WHY IS THE EUROPEAN UNION DESTROYING ITS OWN ECONOMY?

12 March 2024 by Gaius Baltar

Things are bleak in Europe these days. European leaders are caught in a “fight or flight” response, deciding whether they should run and hide or send troops into Ukraine to fight the Menace from the East. However, the existential terror of Emmanuel Macron and his toxic-narcissist accomplices in the EU will have to wait for a dedicated article because this one will focus on the European economy.

It has puzzled many how the EU has been managing its economy since the beginning of the Ukraine war. There have been two distinct shocks inflicted upon the Eurozone economy since then. The third shock, which may be the worst, is on the way. All of them are direct results of European policies.

The first shock was the increase in energy prices (and availability) resulting from the sanctions on Russia. This shock alone has decimated the competitiveness of European industry and many large companies in the most important part of the value-adding chain, particularly basic and advanced manufacturing, have either shut down operations or are packing their bags and leaving the EU. Thousands of small (and mostly family owned) companies, particularly in Germany, are either already bankrupt or technically bankrupt. This will have severe consequences for the “service” part of the Eurozone economies as well as state finances and the ability to maintain the European welfare state.

The second shock is the obvious and all-out regulatory and bureaucratic attack from Brussels on European companies and entire sectors of the Eurozone economies. The regulatory load inflicted on European companies has been tuned up to such a degree that many of them can barely operate any longer. Technical trickery and bizarre laws are being used to outright destroy European agriculture by bankrupting farmers and to prevent investment into new energy projects. The automobile industry, a key sector in Europe, also appears to have been scheduled for termination with Brussels reportedly planning to double the cost of owning and operating a car in the next few years. I could go on, but it’s clear that these measures are massively adding to the energy price shock from the Russia sanctions.

It is baffling to any rational person why the EU has chosen to add to the effect of the sanctions by engineering a further destruction of European economies. Before addressing this apparent lunacy, let’s look into the future and check out shock number three which will most likely hit Europe (and the entire West) sometime in the next few years.

The third shock will be the “externally forced” devaluation of the euro and a massive drop in European living standards. To explain how this works let’s use the United States as an example. The US trade deficit in 2022 was nearly a trillion dollars. This means that every American got $3,000 worth of stuff from the outside world which he didn’t have to work or pay for. In addition the US Government is printing trillions of free dollars annually to keep things going, including keeping up living standards. The US can do this because the dollar is the world’s reserve currency and can be sold in exchange for real stuff like a commodity. The outside world is keeping up US living standards through its labor and raw materials, essentially for free. This also applies to Europe because the euro is basically a retail outlet of the dollar and Europe therefore indirectly enjoys the US’s exorbitant privilege. If the West is properly isolated and the dollar loses its reserve status, the euro will go down with it. It is even possible that the euro might go down before the dollar does because Europe can’t print money to the extent the US can. In other words, when the “global south” – most likely in the form of the BRICS – manages to ringfence itself off from the dollar, the West will lose all the free stuff. For Europe this will mean the crash of the euro and a drop in living standards by perhaps a third – or more.

The third shock is almost unavoidable, particularly if Russia decisively wins the Ukraine war. Now, one must assume that the people in the European Central Bank and even some in Brussels are aware of this. A normal response to this future shock would be to strengthen the European economies by all means in preparation – and thereby to minimize the possibility of an outright rebellion by the EU populations. That is, however, not being done. Instead the EU keeps destroying its own economies. Why?

The cunning ESG plan for world domination

I recently had the “pleasure” of receiving a very detailed briefing on the ongoing ESG initiative from the democratically unelected European Commission. It is actually called “the European Sustainability Reporting Standards (ESRS) for companies subject to the Corporate Sustainability Reporting Directive (CSRD).” It just rolls off the tongue.

This was a four hour briefing and it barely scratched the surface of what is really going on. The others in the briefing were focused on the technical issues and what companies would have to do to comply, but I tried to focus on what this initiative really is and what it says about the planned future of Europe. It is truly mind boggling.

The ESG initiative can be described as a very large set of demands placed on all European companies (except the smallest ones – for now) regarding two things: Information and compliance. Each company must set up a new accounting system which, instead of finances, will handle a large set of data related to climate, pollution, biodiversity and social issues – although the main focus is carbon dioxide “pollution.” A significant part is hard data while the rest is “evaluated.” The bureaucratic load this represents is truly staggering.

The compliance part is very interesting. At some point in time companies will be punished for not complying with certain standards defined by the European Commission. It is not completely clear at this point what those standards will be or how they will be enforced – i.e. how non-compliance will be punished for. This means that European companies are being required to set themselves up for standards yet to come, and punishments to be defined later.

In other words, this is a very detailed control system for European companies where the European Commission can, in the future, dictate anything it wants – and punish for any violations any way it wants. Apart from the crazy regulatory load, this initiative can only be seen as a direct seizure of operational control of European companies, and thereby the European economy.

All this comes with planned milestones approximately until 2030 when all this is supposed to be operational. Two of the milestones are extremely interesting to say the least. The first one is tentatively scheduled for 2026 and involves the expansion of the system outside of Europe. In 2026 (or maybe later) all companies selling goods to Europe or supplying European companies with raw materials or parts, will be required to comply with certain aspects of this system. One can only assume that these requirements will increase over time.

At this point in the presentation I asked a couple of questions: A) What if, upon reviewing these standards, European companies, which are able to, will simply decide to pack their things and leave the EU? B) How, exactly, will the European Commission be able to enforce this outside the European Union? Might not some critical companies or countries simply decide to stop dealing with Europe?

The guy doing the presentation was very knowledgeable about the system and its implementation. He understood both the details and the big picture quite well. He was also all-in on the importance of doing this. I have no doubts whatsoever that his thinking is in line with the thinking in Brussels. He answered those questions in the following manner:

Question A): Leaving the EU is not going to work because there is no other place to go. Other countries are also developing these standards, including China and India, and this will be global very soon. Leaving the EU will therefore be pointless.

Question B): When the EU sets up the compliance requirements for external companies to do business with European companies, they will all comply. We call this the “Brussels effect.” When dictates come from Brussels, everybody will follow them because it is impossible to be in a position where you cannot do business with Europe.

I’m paraphrasing some of this but not all. In other words, the EU believes that it is so powerful that it can dictate these standards to the world, and that they will, as a consequence, be adopted globally – and eventually in full. This also means that the EU is preparing to “isolate” those who don’t comply – forcing them to comply like it is forcing European companies to comply. The existence of the BRICS doesn’t enter into the equation, or the possibility of European isolation.

The second milestone in the plan is even more interesting than the first. There are repeated references to financial consequences for non-compliance – and an eventual “financialization” of the system. Those plans have obviously not been fully developed – or they have and are not yet being announced.

Firstly, it seems clear that the EU is planning to make interest on corporate loans (and perhaps availability) contingent upon compliance. If you comply fully, you’ll get better interests on your loans than those who don’t comply fully. This implies a future legal framework for the European financial system, where the EU will dictate to banks who they can lend to and how costly those loans will be. This also implies a virtual regulatory takeover of the European financial system. Lending is what banks do, and if the EU controls lending, then the EU de facto controls the banks.

Secondly, there is an “end-point” of sorts defined for the plan around 2030. This end-point is clearly financial in nature, but it is not yet clear what it will be. There are speculations though. The most conservative speculation is that the system will be enforced at that point through direct financial penalties for companies. There is also a wider speculation that the system will develop into a “quota system” – primarily based on carbon. Following that, this quota structure will result in “green bonds” which companies can issue if they comply.

While the financial end-point is nebulous, it seems likely that the EU ESG system is intended to do two things:

Assume total control of the EU economy down to the corporate level, including operational decisions at every level of the company. This goal is accompanied by the obvious persecution and elimination of companies and sectors which are now either too small to control like that, or too independent in nature. This applies to small companies in Europe, which will likely be starved out by technical and legal means and then usurped by big business – and to sectors such as agriculture, with farmers too small and stubborn to be controlled. Agriculture is too critical a foundation for society to be left out of EU control – and this control will be implemented by moving the entire sector to big business by bankrupting the farmers through regulatory measures and cost increases.

Provide a financial framework for the future organization of the European economy, and subsequently for European society. It is likely that the plan is to use carbon and carbon quotas as a base for collateral, upon which companies, banks and the European Central Bank can issue “clean and new” debt, unencumbered by old fashioned collateral requirements. It will most likely be seen as a “clean break” with the old way of issuing debt.

What makes this eventuality likely are the current problems the EU is facing when it comes to debt and bond issues. Currently everybody and everything in the EU, including the Bundesbank and the European Central Bank, is technically bankrupt after falsifying the EU economy since the 2008 crash through zero interest rate policy and the unending issuance of debt (often denominated in dollars). On top of that, the European Commission does not have the ability to issue bonds on the behalf of the EU as a whole. That mechanism must therefore be created, and right quick. If it isn’t done, the Commission fears that it will lose control of the financial situation in Europe, leading to the EU fracturing. A rigid and unified control mechanism for the economy that provides a mechanism for new debt is therefore required.

It is likely that the Commission will start issuing Eurobonds before this system is ready, because the pressure is on. The time-frame for the system is, however, very short. This is all supposed to be done in 6 years.

It also seems likely that the Commission is hoping that this new financial architecture will go global, with Europe at its center. The plan to enforce the ESG system outside of Europe might imply that kind of thinking. Brussels is not known for humility when making plans which assume EU power and infallibility.

The main questions posed at the beginning of this article were why the EU is further sabotaging the European economy, which is already under extreme pressure from the sanctions on Russia – and why the EU is not preparing for the likely crash in living standards in Europe as a result of the loss of the reserve status of the dollar.

I believe that there are two answers to these questions. The first answer is that the ongoing sabotage of the EU economy and the associated ESG initiative are a part of a plan which cannot be altered, regardless of what the situation is. The second answer is that the European Commission believes that this plan will be sufficient to save them from doom.

Let’s take a step back and look at what has been happening in Europe (and the entire West) for the last few decades. Let’s look at it from the EU elite’s point of view. In recent decades a social revolution has been carried out in Europe from the top down. It has managed to radically change the values and perceptions of the European population. Logic and reason has been abandoned, along with competence and critical thinking. The normalization of the bizarre is such that most regular people accept almost anything from their governments – and from other people. Men using women’s restrooms is normal; pedophiles running the school system is acceptable; genital mutilations of children are a matter of justice; neglect of children is now scientific upbringing; and government mandates on who you hire for your own company are sensible. Even a group of “capitalists” watching a presentation on how the European Commission intends to seize control of their companies sees it as normal.

The whole point of this revolution was to target reality and twist it enough to make anything acceptable. This goal has now been reached for the most part. We saw that during the Covid-19 operation where European populations demonstrated their docility and acceptance of any orders from above. The European people demonstrated there that they are ready for the next step – and the next step is indeed upon them.

The next step needs that unquestioning acceptance to work and now the European people are ready. It must be implemented now, because of the horrible economic and political situation in Europe. The time table has been moved up and the EU is in a hurry. The next step is what the old revolutionaries referred to as “seizing the means of production” – except it won’t be the proletariat doing it. It will be the elite. It has already started as we can see from all the bankruptcies and the farmer protests. However, the main mechanism for this is the ESG system. It will provide control and consolidation – and later a new centrally planned financial system.

The EU is implementing this now because they feel that they have no choice. Any solution which does not bring the EU economies under their absolute control is out of the question because all other solutions are likely to lead to the fracturing of the EU and their loss of control. This is it the only solution – and it must be implemented now. Even if it makes things worse “in the short term” it must be done now.

Regarding the “no more free lunch” comet heading for the EU (the third shock above), I believe that Brussels truly believes that this solution will not only save them – but re-establish the status and financial hegemony of Europe in the world. They are that … optimistic.

Some modest advice

It’s easy to look at what is going on in Europe economically as just panic and/or financial measures of governments brought on by the sanctions failure. I think that view is wrong. I believe this is both planned and much more serious that people realize. People are likely to see the ESG system as just “formalization of environmental regulations” or something like that – but it is so much more. Its sinister nature is obvious to anyone sane who examines it.

I know that no one is going to take advice from me seriously. I’m after all just some dude writing stuff on Substack. But I have some advice anyway:

Europe has now become so insane, and so toxic, that it should be put under both social and economic quarantine. You can also see that as advice if you like.