This paper presents the first comprehensive Target database of the Eurozone and interprets it from an economic perspective. We show that the Target accounts measure the intra-Eurozone balances of payments and indirectly also international credit given through the Eurosystem in terms of reallocating the ECB’s net refinancing credit. The Target and liabilities are interestbearing. Their interest rate equals the ECB’s main refinancing rate. However, interest revenues and expenses are socialized within the Euro system. Many think that the Target imbalances are a normal side effect of the Eurozone payment system, as they won’t occur in a currency system. The term Target balances has created much confusion even among academics; because it is a catchy term with several meanings that are not obviously connected with each other at first glance. In several countries, private debts arising from a property booble were transferred to sovereign debt as a result of banking system bailouts and government responses to slowing economies post-bubble
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