Submitted by Thomas Kolbe
The “credit pump” could rightfully claim its place as a symbolic flag of the European Union. With virtually unlimited access to the bond market, politics magically transforms an inexhaustible credit stream into political maneuvers and ideological wizardry. Through this manipulation of money, processes and institutions are transplanted into the real world that, under normal circumstances, could never have surpassed the fantasies and limits of political ideology.
Wind turbines in forests, fully electric cargo bikes in an industrial nation that destroys its own engines of prosperity in favor of an artificial green subsidy economy, plunging itself into trillions of euros in new debt – a historically unprecedented degrowth spectacle, which has not erupted into open revolt only because hundreds of thousands losing their jobs are somehow absorbed into the public sector or cushioned, if not sedated, by the largesse of the German welfare state.
The same applies to open-border policies. Here too, perpetual credit seems to lubricate a project designed to unlock new voter potential for the political left. This process becomes possible through the systematic destruction of monetary value. National debt is not merely a fiscal problem; it erodes the fragile economic fabric of society. Moreover, it sends the fatal signal that an overpowering actor like the state can override the limits of productivity, reason, and scarcity at the push of a button.
Thus, the so-called debt brake was a political paper tiger from the start: Germany abandoned the path of political seriousness long ago and joined the ranks of debt magicians. It has become a driving force in an ideologically overgrown swamp of debt, making the refinancing problems of heavily indebted Eurozone states increasingly visible year after year.
Leading the debt race this year is the magic duo Germany-France. Budget figures are falsified, accounting tricks like special funds have become the standard of self-deception. Both countries enter 2026 with new debt of roughly five percent each.
The overall refinancing requirement of the Eurozone stands at €1.5 trillion. These are the gross issuances of government bonds necessary to roll existing debt forward and finance newly incurred deficits.
This means around €100 billion more must be funneled into public coffers via the bond market. Will the legal framework be adjusted? Will major capital pools, banks, and pension funds be further coerced into the fiat credit system? Will the ECB once again step in massively as a buyer to dampen rising interest rates amid higher debt loads?
But how long can such a process sustain itself like a perpetuum mobile? When will the seemingly inexhaustible sources of the bond market run dry? The political camouflage will end when only the European Central Bank, as lender of last resort, keeps new debt liquid through massive market interventions. With each intervention, the money supply grows, along with doubts about the currency’s stability. Trust erodes, and the truth about the manipulation of interest rates, time preferences, and real costs – including the financial dimension of green transformation and migration into European social systems – can no longer be concealed.
This would be the moment of truth, the instant the house of cards of permanent debt starts to wobble. The crucial question is: which forces or developments could accelerate this process? Real resources for financing investments in the capital stock are limited. The state competes for credit to fund its social, climate, and military ambitions. It systematically displaces productive capital and lures scarce resources into unproductive channels with promises of returns, incentives, and subsidies. Growth dies; the nation’s prosperity diminishes.
If this is insufficient, additional credit is mobilized – if necessary, through central bank bond purchases. Meanwhile, pressure on the bond market intensifies: investors increasingly turn away from long-term government securities, while in the United States, the AI-driven economic miracle is heating up capital markets.
US tech corporations alone plan bond issuances of up to $360 billion this year to finance additional data centers and expand energy capacities. The European market is also under the sights of Microsoft, Google, Facebook, and others. Bonds worth €120–170 billion are expected to be placed on the Euro market, a growth of over ten percent compared to last year. The US economy is mobilizing all sources to anchor domestic growth with capital.
A tough competitor for sovereign issuers, as the private sector lures with dynamic business projects and generally higher returns.
How much additional capital will flow from Europe to the United States? How large is the negative effect triggered by this American capital vacuum in the EU, which must mobilize resources to fund growing welfare states?
Clearly, interest rates will gradually rise, making refinancing and debt service in Europe more expensive. Budgetary room will shrink further.
And it becomes obvious what no one talks about: the massive downward movement of the US dollar against the euro is now a trap. Every investment from a European perspective in the United States, with a prospectively rising USD, becomes more profitable and yield-bearing. The strong euro acts as a second tariff barrier and intensifies the suction effect of investment capital into the US.
The Eurozone, and thus the economically closely interlinked EU member states, are coming under growing pressure. Geopolitically dependent on their energy suppliers, they remain rigid toward the energy and resource giant Russia. Europe walks a narrow line between dependence and self-interest.
Europe is strong when it relies on its regional competencies and strengthens intra-continental competition. Only this way can business models, engineering skill, and ideas emerge to meet the strong competition from China and the US on equal footing and maneuver into a better strategic position relative to competitors.
Ideologically, patriotic-conservative forces are called upon to end the climate-socialist madness, stabilize budgets, and put an end to the disastrous open-border policies – time is pressing for fiscal consolidation and state downsizing, even if Brussels and Berlin see it differently.
State downsizing and consolidation may sound like political fairy tales, yet Europe should never be written off. The continent has repeatedly emerged from severe crises and self-inflicted civilizational ruptures renewed and reinvented.
Capital and cultural foundations exist. Perhaps the American capital vacuum will help bounce Europe’s cultural decay – financed by the debt printer – off the wall of truth in the bond market.
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About the author: Thomas Kolbe, a German graduate economist, has worked for over 25 years as a journalist and media producer for clients from various industries and business associations. As a publicist, he focuses on economic processes and observes geopolitical events from the perspective of the capital markets. His publications follow a philosophy that focuses on the individual and their right to self-determination.
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