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Europe Will Implement Both Border and Capital Controls in the Coming Months

Phoenix Capital Research's picture




 

Europe is going to begin both capital and border controls.

 

This is not some idle conjecture. We know that the political elite in Europe are only too happy to ignore the rule of law whenever the crisis gets too out of hand. Indeed, this won’t even be the first time that this happens in the EU.

 

Back in March of 2012, when the EU Crisis first began to spin out of control, then Prime Minister of France Nicolas Sarkozy openly called for the renegotiation of the Schengen Treaty: the treaty that established the 26-nation EU as a “borderless” entity in which individuals could move from one country to another with little difficulty and which also made trade among EU members easier.

 

France was not alone either. A few months later, both France and Germany proposed imposing border controls in June of that same year.

 

            A Vote of No Confidence in Europe

 

Germany and France's joint proposal to allow Schengen-zone countries to temporarily reintroduce border controls as a means of last resort might sound harmless. But doing so would damage one of the strongest symbols of European unity and perhaps even contribute to the EU's demise.

 

Germany and France are serious this time. During next week's meeting of European Union interior ministers, the two countries plan to start a discussion about reintroducing national border controls within the Schengen zone. According to the German daily Süddeutsche Zeitung, German Interior Minister Hans-Peter Friedrich and his French counterpart, Claude Guéant, have formulated a letter to their colleagues in which they call for governments to once again be allowed to control their borders as "an ultima ratio" -- that is, measure of last resort -- "and for a limited period of time." They reportedly go on to recommend 30-days for the period.

 

http://www.spiegel.de/international/europe/german-and-french-proposal-for-border-controls-endangers-european-unity-a-828815.html

 

What triggered such a move?

 

A GREXIT: the exact same issue that is once again being tossed around. Indeed, as the below story from  June 2012 shows, EU leaders were proposing capital controls, border controls, and even limiting the amount of money that could be removed from ATMs throughout Europe.

 

            Exclusive: EU floats worst-case plans for Greek euro exit: sources

 

European finance officials have discussed as a worst-case scenario limiting the size of withdrawals from ATM machines, imposing border checks and introducing capital controls in at least Greece should Athens decide to leave the euro…

 

As well as limiting cash withdrawals and imposing capital controls, they have discussed the possibility of suspending the Schengen agreement, which allows for visa-free travel among 26 countries, including most of the European Union.

 

http://money.msn.com/business-news/article.aspx?feed=OBR&date=20120611&id=15208663

 

If you think anything has changed in Europe between 2012 and today, you’re mistaken. Europe’s banking system and monetary union remain as fragile as they were then, if not more so.

 

The European banking system as a whole is leveraged at over 26 to 1. That’s the ENTIRE European Banking system leveraged at near Lehman levels (Lehman was 30 to 1 when it collapsed).

 

To put this into perspective, with a leverage level of 26 to 1, you only need a 4% drop in asset prices to wipe out ALL capital. What are the odds that European bank assets have fallen 4% in value in the last two years?

 

The European crisis is not over. And when the next round really hits, whether it be from Greece leaving the Euro or some other issue, both capital and border controls will be implemented.

 

Europe came this close to such a situation in 2012. This time around the ECB won’t be able to pull it back from the brink.

If you’ve yet to take action to prepare for the second round of the financial crisis, we offer a FREE investment report Financial Crisis "Round Two" Survival Guide that outlines easy, simple to follow strategies you can use to not only protect your portfolio from a market downturn, but actually produce profits.

 

You can pick up a FREE copy at:

http://www.phoenixcapitalmarketing.com/roundtwo.html

 

Best Regards

Phoenix Capital Research

 

 

 

 

 

 

 

 

 

 

 

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Wed, 02/18/2015 - 13:23 | 5799406 KnuckleDragger-X
KnuckleDragger-X's picture

Punishing the innocent, the sheep must be herded and any rogues must be made an example of. Every tiny bit of control they might lose must be prevented at all costs.

Wed, 02/18/2015 - 12:16 | 5798994 Comte d'herblay
Comte d'herblay's picture

hmmmmm...

Wed, 02/18/2015 - 16:45 | 5800553 Sudden Debt
Sudden Debt's picture

You can say that again! 

The bordercontrol station toilets haven’t been maintained for over a decade! 

I’m telling ya, it’s going to be a smelly thing!

And where are they going to find funding for new coffee machines for those stations!?!?!

 

There have been to many budget cuts to put people on every border crossing, they need a small army to close those routes now, especially all the new routes that have been build because... well there are no more borders so thre wasnt a need to funnel traffic into certain points.

Wed, 02/18/2015 - 18:14 | 5800922 boogerbently
boogerbently's picture

ONE Euro.

30 Eurozones ?

Wed, 02/18/2015 - 21:38 | 5801580 Self-enslavement
Self-enslavement's picture

World Zionist (WZ) power is “counterfeit money” power to enrich themselves and power gained from immoral pernicious usury, a plague on the human race that causes massive debt-slavery and starvation worldwide for all others, plus the power to tax all others and also the powers to evade all criticism, laws and agreements.

Wed, 02/18/2015 - 21:45 | 5801603 Stuck on Zero
Stuck on Zero's picture

I think the U.S. should allow Texas to put in border controls.

Thu, 02/19/2015 - 16:18 | 5804919 boogerbently
boogerbently's picture

Every state has the CONSTITUTIONAL right to govern itself.

ALL states should enact whatever laws needed to protect itself.

Anymore, it really does come down to splitting the union.

A Red United States, and a Blue United States.

Thu, 02/19/2015 - 16:20 | 5804927 boogerbently
boogerbently's picture

Or a 50 state "United States Zone", which would eventually need to kick the red states out for Greek like behavior.

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