Europe Considers Wholesale Savings Confiscation, Enforced Redistribution

Tyler Durden's picture

At first we thought Reuters had been punk'd in its article titled "EU executive sees personal savings used to plug long-term financing gap" which disclosed the latest leaked proposal by the European Commission, but after several hours without a retraction, we realized that the story is sadly true. Sadly, because everything that we warned about in "There May Be Only Painful Ways Out Of The Crisis" back in September of 2011, and everything that the depositors and citizens of Cyprus had to live through, seems on the verge of going continental. In a nutshell, and in Reuters' own words, "the savings of the European Union's 500 million citizens could be used to fund long-term investments to boost the economy and help plug the gap left by banks since the financial crisis, an EU document says." What is left unsaid is that the "usage" will be on a purely involuntary basis, at the discretion of the "union", and can thus best be described as confiscation.

The source of this stunner is a document seen be Reuters, which describes how the EU is looking for ways to "wean" the 28-country bloc from its heavy reliance on bank financing and find other means of funding small companies, infrastructure projects and other investment. So as Europe finally admits that the ECB has failed to unclog its broken monetary pipelines for the past five years - something we highlight every month (most recently in No Waking From Draghi's Monetary Nightmare: Eurozone Credit Creation Tumbles To New All Time Low), the commissions report finally admits that "the economic and financial crisis has impaired the ability of the financial sector to channel funds to the real economy, in particular long-term investment."

The solution? "The Commission will ask the bloc's insurance watchdog in the second half of this year for advice on a possible draft law "to mobilize more personal pension savings for long-term financing", the document said."

Mobilize, once again, is a more palatable word than, say, confiscate.

And yet this is precisely what Europe is contemplating:

Banks have complained they are hindered from lending to the economy by post-crisis rules forcing them to hold much larger safety cushions of capital and liquidity.


The document said the "appropriateness" of the EU capital and liquidity rules for long-term financing will be reviewed over the next two years, a process likely to be scrutinized in the United States and elsewhere to head off any risk of EU banks gaining an unfair advantage.

But wait: there's more!

Inspired by the recently introduced "no risk, guaranteed return" collectivized savings instrument in the US better known as MyRA, Europe will also complete a study by the end of this year on the feasibility of introducing an EU savings account, open to individuals whose funds could be pooled and invested in small companies.

Because when corporations refuse to invest money in Capex, who will invest? Why you, dear Europeans. Whether you like it or not.

But wait, there is still more!

Additionally, Europe is seeking to restore the primary reason why Europe's banks are as insolvent as they are: securitizations, which the persuasive salesmen and sexy saleswomen of Goldman et al sold to idiot European bankers, who in turn invested the money or widows and orphans only to see all of it disappear.

It is also seeking to revive the securitization market, which pools loans like mortgages into bonds that banks can sell to raise funding for themselves or companies. The market was tarnished by the financial crisis when bonds linked to U.S. home loans began defaulting in 2007, sparking the broader global markets meltdown over the ensuing two years.


The document says the Commission will "take into account possible future increases in the liquidity of a number of securitization products" when it comes to finalizing a new rule on what assets banks can place in their new liquidity buffers. This signals a possible loosening of the definition of eligible assets from the bloc's banking watchdog.

Because there is nothing quite like securitizing feta cheese-backed securities and selling it to a whole new batch of widows and orphans.

And topping it all off is a proposal to address a global change in accounting principles that will make sure that an accurate representation of any bank's balance sheet becomes a distant memory:

More controversially, the Commission will consider whether the use of fair value or pricing assets at the going rate in a new globally agreed accounting rule "is appropriate, in particular regarding long-term investing business models".

To summarize: forced savings "mobilization", the introduction of a collective and involuntary CapEx funding "savings" account, the return and expansion of securitization, and finally, tying it all together, is a change to accounting rules that will make the entire inevitable catastrophe smells like roses until it all comes crashing down.

So, aside from all this, Europe is "fixed."

The only remaining question is: why leak this now? Perhaps it's simply because the reallocation of "cash on the savings account sidelines" in the aftermath of the Cyprus deposit confiscation, into risk assets was not foreceful enough? What better way to give it a much needed boost than to leak that everyone's cash savings are suddenly fair game in Europe's next great wealth redistribution strategy.

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
JimS's picture

Sorry, Sir. I have no fucking "class envy", so.... fuck-off, asshole.

dexter_morgan's picture

yeah....sure you don't LOL

lasvegaspersona's picture

Dice's schtick is getting old, anyone can find idiots walking down the street, they are everywhere. But just because they may not know what is important to him does not mean they don't have a grasp on what is important to them.

Vooter's picture

"Class envy is alive and well on ZH..."

Reminder: The guillotine blade doesn't know or care why it's falling...

gwar5's picture

Only after confiscation of all personal wealth of the masses will they 'invent' cutting back on socialism and call it 'Sustainable living'   aka ..... draconian rationing.






Dollarmedes's picture

So they're going to confiscate the money and give it to the people that caused the crisis, in order to avert the crisis they caused. Also, there's no guarantee they'll be able to use this money to avert the crisis they caused, since they already have a track record of failure by wasting the original money.

That outta work out just fine.

Amagnonx's picture

It was just a blatant theft in the first place, all the so called 'crisis' talk was just to provide cover for the looting.

notadouche's picture

What happened to the trillion plus dollars the Fed funneled to European banks in the latter part of 2012? At least thats what I remember reading on ZH.

lakecity55's picture

Apparently, it all went for hookers and blow.

layman_please's picture

but that's good for the economy, right?

Mesquite's picture

Is it true that Corzine is going to manage myRA..?

kchrisc's picture

"We stole it and you might get it back." has now become "We're just going to keep it."

Conax's picture

There you go, getting all wee-weed up about a one shot tax deal.  Your stocks will go so high you'll be saying, "tax me again- harder this time" when you get a gander (.)(.) at your new paper worth.


Little Boomer's picture

I thought Europeans were better educated than us, haven't they read about the French Revolution and stuff?

dexter_morgan's picture

better propagandized perhaps, but not necessarily educated

silverstud's picture

This time we won't take out "Royalty" we will go to the bone and take out Rothschild, Rockefeller, families etc as well as their lieutenants at JP Morgan, Morgan Stanley, Bank of America, Citbank etc... 

It ain't going to be pretty - but neither is what they HAVE DONE TO US!

Oh.. and the NSA will work for the people and root out every one of these slimy bastards!

Can see the drone lining up a limo in New York right now!

Anarchy before civilisation resets without these blood suckers

slightlyskeptical's picture

If the NSA actually was able to rid us of these beasts, I might take a little different view of them. Unfortunately I think they use their knowledge in order to further their own agenda and that it has little to do with helping the people.

The Wisp's picture

So if we all just took our money out of the Banks, and didn't buy any Paper Anything...

  you know  just shrug and walk away..

SAT 800's picture

Wow. Get back to basics; it's not a crisis; it's just normal result of spending what you don't have. There's no "temporary gap" they can span, or get to the other side of; there's just moar spending moar than they have. "The trouble with Socialism is you run out of other peoples money to spend"---Margaret Thatcher.

bidaskspread's picture

You mean they can go after the foriegn companies deposits who are trying to avoid taxes. Interesting and sounds like a joint US effort. Just like Cyprus and the Russian investors.

silverstud's picture

Bought another 5 kilos of PHYSICAL gold and 10,000 oz of PHYSICAL silver from the Perth Mint last week.

Who needs the ECB, IMF et al these fuckers? All the banks do is FUCK you

Get with it!!!!!!!!!!!!!!!!!

PS Its official - the Perth MInt running low on the PHYSICAL



Tinky's picture

Another five kilos? Where do live again?

Amagnonx's picture

Did you buy it physically at the mint?  My friend went there recently, and they treated him like a terrorist - gave him the full treatment, everything save the anal probe - and then he still couldnt get silver.


Also - doesnt Perth Mint have shocking premiums?

lakecity55's picture

*Ahem,* I have a spare safe you could put that in. Just sayin.

ZeroPoint's picture

I guess that puts you on the Queen's list of homes to be raided when the collapse happens.

lasvegaspersona's picture

ya that f'n Draghi refuses to destroy the Euro like Ben and Janet have the dollar...

I'm betting that this could be a ploy to get mo money from the Fed however because if they scalp the citizens of the EZ it would be a signal to savers everywhere to get out of

imbtween's picture

how is that "redistribution" when it's used to plug liquidity holes at banks? That's theft of my wallet to cover the vig at your casino and nothing more.

Typing Typer's picture

Ein Volk, Ein Reich, Ein Bank Account

Jack Burton's picture

The EU is an odd mix of Soviet Communism, and out and out corporate fascism. The EU was founded as an extension of European Corporations, an enforcement tool for corporate power. But along the way, the Red Communists joined in with the EU idea, as they saw a perfect enforcement platform for a soviet socialist social agenda. Forced integeration and destruction of all culture that was once considered northern European. The corporate fascists favor open borders to cheapen local labor, the reds favor it to enforce the destruction of the cultures they so hate. So, EU, perfect match of Soviet Union and Nazi Germany. Both allied for common goals. Now, there are those who love this new EU and it's power centered in Brussels, as corporations have never wielded such power, never had such access to cheap labor and never had such ability to ignore elections of local home rule. Lets hope for one race, one culture, all centered around the dictatorship of the EU whose only goal is increased corporate profits and all powerfull banks, and the scum bankers who now own Europe and are seeking to own Ukraine as an added little bonus. What Hitler could not do with the entire German army, the EU can do with 30 Euro a day bribes to their fascist protestors and assorted bribed fools. By bribed fools, I mean those liberal elites the EU and USA fund for life in return for handing over of nations to the EU fuck machine,

Mr. I-N-The Sky's picture

Jack, what is the difference between Moscow, Brussels, or D.C.? The languages?

What nation is more Fascist than the US? The US is more fascist than Hitler's or Mussolini's governments. At least the people there were under dictatorships. In the US we actually vote our Stalins in power. And then keep em in powers for decades.

Banks control the most powerful nation in modern time and we're talking about other nations popliteal flaws.


Gr8taters's picture

Why bother with reflation when infation and deflation gut the middle class?

Do the Central Banks understand that their very existence is only to serve the 1%?

MontgomeryScott's picture

Let me get this correctly, please.

"the savings of the European Union's 500 million citizens could be used to fund long-term investments to boost the economy and help plug the gap left by banks since the financial crisis, an EU document says."

The E.U. as a WHOLE had some bankster-cocks gang-rape and penetrate them and stretch them open. In order to staunch the bleeding from their orifices after they got done, they (the population of the E.U.) are told that they ( the E.U. population) WILL have to stuff some absorbent materials ('TAMPONS', or 'LONG-TERM INVESTMENT VEHICLES) in their assholes, mouths, and vaginas so that the BLEEDING and WOUNDS will not METASTASIZE and cause DEATH from being BLED OUT.

Did I miss something, here?





lasvegaspersona's picture

I think you are missing a point. It is the wealthy that get fleeced by the poor (and their polliticains). I'll grant you that bankers are doing OK but throughout history it is the lenders who get slaughtered as politicians ruin the currency and thus the savings of all net producers. The poor and the debtors are the ones crying for easier money. If the EU goes through with this it won't be the poor who suffer. It will be done to keep the government goons on the payroll and the benefits coming a bit longer.

Pareto's picture

He's not missing the point as much as your point is an additional, but related, caveat.

Johnny Cocknballs's picture

The wealthy get fleeced by the poor, do they? Banks suffer from the deval of fiat, is it?


You may very well have turned in the dumbest comment I've ever read - anywhere.

Joe A's picture

The EC has been having its eye on the savings of EU citizens for some time now. And more importantly on the pension funds of the rich countries.

The EC is king in Europe. Oh, there is the EP and the council of European member states but the EC has more than executive powers. A few days ago the EU countries decided to ban the introduction of a GMO after the EP rejected it already. But the EC can still decide to introduce it anyway. And it is all legal because they put it in the EU constitution treaty. That is how democracy is in the EU.

Vooter's picture

Time to preheat the ovens!

GetZeeGold's picture



I hope you purchased your oven from a licensed outlet.....those things are patented.


No.....I'm not kidding.

AgentScruffy's picture

Crikey. Great find, Zero Hedge.
So this creates a picture of a Europe beyond being ravaged...the pending pension crisis is nightmarish enough, but then they will go lose whatever pension savings actually do exist.

monad's picture

Ayn Rand nailed it. Antilife. Sanction of the victim. The politics of pull. Scientism. Aristotelean rationalism v. Platonic sophism + whips.
Noone deserves whats coming. It didn't have to be this way.

Johnny Cocknballs's picture

Why is it that the people who talk ceaselessly about Ayn Rand do so?

Because they haven't read anything else.  Ayn Rand is to Philosophy what Justin Bieber is to Philosophy.

There is much in her writing that is original and profound, but the bits that are original aren't profound, and the bits that are profound aren't original.