TARGET2 as a scapegoat for German errors | vox - 0 views
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This coincided with the bubble years in peripheral Eurozone countries (2003-07). The effect of this is that Germany accumulated large net claims on Eurozone countries, which at the end of 2011 amounted to €634 billion.
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These current account surpluses did not lead to TARGET2 claims during the bubble years because the counterpart of these surpluses were increasing claims held by (mainly) German banks against the other Eurozone countries.
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the German banking system was lending the money to other Eurozone countries to allow them to buy surplus German products – a highly risky affair.
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