Europe is going to begin both capital and border controls.
Germany and France’s joint proposal to allow Schengen-zone countries to temporarily reintroduce border controlsÂ 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.
A surprising news, especially considering constantly promoted strategy of european community. Apparently donor countries like Germany and France see future differently than Greece or Spain. Anyway, with these rumors, Brazil seems the best place to relocate and live… Â Keep reading.
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 SÃ¼ddeutsche Zeitung, German Interior Minister Hans-Peter Friedrich and his French counterpart, Claude GuÃ©ant, 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.
What triggered such a move?
A GREXIT: the exact sameissue that is once again being tossed around. Indeed, as the below story fromÂ June 2012 shows, EU leaders were proposing capital controls, border controls, and even limiting the amount of money that could be removed from ATMsÂ throughout Europe. Â Â Â Â Â Â
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 euroâ€¦ 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 Â If you think anything has changed in Europe between 2012 and today, youâ€™re mistaken. Europeâ€™s banking system and monetary union remain as fragile as they were then,Â if not more so.
TheÂ European banking system as a whole is leveraged at over 26 to 1. Thatâ€™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?