Chapter 540: The Wave of Bankruptcy
If you talk about kangaroo country, you can barely grit your teeth and hold on at this time.
The Europa region is really in dire straits at this time.
Despite the large number of glass greenhouse projects invested, these greenhouses could not be built in a few years with the slow efficiency of the Europa.
Therefore, at this stage, they can only rely on open-pit agriculture, and the outbreak of genetically modified corn in America directly affected the pond fish, so that the Europa consortium, which originally planned to purchase 30 million tons of corn from North America as feed raw materials, was suddenly in a dilemma.
Although it is used as feed for livestock, even if the livestock have inflammation in their bodies, there is no way to say it.
The potential risks of genetically modified corn have led many in the Europa community to raise objections to importation.
However, before the Europa Consortium could reach a conclusion, a fruit and vegetable producer in Germany declared bankruptcy.
The incident seemed to have set off a chain reaction, and in less than a week, more than 17 large and medium-sized agricultural producers in Europe and the United States declared bankruptcy.
The headquarters of the Union Supermarket Group in Munich.
Duren Martin, the head of finance, had only a pale face left: "President, we can't hold on."
"Alas......" President William lamented, "Let's start preparing for bankruptcy and liquidation!"
The others present had already anticipated the arrival of this day.
The entire Europa consortium has been stuck in a cycle since the adoption of a mandatory low-price purchase restriction scheme.
The cost of producing grains, vegetables, fruits, meat, eggs and milk is soaring, but the retail price of supermarkets is not allowed to increase significantly, and it is limited to a relatively low price range.
Although there are some subsidies, the problem is that these subsidies still have no way to compensate for the losses caused by the purchase restrictions at low prices.
Many supermarkets and agricultural producers are operating at a loss, betting their hopes on the future.
It's a pity that they lost the bet, and the reality gave them a hard slap, extreme weather, raw material costs, labor costs and transportation costs have increased significantly, and the low-price purchase restriction order has been extended for another three months.
In the face of this loss-making business, many enterprises finally can't hold on.
The back-to-back bankruptcies of agricultural and retail businesses quickly turned into a wave that spread from Europa to the entire free world.
Several large supermarkets in Munich, directly after closing.
Panic quickly erupted among the people, and many people found that the surrounding large supermarkets were closed, which made people think about it.
For a time, a rush to buy inevitably appeared on the streets and alleys of the Europa Consortium.
In front of a small supermarket.
Dozens of aunts are queuing, whispering about the recent prices.
"It's been so hard to buy things lately!"
"I've closed several supermarkets again, and if this continues, there's no place to buy anything."
"It's just that no matter how low the price is, it's useless!"
"I hope this problem is solved soon!"
"Alas......
Suddenly, a supermarket employee hung a sell-out sign at the door.
This made the faces of the aunts very ugly.
"Hurry up and go to another supermarket!"
"Is this still a way to stop normal life?"
"Don't crowd ......"
On the street, people who can't buy food are hurrying to another supermarket.
However, when they arrived at the door of the supermarket, they found that there was not much left of the goods here, and even if the purchase was restricted, there was still no way to ensure a stable supply of supplies.
This is the invisible hand of the free market.
The Europa Commonwealth can enforce a low price, but there is no way to force farmers, agricultural companies and supermarkets to stay open.
Many farmers would rather rot vegetables and fruits in the ground than sell them, because the price of selling them is too low, and the farmers feel that the gains outweigh the losses, so they simply don't plant them, or let the vegetables and fruits go their own
Born and left to die.
Obviously, these farmers, agricultural companies and supermarkets are forcing the Europa consortium to make a choice
Either increase subsidies to ensure that their net profit is positive;
Either they will die and the net will be broken, and they will directly stop production and go bankrupt;
Either they are allowed to raise the price and guarantee profits.
These three choices, no matter how you look at them, are all propositions.
At this time, normal supermarkets in Munich, Hamburg, Bremen, Berlin and other places closed down or declared bankruptcy, while the underground black market took the opportunity to be active.
After all, everyone has to eat, and in the past, someone was willing to buy 500,000 marks of bread, but now in the underground black market, it is only 50 euros for a 10-kilogram bag of flour.
That's the beauty of the free market.
Coercion, when used in the free market, often only treats the symptoms rather than the root causes, and can even be counterproductive.
Despite the continuous intervention and even the adoption of tough measures in various localities, there is still no way to solve the price problem, and on the contrary, it has become more and more intense.
Underground black markets continue to emerge in various places, raising prices several times, and some things have even increased in price by more than ten times.
The wave of bankruptcies continues.
The complaining Parisians were already singing and dancing in the streets at this time.
Prices in Paris are actually not very high, because they have a large number of nuclear power plants, and their own food production is not bad, but for natural disasters and some merchants hoarding, the price would not have risen more than twice.
Faced with rising food prices, restrictions on individual purchases, and the rampant underground black market, many Parisians are furious.
……
Emergency meeting of the Europa Commonwealth.
The members of the board of directors were solemn at this point, and it was clear that they did not expect that things would develop to the current situation.
The German governor could not wait to speak: "We must find a way to solve the price problem, or we will blow ourselves up."
"You think we don't want to solve it, but the problem is that we don't have the money right now!" The Western Roman councillor was speechless.
Others were also full of entanglement and helplessness.
To meet the requirements of enterprises, it is necessary to increase prices, or increase subsidies.
To meet the demands of ordinary people, it is necessary to limit price increases while maintaining high incomes and low unemployment.
Clearly, these two choices are contradictory.
Whichever they choose, the people on the other side won't be too satisfied.
The Dutch councillor thought for a moment before answering the child, "Why don't we get America to support us with some food, and get through it first."
"Hehe, no one wants Americaka's food to give away now." The Western Roman councillor spread his hands.
The German councillor was furious: "This is not good, that is not good, what are you really thinking? Do you want to watch Europa blow itself up?"
Everyone began to discuss it, and after a few minutes of verbal fighting, there was still no result of the discussion.
Sure enough, it was like a plate of loose sand.
In fact, they have another way, and that is to learn from Homo sapiens and completely turn the entire Europa consortium into a giant enterprise.
The problem is that the consequences of doing so are not acceptable to all.
In particular, the model of giant enterprises and the model of the Europa consortium are basically two different things.
Many people will not give up for the sake of their wealth.
The emergency meeting of the Europa Commonwealth ended unhappily, with no concrete proposals being discussed, and many localities already planning to go their separate ways.
And this behavior further severs the cooperative relationship within Europa, so that they cannot work together internally.
On the other hand, the economy of the entire free world is starting to go awry with the ripple effect of the wave of bankruptcies.