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Europe Has Floated Border and Capital Controls Before… Just Three Years Ago

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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Mon, 04/20/2015 - 20:03 | 6012865 disabledvet
disabledvet's picture

How does one impose "border controls" on Greece again?

Mon, 04/20/2015 - 18:36 | 6012598 raywolf
raywolf's picture

if the european banking system is leverage at 26 to 1 and the euro just fell from 1.40 to 1.05.... they are already wiped out 10 times over....

people throw a lot of numbers about but never have the real numbers to back themselves up.

Mon, 04/20/2015 - 19:47 | 6012809 TradingTroll
TradingTroll's picture

Go back to flipping burgers. The EUR/USD rate would only have a 100% effect on bank leverage if 100% of European bank holdings were affected by forex moves which are unhedged. The opposite is also possible, burger flipper. If banks shorted the forex pair, say a year back, then leverage would have gone down.

Mon, 04/20/2015 - 16:51 | 6012178 SmittyinLA
SmittyinLA's picture

There fixed it.....

  A Vote of No Confidence in Europe (as if the EU is a democracy LOL) 

 

Former nations of 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.

 

Former nations of 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.

the EU doesn't give a shit about peon french and German "residents", they're less than US voters, they don't even have gun rights. 

 

 

Mon, 04/20/2015 - 16:47 | 6012151 SmittyinLA
SmittyinLA's picture

The border controls are only to keep Greeks in, not tax parasites out, mass 3rd world Socialist invasion will continue and increase!

 

 

Mon, 04/20/2015 - 15:30 | 6011773 we built this city
we built this city's picture

Same shit different day?

 

okay we know all of this- but when will the markets dive?

 

Youve been telling us this stuff since 2011-2 and since then markets soared more than 100%...

 

 

Mon, 04/20/2015 - 15:55 | 6011887 Stroke
Stroke's picture

"when will the markets dive?"

 

Stay tuned...no one knows the hour or the day

Mon, 04/20/2015 - 16:46 | 6012142 GuusjA
GuusjA's picture

@MinPres: "Ik word zelfs een beetje moe om iedere keer te zeggen dat ik geen commentaar geef in het belang van de voortgang van de 3e SpinozaGolf".  

 

http://www.ftm.nl/column/olli-rehns-einddoel/#comment-1024208819

 

‏@FD_Nieuws: "Een Grieks faillissement hoeft niet meteen een #grexit te betekenen, analyseert @MPNAdeBoer".

 

http://nos.nl/artikel/2031453-griekenland-schraapt-reserves-bijeen.html

 

Moederbedrijf TMG stelt dat er nog geen sprake is van formele plannen om journalisten aan te stellen die wel willen schrijven over de fundamenten van de 3e SpinozaGolf. De denkrichtingen die algemeen directeur Harry de Wit heeft gedeeld met de hoofdredactie zijn niet bekend gemaakt. 

 

http://nos.nl/artikel/2031457-onrust-redactie-telegraaf-over-plannen-tmg...

 

EU-President Donald Tusk heeft de regeringsleiders en staatshoofden van de 28 EU-landen bijeengeroepen om te praten over wat Europa kan doen om te voorkomen dat de Grieken de 'knuppel in het hoenderhok' gooien. De Pool verwacht 'geen snelle oplossingen', omdat het samenwerken met landen die weigeren een cultuur van waarheiddelen te omarmen de chaos alleen maar groter zal maken. 

 

Mon, 04/20/2015 - 14:52 | 6011557 Mister Delicious
Mister Delicious's picture

Fuck the EU.

Mon, 04/20/2015 - 13:03 | 6011190 Jonesy
Jonesy's picture

But the JWO told us the benefits of being in EU were easy travel between countries, now the Jews tell us we aren't going anywhere, nor is our cash?  

Mon, 04/20/2015 - 18:38 | 6012604 raywolf
raywolf's picture

they forget to mention that only easy travel around your living room was a permanent part of the deal..... beyond that you'll need a permit.....

Mon, 04/20/2015 - 11:28 | 6010925 KnuckleDragger-X
KnuckleDragger-X's picture

The Hotel EU, where you can check in but never leave. I'm waiting for the boat people from Greece to start arriving......

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