Germany is getting worried–more worried than usual–about the level of debt in the eurozone. The European Central Bank’s Target2 system indicates that money owed to the Bundesbank now totals 489 billion euros ($656 billion). That is an increase of nearly 65% from 2011, and amounts to approximately 20% of Germany’s economic output.
Bloomberg reported Tuesday that Germany is growing more concerned about the imbalance in the system, also known as the Trans-European Automated Real-Time Gross Settlement System. Target2 is the means by which countries settle business transactions in the eurozone.
If, for instance, a Greek importing company wants to place an order with a German company, the ECB’s Target2 system would handle the logistics so that the German company would end up with a credit at the Bundesbank, while the Greek company would owe the Greek central bank on the transaction.