After the Danish pension fund sold its U.S. Treasury bonds in protest over the Greenland dispute, Green MEP Rasmus Andresen calls for a joint EU financial boycott against Washington.
“Europe should exert massive pressure on Trump through a coordinated halt to the purchase of U.S. Treasury bonds and the simultaneous development of secure European financial assets” Andresen told the “Redaktionsnetzwerk Deutschland”. “Trump would come under much greater pressure from a financial‑political response than if one simply turned a few knobs on the customs lever”.
Andresen urged: “The European Commission, the Investire Bank, and the ECB should all examine options to get this financial bazooka off the ground” the Green MEP said. “If Europe slows down purchases or signals sales, the yield pressure on U.S. debt will rise and refinancing costs for the state and the economy will increase”.
Europe holds roughly ten percent of all U.S. Treasury bonds, amounting to about $1.5 trillion. “The EU should gradually shift the roughly $1.5 trillion of U.S. Treasury bonds into European hands” Andresen said to the RND.
Due to the U.S. budgetary and current account deficits, the U.S. economy is heavily reliant on foreign capital. Economists say that even a moderate pullback by large investors could reduce demand for U.S. Treasury bonds and, therefore, for U.S. dollars, depreciate the dollar, and raise financing costs for the U.S. government.