For individual nations, the Euro is something like a foreign currency. It is true that the individual national governments still spend by crediting bank accounts of sellers and this results in a credit of bank reserves at the national central bank – just as is the case for a government issuing its own sovereign currency. The problem is that national central banks have to get Euro reserves at the ECB for clearing purposes. The ECB in turn is prohibited from directly buying public debt of governments. The national central banks can get reserves only to the extent the ECB will lend them or has
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The problem with European Central Bank
