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Originally Posted by Damien
My understanding is that the Germans are well aware they're on the hook for Greece
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Nope. They have been told otherwise.
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He confirms that Germany is indeed on the hook for €574bn of credits from the Bundesbank to the central banks of Greece, Portugal, Ireland, Italy, Cyprus, and Slovenia.
We have always been assured that the so-called Target2 credits within the ECB's internal payments system is a technical adjustment, without significant risk.
Mr Bini-Smaghi states that any EMU state leaving the euro would face likely default on external obligations. "The national central bank would not be able to repay liabilities accumulated in relation to other members of the euro system, which are registered in the internal payments system of the Union (known as Target2). The insolvency would provoke substantial losses for counter-parties in other eurozone countries, including central banks and states."
German voters may wish to know this before the elections on Sunday week, since they are told otherwise by their own leaders. The anti-euro AfD party – now running at 4pc in the polls, with a shot at the Bundestag – might also find this to be of interest.
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(From my link above, well worth reading in full).