**In addition to the debt crisis, the discreet but nonetheless major migration of funds from Southern Europe is contributing to the problems of the most vulnerable countries of the Eurozone. What the economist Federico Fubini has dubbed “the great flight of capital” to the North — to Germany, Luxembourg, and the Netherlands — has dried up intra-European credit flows and adding to the difficulty of financing public debt.

“It all began in 2008, on the eve of the collapse of Bear Stearns and Lehman Brothers in the United States”, writes Fubini in Corriere della Sera. The banks in the major European economies had several hundred billion euros of exposure to other countries in the Eurozone. The fear prompted by the crisis resulted in a race to repatriate investments, with both institutions and private individuals rushing to recover their funds —**

In three years, 600 billion dollars were repatriated from Italy and Spain to Germany and France. This is the underlying context for the surge in the differentials between interest rates on sovereign debt which have since reached intolerable levels. Everyone went home with his money, while confidence in Eurozone partners all but disappeared. There were two reasons for this reaction: firstly, investors were encouraged to respond in this way by their own national authorities, and secondly, banks (and companies) decided that the euro’s days were numbered and thus sought to keep their assets and their debts within the borders of individual national jurisdictions. […] At the same time, in some vulnerable Eurozone countries, savers were worried that the state and the banks would not be able to cope with the shock, and decided they would have to move their money to keep it safe.

To break the vicious circle, Fubini calls for “an accord at the highest political level, along the lines of the one that was concluded for Maastricht in 1991”, when European leaders reached agreement on convergence criteria for joining the euro and a schedule for the launch of the single currency.