhile China Laughs – All the way to the Bank.
Today China alone, processes 60% of Global Base Metals . . . and all the pollution that goes with it – 25 Chinese Cities now account for 50% of Global CO2 – Out of site – Out of mind . . The New World Order . . . 30 years since China evolved . . . Western Elitist self-flagellation in the name of Environmentalism . . . Maintains Total Global Pollution . . . While stripping the very life out of the Western Economies . . . With no end-gain . . . in Global terms . . . Total GLOBAL Pollution remains the same !
But we look sooo good . . . on paper . . . and . . . now, we can point fingers at others . . . Such Hypocrisy . . . In context . . .
(PDF) Social Engineering, Environmentalism & Globalization – A New World Order | Jim Le Maistre – Academia.edu
My Thoughts . . . .
Well you need a lot of money to subsidize power bills after you’ve jacked them up unaffordably with a spaghetti and meatballs grid full of unreliables-
Germany to help companies shoulder higher power costs (msn.com)
The EU is a time bomb- “Bigger than the GFC – Target 2 and the Euro crisis – Dr Oliver Hartwich” https://www.youtube.com/watch?v=q2QYaJGgtw8&t=619s