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Eurosystem debts, Greece, and the role of banknotes

Whittaker, John (2011) Eurosystem debts, Greece, and the role of banknotes. Working Paper. UNSPECIFIED.

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    Abstract

    The public debt of Greece to foreign governments, including debt to the EU/IMF loan facility and debt through the eurosystem, rose from €47.8bn to €180.5bn between January 2010 and September 2011. €17.1bn of the rise in eurosystem debt was due to an 86% increase in the Greek issue of euro banknotes. If EU/IMF loans to Greece cease, they will be replaced by larger Greek borrowing from the eurosystem, for as long as Greece stays in the euro. Eurozone governments would only escape from lending to Greece if access of the Bank of Greece to eurosystem credit were restricted. But this would impede the clearance of payments out of Greece, it would imply that cross-border payments by means of euro banknotes would also have to be restricted, and it would force Greece out of the euro.

    Item Type: Monograph (Working Paper)
    Subjects: UNSPECIFIED
    Departments: Lancaster University Management School > Economics
    ID Code: 51935
    Deposited By: ep_importer_pure
    Deposited On: 09 Dec 2011 10:15
    Refereed?: No
    Published?: Published
    Last Modified: 10 Apr 2014 02:42
    Identification Number:
    URI: http://eprints.lancs.ac.uk/id/eprint/51935

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