Chapter 539 Bankruptcy Wave
As for the Kangaroo Country, it can still grit its teeth and hold on at this time.
The European region was really in dire straits at this time.
Despite investing a large amount of money in glass greenhouse projects, given the slow work efficiency of the Europeans, it would take several years to complete these greenhouses.
Therefore, at this stage, they can only rely on open-air agriculture. The outbreak of genetically modified corn in America has directly affected innocent people, making the European Union, which originally planned to purchase 30 million tons of corn from North America as feed raw materials, suddenly caught in a .
Although it is used as feed for livestock, the livestock cannot say anything even if their bodies become inflamed.
However, the potential risks of genetically modified corn still lead many people in the European Union to oppose its import.
However, before the Europa League could reach a conclusion, a vegetable and fruit producer in Germany declared bankruptcy.
This incident seemed to trigger a chain reaction. In less than a week, more than 17 medium and large agricultural producers in Europe and the United States declared bankruptcy .
The headquarters of the United supermarket group in Munich.
The head of the finance department, Durham Martin, had a pale face: "President, we can't hold on any longer."
"Alas..." President William sighed: "Start preparing for bankruptcy liquidation!"
Others present had already anticipated this day.
The entire European Union has actually fallen into a vicious circle since it adopted the mandatory low-price purchase restriction plan.
The production costs of grain, vegetables, fruits, meat, eggs and milk are soaring, but supermarket retail prices are not allowed to increase significantly and are limited to a relatively low price range.
Although there are some subsidies, the problem is that these subsidies still cannot make up for the losses caused by low-price purchase restrictions.
Many supermarkets and agricultural producers are operating at a loss and are betting their hopes on the future.
Unfortunately, they lost the bet, and reality slapped them in the face. Extreme weather, raw material costs, labor costs and transportation costs increased significantly, and the low-price purchase restriction order was extended for another three months.
Faced with this kind of loss-making business, many companies finally couldn't hold on.
This time, the successive bankruptcies of agricultural and retail companies quickly evolved into a wave that spread from Europe to the entire free world.
After several large supermarkets in Munich closed down.
Panic quickly broke out among the people, and many people found that large supermarkets around them were closing one after another, which immediately made people think a lot.
For a time, bank runs and panic buying inevitably occurred in the streets and alleys of the European Union.
In front of a small supermarket.
Dozens of middle-aged women were queuing up, discussing the recent prices in low voices.
“It’s so hard to buy things lately!”
"Several supermarkets have closed down again. If this continues, there will be no place to buy anything."
"That's right, no matter how low the price is, it's useless!"
“I hope this problem can be solved as soon as possible!”
"well……"
Suddenly the supermarket employees hung a sold out sign at the door.
This made the aunts look very unhappy.
“Hurry up and go to another supermarket!”
"Can we still live a normal life?"
“Don’t push…”
On the street, people who couldn't buy food hurried to another supermarket.
However, when they arrived at the supermarket entrance, they found that the things here had also been sold out. Even if there were purchase limits, there was still no way to ensure a stable supply of materials.
This is the invisible hand of the free market.
The Europa Cartel can impose a low price, but it has no way of forcing farmers, agricultural companies and supermarkets to stay in business.
Many farmers would rather let their vegetables and fruits rot in the fields than sell them. The reason is that the selling price is too low. Farmers feel that the cost outweighs the gain, so they simply stop planting or let the vegetables and fruits fend for themselves.
Obviously, these farmers, agricultural companies and supermarkets are forcing the European Union to make a choice.
Either increase subsidies to ensure their net profit is positive;
Either they will suffer a catastrophe and stop production and go bankrupt;
Or allow them to raise prices and ensure profits.
These three choices are fatal no matter how you look at them.
At this time, normal supermarkets in Munich, Hamburg, Bremen, Berlin and other places stopped operating or declared bankruptcy, and the underground black market took the opportunity to become active.
After all, people have to eat. In the past, a loaf of bread cost 500,000 marks, and people were willing to buy it. Now on the underground black market, a 10-kilogram bag of flour only costs 50 euros.
That's the beauty of the free market.
The use of coercive measures in a free market can often only treat the symptoms rather than the root cause, and may even backfire.
Despite continuous intervention from various places, even using tough measures, there is still no way to solve the price problem, and it has become increasingly serious.
Underground black markets continued to emerge in various places, raising prices several times, and some items even increased in price by more than ten times.
The wave of bankruptcies continues.
The Parisians, who had been complaining, were now singing and dancing in the streets.
The prices in Paris are actually not that high, because they have a large number of nuclear power plants and their food production is pretty good. If it weren't for natural disasters and hoarding by some merchants, prices would not have risen by more than two times.
Faced with rising food prices, personal purchase restrictions, and the rampant underground black market, many Parisians are very angry.
…
At an emergency meeting of the Europa Union.
The directors of each member had solemn expressions on their faces. It was obvious that they had not expected that things would develop to the current situation.
The German director could not wait to speak up: "We must find a way to solve the price problem, otherwise we will explode."
"You think we don't want to solve it, but the problem is we don't have the money now!" The Western Roman Councilor was speechless.
The others also looked confused and helpless.
To meet the demands of enterprises, prices must be raised or subsidies must be increased.
To meet the needs of ordinary people, it is necessary to limit price increases while maintaining high incomes and low unemployment.
Obviously these two choices are contradictory.
No matter which one they choose, the people on the other side won't be too happy.
Director Netherlands thought for a while before answering the child: "Why don't we ask America to provide us with some food so that we can get through this difficult time first."
"Haha, nowadays no one wants America's grain even if we give it away." The Western Roman director spread his hands.
The German director was very angry: "This is not allowed, that is not allowed, what do you want? Are you going to watch Europa explode?"
Everyone started discussing it, but after several minutes of arguing, they still couldn't come to a conclusion.
It really is like a pile of loose sand.
In fact, they have another way, which is to learn from Sapiens and completely turn the entire Europa Union into a giant enterprise.
The problem is that not everyone can accept the consequences of doing so.
In particular, the giant enterprise model and the European Union model are basically two different things.
Many people will not give up for the sake of their wealth.
The emergency meeting of the European Union ended in a bad mood. No specific plan was discussed at all, and many places have already decided to go their own way.
This behavior further severed the cooperative relationship within Europa, making it impossible for them to work together.
On the other hand, under the chain reaction of the wave of bankruptcies, the economy of the entire free world began to have big problems.
