The ECB in Frankfurt
Image: Lucas Bäuml
Germany’s target balance rises to more than one trillion euros. The central bank believes that there is no need to worry. An Italian economist is more critical.
D.he European Central Bank (ECB) tried on its website to explain the European Target payment system and the Target-2 balances resulting from it. The reason may be that the German balance exceeded the one trillion euro mark in July. The ECB writes that you can read a wide variety of theories about these balances in the media. Many would therefore certainly wonder what is behind it now.
The conclusion of the central bank, so much should be revealed in advance: There is no reason to worry. Admittedly, these balances could sometimes indicate that there is a flight of capital from a certain country in the euro zone because there are worries about the country’s financial situation. The current rise in balances is mainly a consequence of monetary policy measures, not financial stress. The ECB, on the other hand, does not address the question of what happens to the target balances if a large euro area leaves the monetary union or the monetary union as a whole collapses, which is often speculated about in the debate about the target balances.