EU-Europeans are a peculiar bunch. Despite repeated failures with centralist economic planning, they cling stubbornly—like children to a bowl of candy—to their ambition of transferring the most vital sectors of the economy into the hands of Brussels’ bureaucratic caste. Unpopular industries like automotive, chemicals, or aviation are smashed with a regulatory sledgehammer. The heart of the economy—the energy sector—is placed under direct state guardianship. The so-called Green Deal, a Keynesian-style centrally planned substitute economy, is meant to replace traditional energy sources. The results are predictable: deindustrialization and a massive exodus of investment to non-European countries.

Always involved in this process: the European Central Bank. It’s expected to grease the wheels of Brussels’ colossal subsidy machine with artificially cheap credit. The fact that the ECB, after its eighth rate cut in record time, has once again pushed its key interest rate down to 2%—deep into negative real territory—doesn’t trouble the central planners in the Frankfurt Tower. ECB board member Joachim Nagel even claimed today that the “neutral rate” had been reached. In a sense, he’s right: after years of zero interest policy, the Eurozone economy has grown so dependent on cheap credit—sometimes outright subsidies—that it can no longer function or service its debt under conditions of real positive interest rates. That’s what economists call a “zombie economy.” The wave of bankruptcies, such as the recent collapse of battery cell manufacturer Northvolt, is the logical outcome of centrally planned industrial policy.

Worse still for the central planners in Frankfurt and Brussels: their transatlantic counterpart, the Federal Reserve, is proving far more determined and resilient. It continues to hold its rates at 4.5%, embracing a real positive return on capital to allow market corrections to unfold. In the U.S., short-term pain is seen as the price of long-term health.

Europe, by contrast, has grown addicted to its subsidy habit. It is ensnared in a hyper-statist welfare model, doing everything it can to defer both economic and social pain. How long that can go on is anyone’s guess. But one thing is certain: tensions are rising across the markets. The day is drawing near when these pressures will erupt in a seismic shock—and the tectonic plates of the economy will violently shift into a new configuration.