Banks from EMU crisis countries issue bonds on a large scale. These bonds are backed by a guarantee from the respective government. In this way, the securities meet the requirements of the credit assessment framework, at least in form. The ECB grants credit on the basis of this collateral. At the end of February 2012, the ECB had transferred a total of EUR 263 billion to the crisis countries Greece, Spain, Italy and Portugal in this way. – The banks actually have to offer collateral precisely so that the central bank can get its money even if an institution goes bankrupt. In the case of government-guaranteed bonds, however, this collateral consists only of the guarantee of the respective home country, which is often enough itself financially stricken. On the indicated path of money creation, the risks at the ECB increase, and the members of EMU ultimately have to foot the bill through higher inflation. – See Europayer, monetarists, renationalization, monetary, southern front, redistribution, central bank-inspired.
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University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec.
Professor Dr. Eckehard Krah, Dipl.rer.pol.
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