Intra-eurosystem debts

John Whittaker

MPRA Paper from University Library of Munich, Germany

Abstract: Germany is a reluctant supporter of the EU funds which are being used in the ‘bailout’ of Ireland, and it insists on strict ‘austerity’ conditions, concerned about risk and moral hazard. However, through its central bank, Germany is lending €325bn (December 2010) to other central banks in the eurosystem. The Central Bank of Ireland (CBI) has borrowed €146bn from the eurosystem in order to support its banks. This ‘bailout’ of Ireland via the eurosystem is larger than its official EU ‘bailout’ (€146bn as against €67bn) and much cheaper (1% interest as against 5.8%), but it exposes Germany to similar risks.

Keywords: eurozone operations; TARGET2 (search for similar items in EconPapers)
JEL-codes: E42 E52 E58 (search for similar items in EconPapers)
Date: 2011-03-30
References: View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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