Last year the public debt of the euro area traveled around 13,000 billion. With a ratio compared to GDP close to 90%. A few months that seen in the light of today’s choices of Brussels and especially Germany are practically an era. The Bund, the title of State of Berlin, until the other day was considered the reference parameter at zero risk. The bar with which to measure the expenses of other countries. Now we enter a new world. Not that the previous one was ideal, indeed. Germany has imposed their rules and austerity for others for almost three decades. Without in any way negotiating on the large anomals it represented: the commercial surplus facilitated by the single currency. That balance around which the EU has been built is about to be reset. The attempt to change the German Constitution in favor of new debt will bring at least another 500 billion in burden, to which will be added (it is estimated) another 500 billion in the next decade. Not to mention that in parallel Ursula von der leyen He would like to add another 800 billion to finance the rearmament. Common debt? Reuse of other funds at the expense of cohesion and agriculture? These are themes and possible political rips. What matters for the purposes of the overall stability is that the ratio between the PIL debt will approach 100% this year and the Bund will become a title of state as much as the others. Yesterday the ten -year of Berlin exceeded 2.8% of performance. In addition, the zeroing of Germany’s tax policy is having a chain effect on the government obligations in euros and analysts expect returns that returns will increase, creating a pressure for other European governments to reduce long -term debt. Incognita lands that Europe has never experienced to date. Starting a path full of unknowns. To thank it will surely Donald Trump For at least three reasons. First, he is getting what he had already said to the Merkel government during his first assignment: spending more to stay in NATO. Second because the European debt will also be the American banks that will obtain, needless to say, higher returns on investments. Third because the bags will go up and use the US banks once again. And all this without considering the effect of any duties. Any why Trump Punta as we see every day at the negotiation. Europe can respond by raising the wall and going to the clash. America will lose us a little. The old continent will have a collapse of the GDP and therefore it will be even more difficult to support the enlarged debt. At the moment there is a road and it is not different from that indicated by Mario Draghi in recent weeks. It sounds strange said by him, given that in the past (if not in the recent one) it has never spent much to correct EU distortions. But it would be about reviewing all the regulatory and laces constraints that the Commission has fed. And use this reform to offer an alternative to duties. Yesterday interviewed by some newspapers, the secretary of American trade Howard Lutnick He attacked the EU but left a door open. “The key will be respect for our commercial partners,” he said. «The time has come to change the international economic model, in force by the Bretton Woods agreements. It is all a matter of reciprocity and equity: we will treat them as they treat. ” And this also includes VAT, the value added tax that in the eyes of Trump It is an illegal tax, a duty applied precisely for the purpose of penalizing US companies. Not to mention the regulations that brake the large multinational companies, in particular in the digital sector. The fines and stakes that the EU wants to put on the cloud and digital platforms in general. Yet Brussels continues to remain deaf on this. Von der leyen He should deny himself. Not only where he can make back seems to insist. It would be ready, after announcing a year postponement, to keep the decarbonization of the steel sector alive. The so -called Cbam. The aim would be to protect European manufacturers from dumping, making third countries pay the difference in production costs and thus encouraging them to align with the EU rules to avoid these duties. The final approval of the Council came in 2023 Washington already has the alternative: the global arrangement on sustainable steel and aluminum, or carbon.
In practice, a scheme that has more flexible rules aimed at creating a club of countries that will be able to bypass the iron rules of EU. It means that we will be cut out, and the EU steel is likely to stop. Without, you are no longer producers. And it is difficult to stay in the G7. When the US speak of reciprocity they refer to all this bureaucracy. Which would be eliminated. Before making debt, Germany should reflect on these aspects.
