Holy Roman Empire-Chapter 1025 - 39, Abnormal Commercial Loan

Chapter 1025: Chapter 39, Abnormal Commercial Loan

Every large loan negotiation involves more than just a few words. In addition to political interest exchange, it is accompanied by a series of risk assessments and detailed negotiations.

Commercial loans differ from purely policy-based loans.

Purely policy-based loans are fully backed by the government; banks simply disburse the funds without needing to consider risk or return. Commercial loans are different; even if a government provides a guarantee, it is limited to the principal amount.

The specific returns and risks must still be evaluated by the commercial bank itself. In theory, if the bank deems the risk greater than the returns, the loan falls through.

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From this perspective, even if the Vienna Government agrees to issue the loan, whether the Spanish Government can ultimately receive the funds remains an unknown.

Of course, things are negotiable. Capital chases profits; as long as the return is high enough, risk is no longer an issue.

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Ruenior was naturally very disappointed, unable to secure full support from the Vienna Government and still having to haggle with bankers.

Based on his past experiences with bankers, Ruenior knew it would cost him. Thinking of Spain’s current fiscal condition, he felt terrible.

“Borrowing money is hard, but repaying it is even harder!”

If all goes as expected, after receiving the loan, the Kingdom of Spain will surpass the United States in debt, becoming the world’s third-largest debtor nation, just behind America.

Naturally, the country seated before them is Russia. In those times, being able to amass a colossal debt was a skill unto itself; who else could it be but the Tsarist Government?

Although the Vienna Government also shoulders a massive debt, the Holy Roman Empire remains a creditor nation.

It’s like a company that owes money to upstream raw material suppliers while also having receivables from downstream distributors that have yet to be collected.

Cost of goods sold must be accounted for in costs, while accounts receivable must be considered as profits. If profits exceed costs, it’s a gain; otherwise, it’s a loss.

Though the Vienna Government owes a lot of money, there are even more people who owe them. All things considered, the debts are still greater than the liabilities.

Just look at the debts of the neighboring Tsarist Government to understand; most of them originated from here. Besides, there’s also a bunch of small fry that are major receivables.

Banks, too, need to evaluate risks.

Banks wouldn’t dare lend money to European countries that have declared bankruptcy. Not even with guarantees.

Collecting debts takes time and nearly a hundred percent default rate; no one would want to deal with that!

In the end, only a compromised solution could be adopted: banks lend money to the Vienna Government, which in turn lends it to others.

As a result, despite the Vienna Government continually divesting its debt, its own liabilities have not decreased but rather increased substantially.

Ruenior had hoped to secure such special loans as well. After all, the interest rates offered by banks are usually very low when the Vienna Government assumes the risk.

Regrettably, this advantageous situation is just a pipe dream. Without offering sufficient benefits in exchange, why would the Vienna Government assume such a thankless role?

Besides, Spain is not without collateral. In comparison to those impoverished underlings, the Spanish Government is relatively wealthy.

Whether it’s the right to issue currency, the colonies, customs duties, or even territory, all could be offered as collateral.

The Vienna Government might not be interested, but that doesn’t mean no one else is. In many people’s eyes, these are high-quality assets. Sold to the right customer, they could reap substantial rewards.

“Squeezing oil” is best left to professionals. In this regard, bankers are absolutely the most professional, without a doubt.

As for the risk of default, who can look forward to wealth without assuming risks? As long as the Vienna Government is willing to guarantee, the risk remains within a manageable range.

…

“Did you find out anything?” Ruenior asked.

Although a preliminary agreement on the loan had been reached with the Vienna Government, he still hadn’t given up on the Jewish capital option.

Money can never be too abundant. If possible, Ruenior still wanted to secure as much financing as he could.

After all, war is rife with uncertainties, and no one can be sure of the ultimate costs until the final moment.

If it weren’t for a lack of alternatives, the Army Department would not propose recruiting “French Mercenaries” for combat. If the military lacks confidence in its own soldiers, Ruenior is even less confident.

Just look at the Philippine War. Spain’s most elite troops, with absolute firepower superiority, failed to handle a group of native Japanese warriors.

While the Spanish Army had the advantage in exchange ratios, when compared to the performance of the French mercenaries, they fell short.

In fact, the problem of inadequate combat power of the Spanish Government forces was exposed during more pressing times. If one were to delve deeply, it could be traced back to the previous century, or even the century before that.

But now the problem has grown more severe. Everyone knows the Spanish Army must reform, but with war at hand, the Spanish Government has no idea where to begin.

Since their own military forces are inadequate, they must rely on “finance” to compensate. Without a financial reserve, Ruenior truly worries about another episode of funding shortfall.

Minister Brad, “The timeline was too tight; we’ve only managed to uncover their public identities. As for whether they have clandestine ties with other powers, we still can’t be sure.

You might not believe this, but these people’s stories could fill an entire legendary novel.

If I were to suggest a title, I believe ‘The Struggle of Jewish Capitalists’ or ‘The Resilience of Jewish Capitalists’ would be fitting.”

According to the records we’ve uncovered, these guys have a glorious family history as forebears who once led the largest financial consortium in the Germany Region.

However, due to their excessive greed, they wanted to extend their tentacles into politics and secretly supported the Revolutionary Party during the 1848 Vienna uprising.

Afterwards, these financial consortiums were settled by the Vienna Government. But these people reacted quickly enough; seeing the tide turning against them, they immediately fled.

Although the people escaped, their foundations were lost, either destroyed by the Rebel army or confiscated by the Vienna Government. In any case, after 1848, the power of Jewish capital in the Austria region was severely damaged.

After the storm passed, the lucky survivors, with the capital they had shifted in advance, managed to make a comeback.

Only this time, they were not so lucky, coincidentally catching up with the Vienna Government’s large anti-corruption campaign. Jewish financiers involved were given special attention by the Vienna Government, with hundreds hanged and thousands exiled overseas.

After the affair concluded, the power of Jewish capital in the Austrian financial world was virtually swept clean, heading towards decline.

Although the Jewish consortium was destroyed, there were always a few fish that slipped through the net. Those we are in contact with now are descendants of those who escaped capture, now pushed into the light as the new decision-makers.

We have only found connections with Jewish capital in the Germany Region so far. They had always been closely linked with Austrian Jewish capital, and the Vienna Government’s actions also harmed their interests.

Driven by self-interest, these people had always been most opposed to the reconstruction of Shinra. But later, unable to contend against mightier forces, they had to accept reality.

After the establishment of the Holy Roman Empire, in order to avoid being settled, this Jewish capital also became much more restrained.

On one hand, they tried to lower their profile as much as possible; on the other hand, they strengthened their connections, striving to foster relationships with the influential.

It’s just that, for some reason, they suddenly approached us.”

Knowing that the Vienna Government’s financial regulations were strict and unsuitable for capital speculation, Jewish capital still did not flee but chose to stay in the Holy Roman Empire, which already explains a lot.

Perhaps to the outside world, Jewish capital seems like one entity, but in reality, the competition among them is just as fierce.

“Today you scam me, tomorrow I scam you,” is the norm in capital operation.

The so-called fraternal affection exists only among the ordinary people. The essence of capital worldwide is the same—a dedication to profit.

The market is not unlimited; no one welcomes the addition of competitors. It’s easy to leave the Holy Roman Empire, but settling elsewhere doesn’t guarantee good days.

The anti-Semitic campaigns are not just for show; newcomers without connections are lambs to the slaughter. Testing a wolf’s will with lambs is simply…

In comparison, the situation in the Holy Roman Empire was still relatively good. Although government oversight was rather lax, the Vienna Government played by the rules!

Within the bounds of the rules, profits might be hard to come by, but there was safety in that. One didn’t need to worry about waking up to a metaphorical ‘snip.’

For the ordinary Jewish populace, the impact was even less. Apart from the strict educational controls, with no Jewish schools and only public schools available for learning, the stable social environment had become their favorite aspect of life.

Nevertheless, compared to a life of constant upheaval, these minor flaws were not deal-breakers. After all, the everyday Jewish people, busy with their daily bread, hardly had the luxury to concern themselves with much else.

Against this backdrop, although many Jewish immigrants have flooded into the Holy Roman Empire in recent years, the concept of Jewish nationality has been gradually diluted.

Ethnic integration aligned with the interests of ordinary people but harmed Jewish capital.

Without these ordinary people as cover, they would be like bright lights in the dark night, the most visible wherever they went.

Out of necessity, much of the Jewish capital in the Austria region no longer identified as Jews and engaged in subterfuge.

From a surface perspective, Jewish capital in Austria indeed seemed to have declined and now relied on the Jewish consortiums in North Germany for survival.

There wasn’t much content discovered, but the visible aspects alone were enough to give Ruenior a headache.

Politics is cruel. Based on previous experience, Ruenior knew that the simpler the background, the bigger the problem lurking behind.

How could a few Jewish financiers, who had been harshly dealt with by society, dare to take on such high-risk loans without someone backing them?

“If we agree to their terms, when is the earliest we could disburse the loan?”

Not knowing who was behind it didn’t matter; after all, real gold and silver couldn’t deceive. As long as they could get the loan in hand, Ruenior didn’t care who was manipulating things from behind.

“Calculations” also had to be based on the foundation of power. If it was just a few elites, Ruenior didn’t mind letting them see the harshness of society.

Minister Brad said, “These people have promised that after the contract is signed and made public, they will begin disbursing the loan within a month.

They have also proposed a condition to send someone to supervise the use of the funds. To ensure that the funds are not misappropriated, they will make disbursements weekly.

The first tranche of the loan is one million Divine Shields, and thereafter, the weekly disbursement amount will be determined based on actual circumstances.”

“There’s a problem!”

That was Ruenior’s first reaction. Disbursing in installments was an international practice, but disbursing weekly seemed overly frequent.

After pacing the room several times, Ruenior slowly said, “Agree to their terms, but the amount of the first disbursement cannot be one million Divine Shields.

According to international practice, the amount disbursed for the first installment of the loan should not be less than ten percent of the total loan amount. And the disbursement time must not be one month, it has to be within one week.”