Transfer of creditworthiness

Term used in connection with euro bonds in spring 2011 to describe the fact that, in the case of joint European loans, countries with previously good ratings – such as Germany, Luxembourg or the Netherlands – suffer losses to the benefit of countries with poor ratings – such as Greece or Cyprus. This is because the jointly issued government bonds mean that over-indebted countries can refinance themselves more cheaply, while borrowing becomes more expensive for countries with good credit ratings. – For Germany, a loss of EUR 7 billion per year has been calculated by the Deutsche Bundesbank. EUR 7 billion per year. Calculations by banks, however, indicate an additional burden of EUR 47 billion per year. EUR per year. – See fear, perverse, bond spread, bail-out, blame game, blue bonds, ClubMed, EU financial aid, euro bonds, European Financial Stabilization Facility, European Monetary Union, fundamental error, European Monetary Fund, ECB fall from grace, government spreads, moral hazard, Plan C, return ideology, seven percent limit, solidarity, financial, stabilization mechanism, European, structural reforms, southern front, redistribution, central bank-induced, treaty loyalty, two-way option.

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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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