” Strengthening Economic and Monetary Union: the Presidency will advance discussions on initiatives relating to banking union, in particular the establishment of a European deposit insurance system, and on deepening the union capital markets. In addition, it plans to start discussions on the amendments to be made to the directive and regulation on capital requirements, as well as on legislative proposals relating to the prevention of money laundering and terrorist financing. “.
This is what we find in a document that few people take the time to read and which is a bit like the political program that each country, which holds the presidency of the European Union, writes and publishes.
Today it is the turn of our Portuguese friends to preside over the destinies of Europe in Brussels.
And on page 17 of this Portuguese profession of faith, we find a very interesting little paragraph that evokes the SEAD.
Yes, the SEAD.
Among European and French mamamouchis, because nothing looks more like a technocrat than another, whatever the country or the times, we love to speak with acronyms. The pinnacle is reached by the mamamouchis, who specifically save money and even more so in Brussels. We have MES, ESCB, and other SME, ECB or TLTRO I can make you a Prévert list.
This time we therefore add the SEAD in our bag of acronyms.
SEAD is therefore the European deposit insurance system.
Currently, you have a deposit guarantee system in each country, it is a national system.
To build a federal Europe, therefore, a European system must be set up.
If we are not going towards more Europe, then the europathes of Brussels tremble at the idea that we are going towards less Europe.
The problem with this history of deposit insurance at European level is still the same.
If the rescue mechanism is European, it is always the richest and the most virtuous who risk paying for the bad guys in the class. It’s not false.
And since the good student is Germany, the Germans are always having their ears pulled by the other members of the Union who want more Europe, more solidarity, and of course, more German money. if necessary.
So as always in Europe, there will be the effects of announcements preceded by psychodramas and followed by gas factories passing off the creations of our enarques for simplistic mechanisms of simpletons.
Yes … we will have to pool the risks, without risking the German pennies by protecting them while still taking a little in the process but without this being too visible …
So we think of a “hybrid model”
Yes, it’s better than nothing, and by dint of being a hybrid Europe is still wobbly.
It still holds, but works very poorly.
The idea is to make the national deposit guarantee systems coexist with a central and European fund that would intervene in the event that the national system runs out of money. If the European Fund of Funds were exhausted, then the European Fund through the Single Resolution Board would be empowered to borrow from national deposit guarantee schemes through a compulsory loan mechanism…
Yes I know it is not clear, or even you did not understand anything.
When we try to fit the round into the square, it distorts the structures.
Do you remember the MES and other EFSF? These were mechanisms to save European countries from bankruptcy.
So we had a great idea. We had created a new thing in which the least bankrupt countries put money, so that the thing in turn could borrow money that no one had to save countries that really didn’t have any at all … Wobbly at will.
Besides, nobody talks about these things anymore.
Today the ECB directly prints the necessary sums and buys the bonds of states in the euro zone which otherwise would almost all already be bankrupt.
It will be the same with the SEAD.
We will first see them design something hybrid and screwed up, which will be unable to save anything in the event of a systemic crisis.
In the end, I can tell you already what will happen during the next European financial crisis.
Either the ECB will write the checks necessary to save the European Union and the euro, or the single currency will explode and there will be a disaster return to national currencies.
The choice, as always, will be political, because whether in France, or in other European countries, there are not enough Kopecks to guarantee your deposits and there will never be enough.
Because to have a guarantee, for each euro deposited in the bank, we would have to have one euro aside.
It would simply mean doubling the money supply.
A deposit guarantee is therefore an imaginary fiction and a pipe dream. It is impossible.
It’s a bit of a dahu hunt.
But it’s normal that in a world of Shadocks we hunt dahu …
It is already too late, but all is not lost. Prepare yourselves !