Criticism by Wolfgang Schäuble, Federal Minister of Finance, of Hans-Werner Sinn‘s Position on the Euro Bail-Outs

The Finance Minister Wolfgang Schäuble implies that Hans-Werner Sinn and the Ifo Institute make naive assessments when quantifying the costs that would be incurred by Germany should Greece declare insolvency, because they equate risks with budget losses (for further information see: or The Ifo Institute repudiates these criticisms on two counts (see press release dated 29.07.2012). Firstly, Ifo never made any reference to the budgetary impact of Greece’s insolvency; and secondly, it points out that the German Ministry of Finance forgot to include the potentially negative impact of the Target claims arising from the ECB system in its calculations. These Target claims measure the cash value of the principal and interest owed via the Eurosystem due to Greece’s disproportionate money creation.