A “Trillion Euro” Problem: Target 2 as a Risk for Germany
A “Trillion Euro” Problem: Target 2 as a Risk for Germany

Author(s): Sebastian Płóciennik
Subject(s): Supranational / Global Economy, Economic policy, Economic development, Financial Markets, Fiscal Politics / Budgeting
Published by: PISM Polski Instytut Spraw Międzynarodowych
Keywords: Germany; eurozone; joint budget; banking union; Target 2 payment system; central banks; stability of the eurozone;
Summary/Abstract: In the German discussion on the eurozone, there is not only a question of reforms, e.g. the introduction of a joint budget and finalisation of the banking union. Much attention is also paid to the Target 2 payment system, which simultaneously accumulated the high, positive balance of the Bundesbank and the negative balances of the central banks of the southern European countries. This imbalance is considered an economic and political risk for Germany. However, remedies against it are in short supply. Actions that are too rapid or radical could destabilise the eurozone.

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