The Eurozone crisis lingers on. This column argues that the Eurozone payments system has been operating as a hidden bailout whereby the Bundesbank has been lending money to the crisis-stricken Eurozone members via the Target system on the order of €300 billion. Urgent corrective action is needed, the author argues, as the scope for this sort of transfer is limited. If markets sense the end of the line, the Eurozone may face a crisis like the one Britain faced in 1992.
The parliaments of the Eurozone struggle to find an agreement about the future European Stability Mechanism (the €700 billion bailout system for the Eurozone’s stricken economies) hoping that their rescue package will solve the problems of Europe’s periphery once for all. They should know, however, that they are not the first to set up such a package. Theirs will just be a replacement for another rescue package worth more than €300 billion that the ECB has been operating for the past three years.
Πηγή: Voxeu