I've been doing this analysis in April for many years, and I have always found it both fascinating and mind-blowing. Feel free to check out some of my older posts on the topic.
- 2012 Eurozone interest payment from 1995-2010 : €4.3 trillion
- 2013 European Public Sector Debt and Interest Payments for 2012 - €11 trillion debt, €380 billion in interest
- 2014 European Public Sector Debt and Interest Payments for 2013
- 2015 European Public Sector Interest Payments - €354 billion in 2014 - €6.66 trillion over 20 years
- 2016 European Public Sector Interest Payments in 2015 - over €325 billion in 20. €7.18 trillion since 1995
- 2017 European Public Sector Debt and Interest payments 1995-2016
- 2018 European Union Government debt now over €12.7 trillion
- 2019 Eurozone debt reaches €9.86 trillion - and interest payments now total €6.4 trillion since 1995
Note that sometimes my blog headlines talk about just the Eurozone figures, and sometimes it's the for the European Union. Anyway, I trust no-one will claim that I haven't been trying to draw attention to this!
A key figure in the latest set of data is the finding that Eurozone public sector debt now exceeds €10 trillion (€10,022,826200,000 to be precise) - up 0.92% on 2018. If we include all 28 countries in the European Union, the total debt is now over €13 trillion (€13,053,825,900,000), up 2% in a year.
A few countries have actually managed to get their debt levels down a bit. Sweden, which has its own currency, got its debt level down by 5.93% - well done Sweden. Within the Eurozone, the most successful countries have been the Netherlands (-2.68%), Austria (-1.70%), Slovenia (-1.48%) and Cypress (-1.40%). But, amusingly, Greece (-1.09%) actually did better than Germany, which only reduced its debt by -0.75%. But Lithuania, Luxembourg, Romania all had double digit percentage increases in debt, while French government debt increased 2.82% to reach €2.38 trillion. Meanwhile, the UK's debt also increased 2.92% to reach a record £1.892 trillion.
The tables also provide all these numbers in terms of GDP, but frankly, I find it more interesting to measure how things are going in hard cash numbers. Otherwise, you might be tempted to say that Germany's debt is minor, because it's a mere 59.8% of its GDP, compared with 98.1% for France, 117.7% for Portugal, 134.8% for Italy and 176.6% for poor old Greece. But Germany is has been over €2 trillion in debt every year since 2014. Is that something to be proud of?
The critical importance of these massive debt levels come in to sharp focus when you look at the other fascinating information provided in the new data - the staggering amounts of taxpayers' money that gets sent to banks, pension funds and the other rich investors who currently hold all our debt, and just have to sit back and wait for the money to arrive.
In 2019, Eurozone taxpayers handed out a generous €194,383,000,000 to these groups in interest payments. Now, I suppose the good news is that the number is down 8.66% on 2018. Some would argue that this is thanks to all the bond purchases made by the European Central Bank (via the secondary markets). This has meant that for some countries, interest rates on national debt has even gone negative. This seems to have been particularly successful for some countries. Sweden's interest payments are down a whopping 23%. Within the Eurozone, Ireland's payments dropped by an impressive 16.16%%, France's by 13.4% and Germany's by 13.18%. I suppose that does count as good news.
But the fact is that even these reduced payments are a total scam.
Add up the total interest payments made over the period from 1995 to 2019, and you discover that this brilliant system has allowed €6.59 trillion of tax payers hard-earned money to be transferred to banks, pension funds, and rich investors. And, what may I ask did they do in return for these generous handouts? The simple fact is that they do absolutely nothing. We got nothing whatsoever of value from those payments, which only take place because the entire system has been rigged to allow the enormous parasitic tape-worm that is the financial sector to feed itself and its collaborators with our money.
Once you have realized that Banks can lend money that they don't have (see the Bank of England's revealing statement in 2014 if you don't believe it), it becomes obvious that the Lisbon Treaty's rules designed to force our governments to borrow "money" from commercial banks is a complete scam.
The amount of money that has been ripped off in this way since 1995 amounts to €20,000 for every single man, woman and child in the Eurozone. Imagine how much better we would all be if we had been able to get rid of this insane system 25 years ago.
It's also "amusing" to note that if you compare this colossal waste of our tax money with the increase in government debt over the same period, you make another fascinating discovery. For the Eurozone, government debt has increased by €5.17 trillion since 1995. That number is a mere 78.5% of the amount paid out in interest charges!
Put simply, ALL the austerity programs that our governments have imposed on us over this period, including obviously, the bailout of the banking system following the financial crisis in 2007 were a complete sham. The real reason for all that austerity was to ensure that the financial sector and its associates could continue to stuff themselves with our hard-earned money.
Now, with the current Corona virus crisis, there have been increasingly loud calls for the European Central Bank to provide direct funds to governments to help them deal with the crisis. After all, Mario Draghi, the ex-Goldman Sachs Director who was appointed at the head of the ECB, managed to create €2.7 trillion since 2015 that he used to artificially pump asset prices on the financial markets, on the pretext that this was designed to get inflation to the "optimal" value of 2%. (Of course, what it actually did was to make a lot of rich people even richer). And Christine Lagarde, the new head of the ECB, has turned on the pumps again, with a further massive injection.
But, when it was proposed that the money should be provided directly to governments, the vast majority of deputies in the European Parliament voted against. They are either ignorant (quite likely), or being paid by the financial sector to keep the current system in place (not impossible, at least for some of them).
Surely, the time has come to put an end to this insanity. The ECB should use its money creation power to directly cancel Eurozone government debt, and thus reduce this ridiculous waste of tax-payers money.
Of course, Germany and the Netherlands may continue to try and block this by arguing that they don't want to foot the bill. But the solution to that one is very simple. The payments made by the ECB to Eurozone governments should simply depend on the number of citizens in each country. If the injection is €3.2 trillion (a similar amount used by the ECB to boost asset prices with precious little positive effect for citizens), then that would mean €10,000 for every citizen in the Eurozone. Germany and the Netherlands could not possibly claim that "they" are paying for it. They would get their fair share, like every other country.
The usual claim that "printing" money causes inflation can easily be avoided. Governments could be obliged to use the funds to buy back debt, rather than spending the money. If so, the inflationary effect would be zero. It would immediately release billions of extra money to pay for more useful things than keeping bankers and other rich people rich, and financing pension funds in the US and Canada. How about using the money to fight the corona virus crisis? Or tackle climate change? Or provide a basic income to eurozone citizens.
Of course, I would say that there is no reason to stop at €3 trillion. If we would force the ECB to create the €10 trillion needed to wipe out all Eurozone public sector debt, and then we would never again have to use our hard earned cash to feed the finance sector's parasitic monster. And it would demonstrate once and for all that there is a simple way to get out of the global debt crisis. According to the latest edition of the Insitute of International Finance's Global Debt Monitor, it topped €255 trillion at the end of 2019, and is now "40% ($87 trillion) higher than at the onset of the 2008 financial crisis—a sobering realization as governments worldwide gear up to fight the pandemic". Nobody seems to have made any sensible suggestions about how to deal with this.
Hopefully, you will be able to see that there is a simple solution. And that starts with massive debt cancellation of government debt via Central Banks, both in Europe and the developing world.
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