> when goods are traded between two Euro countries, these goods aren't really paid for

This is a very politically biased and misleading perspective on reality.

Consider an alternative world in which the central banks of the Eurozone would have been consolidated entirely. That is, no more Bundesbank, no more De Nederlandsche Bank, only the ECB. All commercial banks would have central bank accounts directly there.

In this world, everything in the real economy would look exactly the same as it does in our world.

However, this alternative world would not have Target balances in its central bank system, and therefore nobody (including you) would ever even think to write that "goods aren't really paid for".

But how can it be that goods are paid for in this alternative world while they aren't paid for in our world? The answer is that that just doesn't make sense.

Goods are paid for even in our, non-hypothetical world. Yes, there are flow imbalances, but guess what: That happens in every region ever that has a unified currency.

If you don't like that, then please just be honest and come right out and say so. Don't try to cloud your opinion in misleading rhetoric.

> The idea behind this was that the liabilities within the TARGET2 system would cancel each other out. To everybody's utmost surprise, however, this has not happened.

So the eurosystem has been in the making for many decades, developed by many central bankers, and you are now here implying all of those central bankers would assume such a thing (it all cancels out) and could not predict that it would in reality NOT?

Of course, over any given time span --a month, a year-- not all trades will cancel each other out immediately. That's exactly why they have accounts and claims as core of the system. To keep track and balance/settle eventually in a stable "supra-national" unit, rather than one wildly fluctuating or politically-manipulated national or another.

Pretty neat if you ask me. Sucks for "notorious net debtors" of course..

I see. So they have been in a situation similar to the UK since 2004 until now? Thanks for the info!

Edit: After looking it up, there are 28 countries in the EU and 18 of them are in the eurozone.

They've also had their currency pegged to the Euro since 2005 (https://en.wikipedia.org/wiki/European_Exchange_Rate_Mechani...), so in a sense their currency has already for years been treated commercially as merely an alias unit for the Euro, like one converts lbs and kg at a fixed rate. The main difference with actually adopting the Euro is: 1) harder to change your mind later, since un-adopting the Euro is harder than abandoning a currency peg; and 2) easier for tourists and cross-border business, since the need for currency conversion & the associated fees is removed. It might also simplify cross-border business accounting, since you'd no longer have assets & liabilities in different currencies (even if pegged ones), though I know less about that.

Denmark is in a similar situation: the Danish crown is pegged to the Euro since 1999, so in practice Denmark has no real scope for independent monetary policy. Public opinion is still against joining the Euro for a mixture of nationalistic reasons (people like the currency as a symbol of sovereignty) and value put on having an exit option if things get too dicey (one exit option is to peg to the Swedish crown instead; another is to fully float).