Capital Flight in Eurozone Continues

Capital flight from one Eurozone country to another, continues to rise. That capital flight is a measure of trust of of a nation’s banks.

by Mish

Capital flight is ongoing in Spain, Italy, Greece, France, and Portugal in that order. The recipient countries are Germany, Luxembourg, Finland, and the Netherlands in that order.

Some charts and tables will help provide a clear picture.

Data for the following charts and tables is from ECB Target Balances, a measure of capital flight. Neither the ECB nor Eurozone officials likes to discuss these numbers for obvious reasons.

The ECB-generated chart below shows Target2 changes over time. However, tracking 20 lines by colors is more than a bit problematic.

Here is the ECB’s chart with my annotations in blue. My charts and tables follow.

February Target2 Balances

The above chart shows where the money is coming and going, and by how much.

Cyprus actually has the 5th largest positive balance (thanks to capital controls and forced bail-ins). A few other countries have positive balances, and there are other countries with smaller negatives.

Monthly Changes in Billions of Euros

Aggregate Changes


  • The six-country negative sum for February is -€841.04 billion.
  • The five-country positive sum for February is +€885.78 billion.
  • Since the numbers total zero, the rest of the imbalance is spread out over the remaining eurozone countries.
  • In the last month, another +€52.37 billion fled the deficit entities to creditor countries.

Note the ECB itself sports a negative balance to the tune of -€98.16 billion. I don’t have an explanation for precisely how this happens.

The key point is the deficit banks and countries are insolvent. German taxpayers are going to bear the brunt of this mess when it implodes.

Mike “Mish” Shedlock