About two weeks ago, the European Commission threatened Spain and Portugal with cutting off the lending spigot if they did not re-adjust their budgets to reflect the 3% rule for deficit spending.
And since neither nation was able to follow through with this EC demand, on July 26 the Commission called for sanctions to be placed on the two Southern Eurozone countries as a means to force them into greater austerity and more 'fiscally responsible' spending.
“The European Union should suspend structural funds to Spain and Portugal after they failed to reduce their budget deficits to below prescribed levels, AFP reports citing a letter from the EU’s executive arm.
The eurozone finance ministers decided this month to start sanctions procedures against the two countries for breaching EU spending rules. Sanctions could be a fine of up to 0.2 percent of a country’s GDP and the suspension of commitments or payments from EU structural funds of up to 0.5 percent.”
— Russia Today
As part of the PIIGS nations who all became virtually insolvent following the 2008 Credit Crisis, Spain and Portugal have failed to come back from their financial straits over the past eight years, and remain in both recession and high unemployment despite efforts by the ECB to purchase hundreds of billions of their sovereign debt.
Yet problems with sovereign central banks in the Eurozone appear to be the least of the coalitions worries as over the past two days, two European banks are now preparing to engage in negative interest rates on individual and business accounts, setting the stage for a banking crisis that could once again bring the entire Eurozone to the brink of collapse.
“The RBS banking group has warned 1.3 million customers they could be charged negative interest rates if the Bank of England cuts base rates below zero.
The group, which includes NatWest, wrote to its business and commercial account holders about the potential changes, which mean they could lose money even when they are in credit.
The letter said: “Global interest rates remain at very low levels and in some markets are currently negative.
”Dependent on future market conditions, this could result in us charging on credit balances.”
The Bank of England’s base rate currently stands at the historically low rate of 0.5%, where it has been for more than seven years - and some economists believe it should be cut further to stimulate the economy.”
— Sky News
Besides the RBS Group and NatWest, Dutch bank ABN Amro also reported yesterday that they intend to begin implementation of charges on business accounts.
For anyone who still trusts in their bank, despite the legislation passed by the U.S. in 2010 (Dodd-Frank), and in the EU (2015) that allows banks to confiscate customer assets to bail themselves out whenever they are short on capital, these new policies of charging clients simply to hold their money is the final warning to get out of most financial institutions, and find alternative ways to store and access your money outside the system. And thankfully since 2008 there are many new facilities out there to accommodate this such as Bitcoin, Visa and Mastercard Debit cards, Bitgold, and Karatbars, which will allow you to store your money in assets outside of the banking system, while both protecting it and giving you the ability to spend it any anytime on your necessary goods and services.