Europe is in big troubles. Big government spending programs, lack of technological leadership, lack of innovations and rapidly changing demographics are making Europe poorer by the day. The ECB has a solution for all of this: more spending. It never worked, but the ECB says it will work.

Now Europe is preparing for a new round of stimulus. After all the European economy is not doing great. The economic powerhouse, Germany, is in negative grow. France is not solving its problems and the Brexit is likely to reduce economic activity as well.

So let’s have a look at what happened to stimulate the economy. Keep in mind that this programs all failed.

  1. In 2008 a 200 billion Euro program was launched. To finance infrastructure and key programs in Europe. To create millions of jobs;
  2. 2014 a 424 billion Europe to create an additional 1,3% additional economic growth until 2020;
  3. Energy directive a ten of billions program into renewable energy;
  4. A 2 billion monetary expansion program by the ECB. Which is invested in, mainly, Southern Europe government bonds;
  5. Liquidity injections in the financial markets in 2014, 2016, 2018, 2019;
  6. Negative interest rates by the ECB to stimulate lending to consumers and producers. At the same time it allows the financing of government programs;
  7. Extradoniary fiscal policies by 19 Eurozone member states.
  8. Negative interest rates by the ECB to stimulate lending to consumers and producers. At the same time it allows the financing of government programs;

Think about this. Many people say that the situation in Europe is not so bad. But all the policies that they had and all that money. Things are not so bad. So let’s have a look at the consequences of the different policies.

The 2008 program caused enormous spending. But the money is wasted. Many roads in Europe are going to nowhere. At the same time, the economy did not grow.

If we look at the current economic situation we can say that economic growth just comes from the 2014 stimulus program. Or did the program not work?

The European push towards renewable energy is creating some really interesting side effects. The maffia is full of renewable energy. Your tax money is helping the maffia getting richer. Do you like this new method of spreading the wealth?

The monetary stimulus program powered more bond purchases. It boosts bond purchases by financial institutions. Those institutions were supposed to put the money into the real economy. But they decided to put it in government bonds.

When the ECB decided to provide liquidity injections the ECB kicked the can future down the road. They are supposed to provide stability. But they decided to create more instability.

The negative interest rates caused destruction on those who have any assets. Retirement funds are into massive problems. Keep in mind that Europe is getting older. It would be good for Europe to simply have more wealth. But why would you save your money? You are not rewarded for it.

The fiscal policies by different Eurozone countries empowered competition between the Eurozone member states. But it also increased government control over the economy.

So with over 600 billion being wasted, we are heading towards some new rounds of waste.

So what will the latest stimulus result in? Let’s have a look at a Eurozone member whit big problems. Italy. The country average government is just 13 months in power. Well, the government bonds are resulting in negative yield. This means that you must pay the Italian government to be allowed to borrow money to them. When you are thinking about a good investment, are you then thinking about Italy?

So why do we need more stimulus? What we really need is less stimulus. What the ECB is doing is not what it is supposed to do: create financial stability. All they are doing is creating financial instability.

Let’s face it. It is very unlikely the ECB will move to any good policy.

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