Target balances, an indicator of euro area fragmentation and capital market malfunction, reached an all-time high at levels above 1,000 billion euro in the summer of 2012, even though current account imbalances were already being reduced. In this challenging environment, we were losing the steering ability of our monetary policy.
The big question is what are the starving people in these African countries getting from such deals: if the deals are so good, why did the people in Madagascar throw out the government that signed one of these mega-deals? We should perhaps not be surprised by the findings of a recent (October 2011) IMF study on the matter.