Friday, July 18, 2025

France's Budget Battle Exposes EU's Centralist Overreach

   The fight between unelected bureaucrats in Brussels and Governments with impossible budgets conundrums is heading to a clash. 

   You cannot get out from a debt bubble by adding more debt on top of it, hoping that somehow growth will appear magically. 

   Because the US is in charge of the world currency, it can afford, for a while, a level of profligacy that Europe cannot. The continent cannot pay for green energies or to rearm and still maintains health care and pensions. Something will break soon. And like Japan, the signal that we have reached the limit will come from the bond market when yields start rising vertically. (whatever the Central banks do.)

   And so, what Russia is doing in Ukraine, beyond destroying the Ukrainian armed forces is indirectly bankrupting Europe (with the connivance of the US!)

   Likewise China is now mired in a gigantic real estate bubble from which the country struggles to find an exit. There is none as Japan proved 30 years ago. A bubble by definition is necessarily larger than whatever special budget a country can muster. All the money will go to pay back the debt, new investments will starve, and still it will not be enough. 

   And neither is the US economy out of the woods. re-industrialization is a pipe dream. It will happen under the form of localization but it won't have the expected effects on the economy. As for reducing the US deficit, if it really did happen as Trump expects, it would starve the rest of the world of dollars and therefore financing accelerating the fall of the currency as a share of market transactions.

    The economy and especially budgeting is a complex balance of contradictory factors which you must all keep in check at all times like a plate balancing act. Deficits and trade imbalances tend to make the act more difficult, and then the plates start falling...   

France's Budget Battle Exposes EU's Centralist Overreach

In an effort to relieve pressure from France’s ballooning debt crisis, Marine Le Pen, leader of the Rassemblement National, has called for a reduction in the country’s contribution to the European Union. On the very same day, Brussels unveiled its colossal €2 trillion mega-budget. A tale of chronological dissonance.

It was only a post on “X” - a fleeting tweet from Marine Le Pen responding to the heated French budget debate. A few lines that would normally disappear in the fast-moving timeline and social media noise without ever imprinting themselves on public consciousness.

Le Pen tweeted on July 16:

“François Bayrou wants to implement a ‘white year’ - in other words, a draconian fiscal and social austerity program - to save seven billion euros. That’s exactly the amount by which France’s contribution to the European Union has increased. How can such waste be tolerated, when the French voted overwhelmingly in the EU elections to freeze this spending by supporting Jordan Bardella’s list?”

Brussels as Fiscal Pressure Valve?

France will contribute a net €14 billion to the EU budget this year. But what matters here is the timing of Le Pen’s tweet. Her long-standing disputes with Brussels are well known - especially since her suspension from upcoming French elections.

Her call for budget cuts isn’t new. But the renewed demand gains weight by coinciding with the unveiling of the EU Commission’s new budget under President Ursula von der Leyen.

Reality vs. Ambition

The Brussels central apparatus has drafted a budget of €2 trillion for the years 2028 to 2034 - a staggering display of fiscal gigantism. It's an anachronism, considering the financial catastrophe looming over many EU member states, not least France, which is headed for a deficit exceeding six percent.

Given the debt situation in Southern Europe, it's increasingly difficult to reconcile Brussels’ fiscal ambitions with economic realities on the ground.

Strikingly, the reaction to Le Pen’s criticism was muted. Both Brussels and the French government coalition remained silent - arguably a smart media strategy. A public budget debate at this point would only stir a hornet’s nest better left undisturbed.

Populism Included

Le Pen’s assault on Brussels’ budgetary authority carries deep-seated resentment. As the EU’s second-largest net contributor, France is a structural pillar of the Union’s financial framework. Should a heavyweight like France or Germany step out of line and reject the official narrative, the fragile EU edifice would begin to crumble.

We are already witnessing a resurgence of national-conservative parties - Fidesz in Hungary, SMER in Slovakia, the governing coalition in Italy, and Geert Wilders in the Netherlands - all forming a serious opposition to Brussels-style centralism. Le Pen’s laconic tweet could pack explosive potential. Could these parties define a shared vector of attack? Have they identified the bloated EU budget as a weak spot?

It’s high time to recalibrate the power dynamics between Brussels and the legitimate national interests of member states. The fiscal gigantism unleashed under von der Leyen’s leadership is steering the EU into dangerous waters. Centralized overreach, grotesque climate policies, and open-border radicalism are fraying Europe’s internal cohesion.

Brussels Seeks Autonomy

The EU Commission is playing high-stakes poker. The €2 trillion budget - about 1.26 percent of EU GDP - reflects a jaw-dropping 58 percent increase, or €750 billion. That raises urgent questions about financing. Brussels is morphing into a Leviathan - growing unchecked, with gaping democratic deficits, and a leadership ambition that now breaches into the sovereign spheres of nations and their citizens.

The truth is: most EU member states simply cannot afford this fiscal expansion. This appears to be Brussels’ attempt to coerce financial and tax sovereignty - a political extortion play: "If you don’t open the door to Eurobonds, you’ll foot the bill yourselves!"

The recurring debate around Eurobonds - possibly repackaged as war bonds to finance the Ukraine conflict - as well as new revenue tools like taxes on multinational corporations or expanded CO₂ trading, offer a clear glimpse into what Brussels has in store.

Expect two developments: the consolidation of national debt under the EU Commission’s umbrella and the continued monetization of new debt via the European Central Bank. Alongside Brussels’ fiscal power grab, we are likely to see the introduction of a digital euro - the perfect capital control mechanism, an optimized surveillance currency enabling central Brussels to tighten its grip over European economic life.

Fuel For The Opposition

Here’s a prediction: this political strategy will only strengthen opposition forces across Europe. Given the brewing budgetary crises in many states, the EU is headed for major internal battles over its financial direction. A coordinated payment boycott would be the ideal rallying cry for national conservatives - a public relations slam dunk if the debt spiral accelerates.

It is entirely possible that Le Pen’s tweet was designed — in coordination with Brussels’ critics - to set the tone for what’s coming. And a storm may be gathering on the horizon for Ursula von der Leyen and her allies. The myriad unresolved crises stirred up by Brussels’ migration policies and destructive climate agenda have created the ideal conditions for high-impact political counteroffensives - especially against a Commission whose arrogance is wearing thin with a growing share of the European electorate.

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