You searched for: Content Type Working Paper Remove constraint Content Type: Working Paper Publishing Institution Centre for European Policy Studies Remove constraint Publishing Institution: Centre for European Policy Studies Political Geography Germany Remove constraint Political Geography: Germany Publication Year within 10 Years Remove constraint Publication Year: within 10 Years Topic Financial Crisis Remove constraint Topic: Financial Crisis
- Author: Paul De Grauwe, Yuemei Ji
- Publication Date: 09-2012
- Content Type: Working Paper
- Institution: Centre for European Policy Studies
- Abstract: This paper analyzes two claims that have been made about the Target2 payment system. The first one is that this system has been used to support unsustainable current account deficits of Southern European countries. The second one is that the large accumulation of Target2 claims by the Bundesbank represents an unacceptable risk for Germany if the eurozone were to break up. We argue that these claims are unfounded. They also lead to unnecessary fears in Germany that make a solution of the eurozone crisis more difficult. Ultimately, this fear increases the risk of a break-up of the eurozone. Or to paraphrase Franklin Roosevelt, what Germany should fear most is simply its own fear.
- Topic: Economics, Regional Cooperation, Monetary Policy, Financial Crisis
- Political Geography: Europe, Germany