TARGET balances, foreign trade and money creation

Up to February 2011, Germany had accumulated 321 billion euros in TARGET claims against the European Central Bank; the GIPS countries - Greece, Ireland, Portugal and Spain - accumulated, by the end of 2010, about 340 billion euros in interest-bearing TARGET liabilities for financing their deficits on current account. In his comment Hans-Werner Sinn, President of the Ifo Institute, describes the associated risks for the euro area.