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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Racer's picture

Not confiscate

STEAL or ROB is much more appropriate

Robber Banksters

css1971's picture

It's quite clear that anyone with a large amount of money sitting in a bank account should very seriously think about taking it out as currency. Otherwise it will simply vanish and be turned into "preferred stock" in the institution.

The bigger the amount the more you have to lose.

Lore's picture

I once had a long conversation with a Russian woman who described childhood memories of her parents allowing her to play with piles of worthless Tsarist banknotes. Just sayin.'

Pee Wee's picture

First sovereignty was monetized and stolen through fraud, now individualism is next to be looted.

WW3 is fast approaching.  Dead bankers everywhere.

Fascism = globalism.

NOTaREALmerican's picture

Come on..   With guys like you running around how who we have EVER invented Teflon and the quantum computer?

Are you trying to tell me that Big-Gov investing in our children's future hasn't led to wonderous results?

The Wedge's picture

Whee, rhetorical merry go round. Whoa, I feel dizzy.

FlowerofLife's picture

Finally, some common sense.

And I'm not being sarcastic.

El Hosel's picture

Why would this not cause an immediate run on the banks?

NemoDeNovo's picture

I know this is OT, but is even Bit[shit]coin safe??????

So bit coin can be hacked, thought it was Bullet Proof............

Pagin fonestar

jmp esp's picture

You clearly do not understand what you're talking about. In the future, please refrain.

JustUsChickensHere's picture

if you ADD counter party risk to bitcoin by storing your coins under some elses control you are definitely engaging in 'unsafe money'.  Try keeping your bitcoins in offline or cold storage. No counter party risk then. Just physical security issues like Au or Ag.

Or even offline, in a 'brain wallet' ... not even physical security issues then  ... the only risk then is your own memory ... which is also dubious in the long run :-)

goldenbuddha454's picture

At some point the thought of not spending what they don't have might come in handy instead of confiscating other people's money to Fill The GAP!

Manipuflation's picture

Why don't they just come out and say "We own it all and we will give you what we feel you need"?  Not just in Europe either.  No thanks MyRA.  Let's get shit rolling for fucks sakes.  We have been bitching about these assholes for years and I'm not getting any younger here.  I know we don't want to be the ones to start it but something has to give here pretty soon don't you think?

The Wedge's picture

As I have said in the past...don't you love the politician speak. Anyway, I see this as a slow train wreck politically, socially and economically. I's all unraveling. And speeding up right at the end. Kinda like the new movie effects were it go's super slo-mo and then speeds up. I suspect that will be the time of great change. When the old crumbles you will see a structure that has already been put into place like, health care, militarization of the police, loss of economic freedom etc.. They just turn the key at that point. As that time nears and comes to pass the best chance we have is to snatch the keys away before they can turn the switch. They need the old to crumble and this will be the opportunity for real truth. Real freedom. That will be their weakest moments. If you're ready to "roll" now you'll become a terrorist in the eyes of the dumb masses. It's already happening. Plus uncle erNSA will know before it starts. This must be handled politically and socially. From a chess perspective we are in check very close to mate. Just my 2 cents.

CJHames's picture

Manipuflation ... I coulda swore I wrote your post, word for word.  I'm 52 now, still in reasonably good shape and ready for a fight, but those days are quickly slipping by.

The Wedge's picture

"to mobilize more personal pension savings for long-term financing"

Love the wording. Language games should be a new Olympic sport. So many possible competitors.

"we have to pass the bill to see whats in it" Nancy Pelosie

"poor people aren't necessarily killers" George W Bush

"raising the debt ceiling doesn't increase our debt" Barry Soterro AKA Barrack Obama

And one of my favorites: "if you own a business, you didn't build that" Barry 'strikes again' Soterro

"we don't know what we don't know" Donald Rumsfeld

And the word trickery gold medal winner is.....

smacker's picture

And in the UK, by far the most popular cliche used by the political elites and their armies of 'jobs-for-the-boys' apparatchiks when they screw something up beyond belief and waste billions of taxpayers money:

  "lessons will be learned".

Sadly, they NEVER learn any lessons because the consequences are invariably caused directly by policy.

This cliche is in full flow (pun) at the moment after widespread flooding in the West of England due to the Environmental Agency policy of not building flood defences or carrying out river dredging.

Randoom Thought's picture

They should probably confiscate corporate and hedge fund cash first.

Atomizer's picture

Great posts ZH members. Keep up the great work! Some days, I feel like a needle in a haystack. Great job tonight!! Whether you knew for years or just catching on. This has been the uphill battle regarding the Banking establishment creating the Venus Project. I have no desire to live in a government controlled utopia environment.

falak pema's picture

Charybdis and Scylla...

And may I add I have no desire to live in a neo-feudal, neo-liberal, neo-con environment run by Oligarchs who consider people as expendable and dronable variables on their global, dystopian chessboards; all apexed towards personal monetary gains using monopoly controlled markets to pump the fruit of labour out of each wretched soul on the planet. 

Government is their tinsel screen of legal respectability to hang the chad and proclaim Patriot Act as the solution to world wide terrorism of their own concoction. 

Know reality from fiction to claim the legacy of all those who died for freedom on earth.

PR Guy's picture


They've already basically started using peoples' pensions funds to plug gaps in government finances in Ireland.

Anyway, what do you expect in Europe when this is what they do for fun in France??


Apostate2's picture

But, But, Growth in Germany, France and the Netherlands beat economists’ estimates in the fourth quarter and Italy resumed expansion in a sign the fragile euro-area recovery is gaining traction.

Having a laugh. Must be why the banks and RE guys keep calling up.

GrinandBearit's picture

Bitcoin $310 (LOL!) 

Gold $1315


paint it red call it hell's picture

Dad was 9 yrs old in 1929 when, for his birthday, he was given a little bankbook for an account in his name with $40 that had been saved for him.

When his bank closed then reopened in late 1932 he withdrew the entire remaining balance. He had never touched the original balance himself but withdrew the $6 remaining.

By summer FDR had revalued gold, his $6 was worth roughly 30% less. He had bought a 22 rifle from a Sears catalog for $6 early that spring.

Nothing new under the sun, at least to those who history was not hidden from or revised for.

resurger's picture

Basel III!

The biggest fraud with LCR and NSFR