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Last week France asked for a "New Deal" with "Real Money" not fake EU promises.
France was a bit wary (and rightly so) over sleight of hand math from Jean-Claude Juncker, the new head of the European Commission.
Today we have the facts.
Juncker's €315bn EU Slush Fund looks like this.
95% Leveraged Magic, 5% Fund
- €16bn from the EU budget
- €5bn in guarantees from the European Investment Bank (EIB)
- €299bn is magic.
Supposedly, private money will come up with €299bn based on €5bn in guarantees.
Of course someone has to administer this action plan. So Juncker unveiled a new “investment advisory hub” run by "financial professionals" with direction from the European Commission and EIB.
After padding their own pockets, the group will decide which projects to undertake, no doubt based on kickbacks, bribes, and political favoritism to friends.
To make the deal even sweeter for their political cronies, the EU will offer a “first-loss” guarantee, where the EU money would absorb any initial investment losses in an effort to “crowd in” private investors looking for more secure upside.
Given that it's all funny money anyway, I have a question: Why not provide €50bn in guarantees raising €2.99 trillion in the process?
Mike "Mish" Shedlock