Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/185541 
Authors: 
Year of Publication: 
2018
Series/Report no.: 
CESifo Working Paper No. 7343
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
This paper shows that the eurozone payment system does not effectively protect member states from speculative attacks. Suspicion of a departure from the common currency induces a terminal outflow of central bank money in weaker member states. TARGET2 cannot inhibit this drain but only protects central bank assets. Evidence presented here suggests that a run on Italy is already on the way. The paper also considers departure strategies of strong and weak member states and the distributive effects of an orderly eurozone dissolution.
Subjects: 
currency speculation
TARGET2
eurozone
Italexit
dexit
trilemma
JEL: 
E52
E58
F45
Document Type: 
Working Paper
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