Some EU countries use the eurozone as a credit card, with Germany picking up the tab – new research

Europe is home to many languages, varied geography and different cultures. And until fairly recently, it was also a place where almost every country had its own currency.

The arrival of a common currency in 1999 changed all that. Now 344 million citizens in 20 of the 27 EU member states use the euro, making it the world’s second most used international currency after the US dollar.

One purpose of the euro is to simplify cross-border payment transfers between eurozone member states. This is achieved using a system called “Target 2” (T2) which settles private sector bank-to-bank and commercial transactions between EU countries.

However, my research shows that this apparently innocuous settlement system is effectively being used to save the eurozone from imploding.

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