EU Decides Not to Target Investments to Help Nations It Forced into Great Depressions
By William K. Black
Quito: March 10, 2015
Sometimes there’s a news story that captures the madness perfectly. The latest is by Rebecca Christie and Rainer Buergin in Bloomberg entitled “EU Backs Investment Plan With Pushback on Help for Hardest Hit.”
“European Union finance ministers agreed to press ahead with a proposed 315 billion-euro ($338 billion) investment plan, while reminding crisis-hit nations that it won’t offer them special assistance.”
The numbers in the EU’s supposed “investment plan” are a grossly inflated public relations effort. At first blush, the plan is simply a way of subsidizing huge, private firms to increase their profits. When we look more closely we can see it is actually malignant. The public funding, relative to the EU’s overall need for investment is deliberately trivial. Relative to the private firms that the EU will subsidize with those funds, however, the EU public funds represents a 6.67% subsidy. That is a material addition to corporate profits.
“[EU Commission President Jean-Claude] Juncker’s plan envisages using 21 billion euros of EU seed money to mobilize 15 times as much investment in cooperation with private investors. To gain financing help, projects must show private-sector backing and evidence that they will offer a return on investment.”
in full: http://neweconomicperspectives.org/category/william-k-black