The European Central Bank (ECB) has seen a stratospheric rise in its balance sheet which has hit a new all time high of €6.3 trillion.
As can be seen above that’s a trippling in just half a decade with $2 trillion added just this year.
Interestingly this vast money printing seems to have had no effect on the economy which has stagnated since 2008.
In the early 2000s eurozone was booming, doubling in GDP, but since then it hasn’t quite been moving.
One reason for this stagnation may well be government debt which has increased to €10 trillion in the eurozone, close to 100% of its circa €12 trillion GDP.
Meaning more and more taxpayer’s money is being used to pay back the debt which is primarily owned to banks.
As such the government has less to invest in higher education or cutting edge research, while citizens have less to spend because of fairly high taxes in general.
There’s of course the income tax, but there are also property taxes (council tax), sales taxes (VAT), fuel duty, license requirements for numerous activities, fines, and also tariffs in or out for those engaging in international trade.
With growing debt, taxes may have to grow even further, so risking this stagnation potentially even going into contraction even as the eurozone enjoys a trade surplus of some €20 billion.