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.

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Doom and Dust's picture

Where exactly does it say these types of alternative funding for European SMEs businesses will be involuntary? Even if practically any ROI will mean outperforming a savings account. 

Would love to be indignant too but prefer a factual basis.

ShrNfr's picture

"A picture illustration taken with the multiple exposure function of the camera shows a one Euro coin and a map of Europe, January 9, 2013." Thank heavens, and here I thought at first that the "Great Euro From Space" as about to squash most of europe. Note to Reuters, learn about potatoeslop.

ZeroPoint's picture

This will end the banking system as we know it. Even if the public knows nothing about the fragility of the banking system, once they confiscate, the public won't trust banks again for another 100 years. I see a Greek like, decentralized. cash-and-carry future for the whole world.



smacker's picture


You may be right. But it looks to me like this evil EU confiscation plan is intended (at least superficially) to fund state-controlled lending to SMEs precisely because the banks are failing to do it.

I can't see how it will reduce trust in the banks.

ZeroPoint's picture

Did you read the article? People will not use banks if their account balances are stolen.

Dewey Cheatum Howe's picture

If collect a pension you have no choice now do you. Your pension is automatically in the system whether you like it or not. They aren't going after the private savings (not yet anyways and not below the depositor's insurance limit either since they learned their lesson over that one with Cyprus). Anything not guaranteed private wise is going to be fair game which is exactly what one would expect as the system goes through it's death throes desperately trying get one more gasp of air before expiring.


Anyone sponging off the EU collecting a pension state or otherwise is going to forced to bail in the EU first which is actually how it should be. The plebs are going to get fucked no matter what but they benefit the least so as such should be lower on the food chain to bail in.

Bail out assumes remove from the system, Bail in means the opposite. If it is layered you bail in from next layer first then so on and so forth.

smacker's picture

Will that reduce trust and confidence in banks? or government? Perhaps both. hhmmm.

semperfi's picture

The banking system as we know it ended in 2008.  They've just been printing up a shitload of fiat since then to mask that fact.  Its been over for 6 years now, the smartest people knew it back then, and its just now starting to become obvious to the next level of aware people.  The sheep know something isn't quite right but they have yet to figure it out.

smacker's picture

"The banking system as we know it ended in 2008"

This is very profound, but essentially true.

The problem is that the elites and their fraudulent bankster cronies have no idea how to deal with the aftermath of a debt crises that they created. It's been clear to me for a long while that the only people with any money left are savers and pension investors etc. IE: the ordinary man in the street trying to look after his future well being.

This is the money the criminal elites are now focussed on stealing without realising that it will exacerbate the crises and likely cause further economic collapse, leading to civil unrest and probably war to divert attention away from multiple domestic crises.

The evidence that political elites are the cause of problems, not the solution could not be clearer.

smacker's picture

With pension fund confiscation and bank bail-ins, at this rate we'll all be penniless and dependent on the state.

Next will come a ban on criticism of our Dear Leaders.

Welcome to the fascist EU of Barroso, Rompuy and 27 member states.


This madness will only end when we start noticing the elites hanging from lamp posts.

d edwards's picture

It sounds like the Euro version of MyRA. Guess all f-ing socialists DO think alike.

semperfi's picture

The confiscations will continue until morale improves.

semperfi's picture

Its time to take the tax hit and cash out of your 401K, your IRA, ETrade account, etc,  and buy hard assets that are not an entry in a computer.  Anything stored on a flashdrive or hard disk will be taken with a few keystrokes.

samsara's picture

No, The TIME to cash out and take the tax hit was 2004 when Au/Ag were $400/$7 an oz.

Some of us saw it earlier.

jtg's picture

There is already a self imposed MSM ban on criticism of Obama.

monad's picture

The Hanging Man by PKD
a cautionary tale of lamposts

zippy_uk's picture

We know a song from Witney Houston about this don't we:

YOUR cash is MY cash and

MY debt is YOUR debt



sbenard's picture

Coveting and stealing on a societal scale. This is a recipe for capital flight unprecedented in human history. The consequences will be calamitous. I know that inspiration source. It is NOT a divine one!

And rest assured that this mentality is coming to America also! In fact, it's already here! Negative interest rates, endorsed by Janet Yellen, reflect the same disregard for the property of others!

Last of the Middle Class's picture

Coming soon to your 401K.

gaoptimize's picture

This is where the 10% and 1% are told they are no longer part of the club.

Peace is the x-axis's picture

It's not just EU looking to steal its citizens' savings.

"(Australian) Treasurer Hockey says government can't fund projects so workers' savings should be used" -

JiminGA's picture

Obama wants to do the same thing with MyRA.  And just like he nationalized student loans his next step will be to do the same with 401K's and IRA's, "investing" those funds in T-Bills, aka confiscation.

jtg's picture

Obama doesn't have the Constitutional authority to implement law that requires an act of Congress, but based on the unConstitutional acts he has already taken it's possible. Let him try it, and start a real revolution to run him and his sociopathic elitist friends out of the country.

JiminGA's picture

Obama wants to do the same thing with MyRA.  And just like he nationalized student loans his next step will be to do the same with 401K's and IRA's, "investing" those funds in T-Bills, aka confiscation.

moonstears's picture

In 2008/9 the US Senate punted around an idea about 401Ks morphing to guarenteed annuities for your protection. Is the MyRA they discuss the infancy of this? This is not JUST Europe. JMO 

edit: I see Jim an I are on the same page whn reading this.

superdave's picture

I had a 79 year old friend from Switzerland tell me that on January 2nd of this year he got a notice from the Swiss government concerning his pension. They told him that they had "overpaid" him for the past 19 years and would be deducting 40% of his pension to "correct" this mistake.

Coming to the USSA soon!  

Watchingtheweasels's picture

They're already doing that here.  They call it "means testing" for Medicare and deduct premiums from your social security check based on it.  When that doesn't yield enough, they'll eventually start saddling retirees with Medicare deductibles.  The number of regulatory ways that a theft-minded federal government can get to your assets is almost unlimited.

OldE_Ant's picture

lol Sounds like a great recipe for bank runs.

Should they decide to go after retirement savings.  I suspect even the 1% will be happy to buy a few guillotines to lynch the .1%.

Nothing short of banker and politician lynchings will ever stop any of this.


The great civil war of the citizens against governments is going to be bloody and violent as hell.   The longer we the people sit on our asses and take it, the worse it's going to get.

Currently the amount of debt being piled on worldwide basically equates to at least 50% slavery.  In the US it's quickly approaching 100%.   At some point there will be nothing left to take.  It will be at that point that manditory rationing, work allocations and other EMERGENCY measures will be put in force.

This isn't just an EU problem but a worldwide problem and there will be no place on this planet anyone will be able to successfully survive and hide.  There is no NEW frontier to run to this time.


SubjectivObject's picture

New capital mobilization for the peedons.

Old capital stabilization for the peeingons.

What's up with that?


Carl Popper's picture

I proly wouldn't mind wealth confiscation of the 0.01 percent. They got a bailout instead.

The collapse of the banks is the usual once every 70 year wealth redistribution.

Georgia_Boy's picture

This is where I can see the benefit of having savings in real assets that you have physical possession of. The socialist looters will happily nationalize your IRA, blow it on more welfare, and at the same time look down their noses at you and lecture you about your white privilege. But have the IRS go to old people's houses with guns and take your gold coins, and arrest you for resisting? That just looks bad on Youtube. Sure, they'll issue another Executive Order 6102, but there are people whom they enforce it on and people they'll leave alone, they have to keep up appearances.

RWR's picture

Now you know why their buying ll the bullets

NoTTD's picture

Worst aspect:  Leftist heads thoughout the West are nodding in approval.  Especially our Left.

FreeNewEnergy's picture

There are simple solutions, though not everybody is capable of making the proper moves.

Cases in point:

1. Negotiated a lease on 2 acres of farmland for $500. Lady said cash, in advance, no checks. No problemo, says I. Always happy to exchange non-traceable fiat bucks for income producing acreage.

2. Another lady had 2 of her 9 acres available for sale. Wanted $5K down and $18 total. Told her, cash lease, renewable, you keep the property. Also, since I want to put a camper there, which I could not according to zoning laws if I purchased the land (McMansions only, ya know), it's better for me, because the lady is allowed to have one camper on her property. Since mine will be the only one, this works, but it begs the larger question:

Aren't there too many laws and regulations standing in the way of commerce? Basically, the lady with the 2 acres for sale had to raise the price so high because the costs of redrawing the tax map lines (survey, etc.) were expensive (in the $3-4K range), and, of course, there's the capital gains taxes on that sale, with no "wash" because she's not buying anything else.

Bottom line, both of these property owners see the value in undercutting the "middlemen" those being the town, county, state, feds, who just want a cut of any transaction, in favor of a simple agreement - almost a handshake - between rational people.

These ladies will get even more than they bargained for because I am a pretty decent vegetable farmer and will give them some of the produce at no cost, just the way I am, and the way to keep "partners" happy. The government and the bankers get NOTHING. As it should be.

Also, check your city - if you live near or in a good-sized one with many vacant properties and empty lots. Here in Rochester, NY, they have a garden lot program, where the city allows you an 8-month lease on the land at NO COST, provided you maintain it, grow flowers or food crops and don't become a nuisance. I opted for three adjacent lots (total of 150 x130) in a fairly commercial section of the city (kind of out of the slum). Anyhow, waiting on approval, but I know I'll be spending a good deal of money on fences this spring and summer - to keep the deer, rabbits and other critters out in my country locales, and the inner city "foodies" (read: FSA) in the city. May be getting a big dog or two, also.

Best bets going forward, either own enough land to produce almost all of your own food, or lease some at cash prices. Anything you have left over, buy useful tools, vehicles, gold, silver, bullets. You know the drill.

moonman's picture

Yeah I am sure the terms of your "leases" will be upheld when TSHTF. Good luck with that

joego1's picture

Let me see, the hoards are comming and I have someone growing me food on my land that can help defend it. Whats my true problem here?

monad's picture

numerical superiority

CJHames's picture

A brilliant post, Free, thank you, and it gave me some ideas.  We've recently purchased two adjoining 5-acre plots here in NE TX, and me and my son built bult a 1600 sq ft house on the first five acres.  The first 5 cost $9800.  The second we had to give $13,500 for it (seller wanted $18,500, told him he was nuts). The house, paid for as we went with cash, cost us around $37,000 total, which included $2400 just to have power lines run to it, and septic and well costs, etc.  We now own a free and clear house.  We're allowed two resideces per lot, so we will build four total, one for each of our kids and their families.  

We're trying to buy the 10 acres (two 5-acre lots) directly behind us, which will give us a nice, sqaure 20-acre block, but we're about out of cash for now.  I like your leasing idea.  I just may try it for the additional land.

Also, I recently read about a man who leased right-of-ways from utility companies and muni's.  Areas such as the small buffer strips between major county roads and where property lines start (under power lines, for example).  He makes a very good living farming those strips, and it even gives him an area to set up road-side prduce stands right next to his mini-fields.  He pays a very paltry sum for the land because he is maintaing it for them.  Sometimes as little as $150-$200 per yr.  The land goes unused, and needs chem spraying for weed control, etc., so he's doing them a favor and making bank at the same time.


royal's picture

War is coming...


Long Golden Dawn and Jobbik

therevolutionwas's picture

I still cannot see the confiscation of IRAs and 401Ks as practical.  What happens to all the companies that the IRAs and 401Ks were invested in?  How would that work?  It would be easier for the FED to just print.

The Wedge's picture

Or trick you into giving it to them through MYRA. But the answer is they will do both. You are going to pay one way and another and another and another.

One World Mafia's picture

Scare into stocks

Crash the market

Scare into MyRA

Watchingtheweasels's picture

The Euro maintains its 52 week trading range of 1.2749 - 1.3882.

How an economic bloc can essentially openly (1) confiscate savings in one of its member countries and (2) admit to the rest of the world that they are going to do it again without crashing their currency and losing all credibility on the world stage is beyond me.

SmittyinLA's picture

Their currency is crashing, in sync with ours we're seeing huge inflation in portable commodities right now, and it will be sustained inflation for years with crashing wages. 

ArrestBobRubin's picture

This is a BOHICA deal:







abatis's picture

I wonder if the same people who drone children will torture for a Bitcoin wallet?