Munich Personal RePEc Archive

Financial support for Italy will be costless

Whittaker, John (2020): Financial support for Italy will be costless.


Download (272kB) | Preview


Loans to Italy from other eurozone countries will not increase their risk exposure, irrespective of the method of financing.

This is because loans will displace an equal amount of Italy’s Target2 debt, leaving unchanged the total claim of the eurozone creditors. Italy currently has Target2 debt of €513bn to other eurozone countries through its central bank.

If Italy receives grants, this will amount to forgiveness of some of its Target2 debt, which will be no loss to the creditors because its Target2 debt is unlikely ever to be repaid at full value.

Atom RSS 1.0 RSS 2.0

Contact us: mpra@ub.uni-muenchen.de

This repository has been built using EPrints software.

MPRA is a RePEc service hosted by Logo of the University Library LMU Munich.