Germany has been bankrolling the failed EU experiment for sometime now.
Fear of Italy leaving the euro has driven Germany’s surplus with the European Central Bank to a record €956 billion. But economists say this surplus could vanish overnight if a real crisis hit.
By Norbert Häring and cross-posted from Handelsblatt
Germany’s surplus with the European Central Bank hit a new record in April. Germany is currently owed around €950 billion ($1.12 trillion) under the ECB’s Target2 clearing system, which balances out cross-border financial movements within the euro zone.
That figure represents about half of Germany’s entire foreign asset surplus, the amount that the rest of the world theoretically owes the country. It sounds like a huge amount of money, but some economists say it may be worth far less than meets the eye. If the euro zone were to break up, or if a country like Italy left the system, the surplus could evaporate overnight.
Hans-Werner Sinn, the former…
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