Target 2-a record: From North to South

Before the great financial crisis flowed a lot of money from the North of the monetary Union in the southern States. These capital movements were driven by hopes for a favourable economic development in the South, little bit of attractive investment conditions in Germany and higher interest rates in the South. As it turned out later, was not used the money in the South, however, is often to strengthen the competitiveness, but to Finance consumption and real estate bubbles.

Since the financial crisis, monetary policy, and not only in the Euro area is very expansive. Since then, money flows through the payments system Target 2 from the South to the North, and inflates the national balances. Now, the balance of the German Bundesbank, has exceeded the European Central Bank for the first time the mark of one trillion euros. In a technical sense balances arising, if a national Central Bank-created Central Bank money is transferred to another country. For this purpose, there may be different causes, but it is probably no coincidence that the balances seem to have been around for five years with the respective orientation of monetary policy to breathe.

a country of destination for safety-oriented investors

Obviously, the buying programs of the ECB of Italian and foreign investors to sell European bonds and keep the money then to accounts in Germany, the Netherlands and Luxembourg. Germany is likely to have also served on the bond purchases by the ECB as a country of destination for safety-oriented investors.

this Trend is likely to change, but he is not destiny. The possibilities to move to Central Bank money within the Euro zone, depend on the available amount of Central Bank money. A reduction in the bond-buying program is likely to contribute to a reduction in the balances. This effect was a few years ago to watch.

But the monetary policy is the only player. The countries in southern Europe do not have to operate an economic policy that drives the money out of the country, but, on the contrary, money from the North attracts, and which would have to be used the next Time more meaningful than in the past.